March 19, 2012 Newsletter

Dear Friends,

Tangents:

Everything is gestation and then bringing forth.  To let each

impression and

each germ of a feeling come to completion, wholly in itself,

in the dark, in

the inexpressible, the unconscious, beyond the reach of one’s

own intelligence, and

await with deep humility and patience the birth-hour of a new

clarity: that

alone is living the artist’s life: in understanding as in creating.

There is here no measuring with time, no year matters, and ten

years are

nothing.  Being an artist means not reckoning and counting,

but ripening like

the tree which does not force its sap and stands confident in the

storms of

spring without the fear that after them may come no summer.

It does come.  But

it comes only to the patient who are there as though eternity lay

before them,

so unconcernedly still and wide.

-Rainer Maria Rilke

photos of the day

March 19, 2012

Cherry blossoms begin to bloom at the Martin Luther King Jr. National Memorial on the Tidal Basin in Washington.

Charles Dharapak/AP

A mother coaxes her new born lamb to stand at the Riverslea Farm in Epping, N.H. during record warm temperatures on the last day of winter.

Jim Cole/AP

Market Closures for March 19, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

March 19 (Bloomberg) — Canadian stocks swung between gains and losses as energy companies rose on speculation that U.S. economic growth will accelerate and gold producers fell.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1.7 percent after a report that U.S. homebuilder confidence held at the highest level since June 2007. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, advanced 1.3 percent. Potash Corp. of Saskatchewan Inc. declined 1.5 percent as wheat futures fell.

The S&P/TSX Composite Index increased 1.85 points, or less than 0.1 percent, to 12,498.81 at 3:11 p.m. in Toronto.

“We’ve been moving higher over the last few months, but it makes sense for the market to pause from time to time,” Tony Demarin, chief investment officer at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$335 million ($333 million). “In terms of oil stocks, there’s still a bit of a disconnect between their prices and the lofty price for crude. They still have more room to climb to catch up, and you’re seeing that a bit today.”

The index slipped 0.1 percent last week as economic data from the U.S. helped commodity shares pare losses after China reported a smaller gain in exports than economists had forecast.

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

Canadian energy companies increased for a third straight day as oil futures in New York gained as much as 1 percent. The National Association of Home Builders/Wells Fargo index was unchanged in March and sales expectations climbed.

Suncor Energy increased 1.7 percent to C$33.50. Canadian Natural Resources rose 1.3 percent to C$35.49. The Canadian energy shares with the highest market capitalizations are valued at 20 percent below a five-year average for earnings before interest, taxes, depreciation and amortization, UBS AG analyst George Toriola wrote in a March 16 note.

Materials stocks in the S&P/TSX fell after a two-day rebound, led by gold companies, even as gold futures rose after a drop in the dollar boosted the appeal of the metal as an alternative asset.

China Gold International Resources Corp. fell 7 percent to C$4.42. Premier Gold Mines Ltd., which explores in Ontario and Nevada, decreased 3.9 percent to C$4.73.

Nevsun Resources Ltd., which mines gold in the African country of Eritrea, gained 6.1 percent to C$3.50 after saying it may buy back as much as 2 percent of its shares.

Potash Corp., the world’s biggest fertilizer producer, slipped 1.5 percent to C$44.74 as wheat headed for its biggest drop in a week in Chicago on speculation that rain will boost production in North America and China.

Cardiome Pharma Corp., which develops heart drugs, plunged 56 percent to 84 Canadian cents after Merck & Co. decided to discontinue further advancement of the oral formulation of an atrial fibrillation drug it was developing with the company.

US

By Rita Nazareth

March 19 (Bloomberg) — The Standard & Poor’s 500 Index advanced to the highest level since May 2008 as Apple Inc. plans to pay a dividend and buy back $10 billion of its stock.

Apple climbed 2.7 percent to a record $601.10. Citigroup Inc. advanced 1.3 percent after selling its 2.71 percent stake in Shanghai Pudong Development Bank. U.S. Steel Corp. rallied 6.4 percent to pace gains in commodity shares. United Parcel Service Inc. increased 3.4 percent after agreeing to buy TNT Express NV. Bank of America Corp. retreated 2.8 percent, reversing an earlier advance that drove the stock above $10.

The S&P 500 rose 0.4 percent to 1,409.75 at 4 p.m. New York time, trading 9.9 percent below its October 2007 record of 1,565.15. The Dow Jones Industrial Average added 6.51 points, or 0.1 percent, to 13,239.13. The Nasdaq Composite Index gained 0.8 percent to 3,078.32, the highest level since November 2000. The S&P Smallcap 600 Index increased 0.9 percent to an all-time high of 465.97. About 6.6 billion shares changed hands on U.S. exchanges, almost in line with its three-month average.

“There’s plenty of room for dividends to increase,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management. His firm oversees $160 billion. “Paying dividends is a sign of health in the companies and the economy. That plays well in terms of investors’ confidence.”

The S&P 500 has rallied 12 percent this year and is on pace for the best first quarter since 1998 amid better-than-estimated economic and corporate reports. It trades at about 14.6 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4 times earnings.

Today’s rally amid Apple’s announcement added to last week’s optimism over dividend increases by banks including JPMorgan Chase & Co. The index rose 2.4 percent between March 9 and March 16 for the biggest weekly gain this year.

“It’s all about confidence,” said James Paulsen, who helps oversee about $333 billion as chief investment strategist at Minneapolis-based Wells Capital Management. “You’re seeing more evidence of corporate confidence rising to the extent that companies are starting to act on that. The environment for the next few years still looks very good for equity investors.”

Apple gained 2.7 percent to $601.10. Investors will receive a quarterly dividend of $2.65 a share starting in the period beginning July 1, Cupertino, California-based Apple said in a statement. The buybacks will begin in the fiscal year starting Sept. 30 and will take place over three years, the company said.

The company’s cash pile has swelled amid surging demand for its products. Investors had urged Apple to return some of the balance in the form a dividend.

“We are extremely confident in our future and see tremendous opportunities ahead,” Apple Chief Financial Officer Peter Oppenheimer said in the release. He said the company plans to pay out about $45 billion over three years.

The KBW Bank Index added 0.5 percent as 20 of its 24 stocks advanced. Bank of America fell 2.8 percent to $9.53, snapping a four-day rally.

Citigroup added 1.3 percent to $37.17. The third-largest U.S. bank sold its 2.71 percent stake in Shanghai Pudong Development Bank to institutional investors, generating after- tax proceeds of about $349 million.

Morgan Stanley rallied 2.7 percent to $20.06. The owner of the world’s largest brokerage is planning its first corporate bond sale since October after the cost to protect its bonds from default dropped by almost 50 percent in the past four months.

U.S. Steel had the biggest advance in the S&P 500, gaining 6.4 percent to $31.64. The country’s largest producer of the metal by volume should benefit from a recovery in steel prices, UBS AG said in a note.

UPS added 3.4 percent to $81.11, the highest level since July 2006. The company raised its offer for TNT Express NV by 5.6 percent to 5.16 billion euros ($6.8 billion) to secure the biggest deal in the U.S. company’s 105-year history.

E*Trade Financial Corp. advanced 1.6 percent to $11.22. The online brokerage was raised to the equivalent of buy at Wells Fargo & Co.

Sprint Nextel Corp. slumped 4.5 percent, the most in the S&P 500, to $2.76. Sanford C. Bernstein & Co. downgraded the company amid concern it won’t sell enough iPhones to afford its “punishing” commitment with Apple Inc.

Medco Health Solutions Inc. lost 1.9 percent to $68.93.

Express Scripts Inc.’s bid to acquire the company may be delayed by a lawsuit being considered by five states. Express Scripts fell 2.1 percent to $53.22.

A measure of homebuilders in S&P indexes dropped 0.9 percent. The March reading of 28 in the National Association of Home Builders/Wells Fargo index of builder confidence was less than projected and followed a February figure that was lower than initially reported, figures from the Washington-based group showed today. The median forecast of economists surveyed by Bloomberg News called for a rise to 30. Readings below 50 mean more respondents said conditions were poor.

KB Home sank 6.8 percent to $11.89. PulteGroup Inc. retreated 1.4 percent to $9.16.

Daily price changes in the S&P 500 are decreasing the most in eight decades, shrinking to the smallest since 1995 when investors abandoned stocks just before the biggest rally ever.

The benchmark gauge for U.S. equities has gained or lost an average 0.46 percent a day this year, compared with 1.04 percent in 2011, the biggest reduction since 1934, during the Great Depression, according to data compiled by Bloomberg. Swings are diminishing after valuations fell 40 percent and correlation among shares weakened the most in at least three decades.

At the same time, trading on the New York Stock Exchange has slumped to the lowest rate in 13 years, spurring concern about the biggest first-quarter rally since 1998. Bulls say the decline in trading and daily swings signal fear is dissipating after one of the most volatile years on record. Bears say falling volume is a warning gains will reverse should economic reports and earnings fail to match expectations.

“Low volatility is good in that it will bring investors back,” Tim Hoyle, the director of research at Radnor, Pennsylvania-based Haverford Trust Co., which manages $6 billion, said in a March 13 phone interview. “Even though bullish sentiment is high, people are still fearful. I see it in my business every day, they couldn’t stomach the volatility. This will restore some sense.”

Have a wonderful evening everyone.

Be magnificent!

The idea of a duty to understand violence engenders for me

a great vitality and passion for knowledge.

But to transcend this violence, I need not repress it, nor deny it, nor say to myself:

It has become a part of me, I can do nothing about it; or, I wish to reject it.

I must observe it, study it, enter into it intimately,

and for that purpose I need neither condemn it nor justify it.

And yet, it is this that we do.

I would ask you, then, to suspend for an instant your judgments on the subject.

Krishnamurti, 1895-1986

As ever,

Carolann

Each friend represents a world in us, a world

possibly not born until they arrive, and it is

only by this meeting that a new

world is born.

-Anais Nin, 1903-77

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