March 13, 2012 Newsletter

Dear Friends,

Tangents:

March 13^th, 1781: Planet Uranus discovered.

I read this poem last night in this week’s edition of The New Yorker:

TRUTH

Came varnished,

prepackaged, required

scissors to break the seal.

Worn raw from use, reuse

it put up splinters.

I sanded it, wiped it

clear with turpentine.

Liked the look of it

newborn,  thought about

polyurethane, two coats

at least – varnish is old hat.

Rethought the climate:

cutting, quick to punish.

Went out for more varnish.

-Maxine Kumin

photos of the day

March 13, 2012

A man snaps a photo of a blossoming tree with his iPhone outside the Philadelphia Museum of Art in Philadelphia.

Matt Rourke/AP

Jason Maguire on Cinders and Ashes (r.) jumps the last fence ahead of Robert Thornton on Montbazon during the Supreme Novices Hurdle Race, the first race of the day of the Cheltenham Festival horse racing meet, in Gloucestershire, western England. Maguire won.

Eddie Keogh/Reuters

Market Closures for March 13, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

March 13 (Bloomberg) — Canadian stocks rose for the fourth time in five days, led by commodity shares, after the U.S. Federal Reserve left policy unchanged, citing an improving labor market, and U.S. retail sales met forecasts.

Denison Mines Corp., the operator of three U.S. uranium mines, gained 9.3 percent after China Daily quoted an official as saying the country plans to increase imports of the nuclear fuel this year and buy uranium mines in Canada. Manulife Financial Corp., North America’s third-largest insurer, rose 2.4 percent on the retail sales report. Teck Resources Ltd., Canada’s biggest base-metals producer, rose 2.3 percent as copper climbed to the highest price in a week on prospects of improved demand from the U.S.

The S&P/TSX Composite Index rose 91.54 points, or 0.7 percent, to 12,519.55 at 3:07 p.m. in Toronto. The index extended gains in afternoon trading after Federal Reserve policy makers led by Chairman Ben Bernanke raised their assessment of the economy and refrained from new actions to lower borrowing costs.

“I would say the announcement is neutral,” Danielle Park, a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario, said in a telephone interview. The firm manages at least C$1 million ($1 million) each for more than 200 clients. “Stocks rallied this morning supposedly on hope for some message, but I wouldn’t say he delivered it. He’s saying that global market stresses have eased and that higher oil is going to push up inflation temporarily. That would suggest to me that he would be on hold for QE.”

The index has increased 1.8 percent since March 6, the day of its largest decline of the year, as stronger-than-forecast American jobs data and Greece’s debt restructuring helped offset China’s lower growth target and Europe’s economic contraction.

Energy and raw-materials companies make up 46 percent of Canadian stocks by market value, according to Bloomberg data.

Equities advanced today after Commerce Department data showed U.S. retail sales rose 1.1 percent in February, matching the median forecast of 81 economists surveyed by Bloomberg News.

Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based.

Raw-materials stocks in the S&P/TSX rose on the retail sales data. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer increased 3.3 percent to C$21.13. Teck increased 2.3 percent to C$36.29.

Denison Mines surged 9.3 percent to C$1.64.

China plans to import more uranium this year than last, Qian Zhiming, the deputy director of China’s National Energy Administration, told China Daily. The country imported 16,126 tons of uranium in 2011, the newspaper said, citing customs data. China aims to buy overseas uranium mines, particularly those in Canada, Qian was quoted as saying.

Financial companies in the index increased for a fourth day. Royal Bank of Canada, the country’s largest lender by assets, advanced 1.9 percent to C$57.88. Toronto-Dominion Bank, Canada’s second-largest lender, rose 0.9 percent to C$83.10.

Manulife climbed 2.4 percent to C$12.57.

US

By Nick Baker and Rita Nazareth

March 13 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to the highest level since 2007, and Treasuries fell after the Federal Reserve raised its assessment of the economy and JPMorgan Chase & Co. increased its dividend.

The Standard & Poor’s 500 Index added 1.8 percent to 1,395.95 at 4 p.m. New York time and the Dow climbed 217.97 points to 13,177.68. The Chicago Board Options Exchange Volatility Index dropped to 13.99, the lowest intraday level since 2007. Yields on 10-year Treasuries advanced a fifth day, reaching 2.13 percent. S&P 500 futures rose 0.1 percent at 4:53 p.m. while Citigroup retreated 3 percent after the Fed said it failed a stress test.

The U.S. central bank said the economic outlook has improved as the labor market gathers strength. Policy makers refrained from new action to lower borrowing costs. Gains in equities were also spurred by U.S. Commerce Department data showing retail sales jumped 1.1 percent in February. JPMorgan’s shares rallied 7 percent after the bank boosted its dividend and announced a $15 billion buyback.

“People are realizing that the world is not ending,” John Canally, who helps oversee about $330 billion as an economist and investment strategist at LPL Financial Corp. in Boston, said in a telephone interview. “There’s a lot of good positive momentum in the market. The retail sales data is helping.”

The dollar strengthened against the euro and yen. Copper futures rallied 1.8 percent, crude oil rose 0.4 percent and gold declined 1.6 percent in electronic trading.

Today’s rally pushed the S&P 500 above its March 1 peak, completing its recovery from the subsequent three-day loss.

Before the Fed’s comments, the Chicago Board Options Exchange Volatility Index, or VIX, fell to an almost five-year intraday low of 13.99. It’s a gauge of how much investors are paying to protect against losses in the S&P 500, which has rallied five straight days. The VIX ended the day at 14.80, down 5.4 percent.

JPMorgan led financial shares higher. The biggest U.S. bank raised its quarterly dividend to 30 cents from 25 cents and authorized a share-repurchase plan as lenders respond to the Fed’s tests of how they would fare in an economic decline. Bank of America Corp. and Goldman Sachs Group Inc. advanced more than 6.2 percent.

Citigroup declined after the New York Stock Exchange closed at 4 p.m. The third-largest U.S. bank failed to meet the Fed’s minimum requirements in a stress test when examiners considered the effects of the firm’s plan for managing capital.

The Fed said at 4:30 p.m. New York time that 15 of the 19 largest U.S. banks could maintain adequate capital levels even in a recession scenario in which they continue paying dividends and buy back stock.

Apple Inc. rose 2.9 percent, rallying for a fifth straight day, as Jefferies Group Inc. raised its share-price estimate to $699. That helped send the Nasdaq Composite Index above 3,000 for the first time since 2000. The Dow Jones Transportation Average, considered a proxy for economic growth, climbed 2.1 percent.

German bunds fell, pushing 10-year yields up by the most in a month, after a report showed investor confidence in Europe’s largest economy improved, sapping demand for the region’s safest securities. The yield on the 10-year bund rose six basis points, or 0.06 percentage point, to 1.82 percent.

Greek bonds issued to investors as part of the nation’s debt swap declined on their first full day of trading. The yield on the 2 percent bonds due in February 2023 rose 57 basis points, to 19.02 percent.

Spanish securities slipped after European finance chiefs meeting yesterday called on the nation to make deeper budget cuts. The yield on the nation’s 10-year bond yield climbed eight basis points to 5.13 percent.

Have a wonderful evening everyone.

Be magnificent!

The whole universe is bound by the law of causation.

There cannot be anything, any fact – either in the internal or in the external world –

that does not have a cause; and every cause must produce an effect.

Swami Vivekananda

As ever,

Carolann

Everybody wants to save the earth; nobody

wants to help Mom do the dishes.

-P.J. O’Rourke, 1947-

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