March 25, 2013 Newsletter

Dear Friends,

Tangents:

I just finished reading a book that I highly recommend to you.  It is entitled Wonder and was written by R.J. Palacio, Alfred A. Knopf, 2012.  It is a page turner, wonderful story.

On this day in 421, Venice was founded at twelve o’clock noon according to legend.

Also on this day, March 25^th, 1965, the Rev. Martin Luther King Jr., led 25000 marchers to the state capitol in Montgomery, Alabama to protest the denial of voting rights to blacks.

Old New Year’s Day was on this day until 1751.

Birthdays:

Aretha Franklin, born 1942

Elton John, born 1947.

Winners are not afraid of losing.  But losers are.  Failure is part of the process of success.  People who avoid failure also avoid success. –Robert T. Kiyosaki, Rich Dad, Poor Dad.

Photos of the Day – March 25th, 2013

Daffodils are covered with wet spring snow in Lancaster, Pa., as a storm stretching from the Midwest to the East Coast is burying thoughts of springtime weather under a blanket of heavy wet snow and slush. Richard HertzlerIntelligencer Journal / Lancaster New Era/AP

A long-tailed macaque pauses at the newly completed River Safari in Singapore. Singapore’s latest attraction will showcase 5000 animal specimens representing 300 animal species from freshwater habitats inspired by eight of the world’s iconic rivers. Wong Maye-E/AP

Market Closes for March 25^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

March 25 (Bloomberg) — Canadian stocks fell to the lowest level in about a month, as raw-material and energy producers declined after enthusiasm for Cyprus’s bailout deal waned.

Yamana Gold Inc. and Goldcorp Inc. lost at least 1.9 percent as gold slumped to a one-week low. AltaGas Ltd. slid 3.2 percent after agreeing to buy power generator Blythe Energy LLC for $515 million. Agrium Inc. and Potash Corp. of Saskatchewan Inc. retreated at least 0.8 percent after an analyst cut his rating for the fertilizer sector. BlackBerry dropped 4.5 percent to extend losses a third day as Goldman Sachs Group Inc. lowered its rating on the stock.

The Standard & Poor’s/TSX Composite Index fell 76.64 points, or 0.6 percent, to 12,680.71 at 4 p.m. in Toronto, the lowest level since Feb. 26. The S&P/TSX is up 2 percent for the year. Trading volume was in line with the 30-day average.

“The trading is all fallout from Cyprus,” Arthur Salzer, chief executive officer with Northland Wealth Management, said from Toronto. His firm oversees C$225 million ($220 million).

“Investors with a short to mid-term outlook are throwing in the towel.”

Stocks opened higher, with the S&P/TSX index rising as much as 0.2 percent, and then erased gains as investors weighed whether the Cypriot bailout terms will be applied to other euro- area nations that need to recapitalize financial institutions in the future.

Cyprus, the euro-area’s third-smallest economy, agreed to shrink its banking system by shuttering its second-largest lender in return for a 10 billion-euro ($13 billion) bailout.

Under the deal, senior Cypriot bank bond holders will take losses and uninsured depositors will be largely wiped out.

Raw-materials producers contributed most to the S&P/TSX decline, falling 1.5 percent as a group. All 10 industries in the benchmark equity index retreated.

Gold dropped 0.1 percent to settle at $1,606.50. The metal slipped as much as 1.1 percent earlier. Yamana lost 3.3 percent to C$15.47 and Goldcorp declined 1.9 percent to C$33.67.

Agrium fell 1.5 percent to C$101.36 after Adam Samuelson, analyst with Goldman Sachs, lowered his rating for the fertilizer industry to neutral from attractive. Potash Corp., the world’s largest fertilizer maker, slid 0.8 percent to C$40.10.

First Quantum Minerals Ltd. dropped 3.5 percent to C$19.41, as copper futures for May delivery fell 0.6 percent to $3.445 a pound in New York. Stockpiles of copper in warehouses monitored by the London Metal Exchange expanded to the highest level since October 2003, LME data today showed.

AltaGas slipped 3.2 percent to C$34.90 after saying it would issue C$352 million in stock to help pay for the acquisition of Blythe Energy, which owns a 507 megawatt natural gas-fired plant in California.

Pengrowth Energy Corp., the oil and gas producer, lost 3.4 percent to C$5.20. Cenovus Energy Inc. dropped 1.7 percent to C$31.40. Crude for May delivery advanced to a one-month high, adding 1.2 percent to settle at $94.81 a barrel.

BlackBerry fell 4.5 percent to C$14.51 after Simona Jankowski, analyst with Goldman Sachs, lowered her rating for the stock to neutral from buy following the U.S. debut of the smartphone maker’s new Z10 device last week.

“Our retail checks at over 20 store locations since March 22, including AT&T, Best Buy and Radio Shack, revealed a surprising lack of marketing support and poor positioning,” Jankowski said in a note to clients today.

US

By Sarah Pringle

March 25 (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index rose to within a point of its record high, amid concern Cyprus’s bank-restructuring plan will pave the way for losses on deposits in other European nations.

Industrial shares retreated as Textron Inc. and Caterpillar Inc. lost at least 1 percent. BlackBerry slumped 4.6 percent after Goldman Sachs Group Inc. lowered its rating on the stock.

Dell Inc. climbed 2.6 percent after saying Blackstone Group LP and activist investor Carl Icahn have submitted proposals to buy the maker of personal computers.

The S&P 500 fell 0.3 percent to 1,551.69 at 4 p.m. in New York, after rallying as much as 0.5 percent earlier. The Dow Jones Industrial Average lost 64.28 points, or 0.4 percent, to 14,447.75. About 5.9 billion shares traded hands on U.S. exchanges today, 6.1 percent below the three-month average.

“We’re in an environment where in both North America and Europe we have some serious policy decisions that have to take place,” Ron Florance, the Scottsdale, Arizona-based managing director of investment strategy at Wells Fargo Private Bank, which has $169 billion assets under management, said in a phone interview. “When a policy misstep is bad it’s real bad, and the discussions last week were really bad decisions. That’s been resolved, but it always puts people on edge.”

Equities rallied early in the day as Cyprus, the euro- area’s third-smallest economy, met the terms for a 10 billion- euro ($13 billion) bailout after agreeing early this morning in Brussels to shrink its banking system. The finance ministers from the 17-member euro area ratified the country’s accord with the troika of the European Central Bank, the European Commission and the International Monetary Fund.

Stocks turned lower as Reuters reported that Dutch Finance Minister Jeroen Dijsselbloem said the Cyprus bailout should be viewed as a template for solving banking problems in the region.

Dijsselbloem later released a statement clarifying his remarks, saying Cyprus is a “specific case with exceptional challenges” which required the measures agreed upon.

The S&P 500 declined 0.2 percent last week for its second weekly drop as Cyprus struggled to raise enough money to obtain the bailout and a report showed euro-area manufacturing contracted more than expected. The gauge has still climbed 8.8 percent in 2013, and advanced today within a point of its record of 1,565.15 set in October 2007, before erasing gains. The Dow reached an intraday high last week after first surpassing its all-time record on March 5.

“Moving through the old high is likely to require some strong positive news. Cyprus was just not the catalyst to drive this market higher,” Alan Gayle, senior strategist at RidgeWorth Capital Management, said in a phone interview. The Richmond, Virgina-based firm oversees about $48 billion.

The bull market in equities entered its fifth year this month as the S&P 500 more than doubled from its bottom in 2009, driven by an unprecedented three rounds of bond purchases by the Federal Reserve.

Fed Chairman Ben S. Bernanke said today that low interest rates in advanced nations benefit the world economy while not creating a disruptive diversion of trade through weaker currencies. New York Fed President William Dudley said in a speech in New York that he sees the U.S. labor market improving slowing, warranting a continuation of “very accommodative” policy.

Industrial and raw-material shares fell at least 0.7 percent, as all 10 S&P 500 groups declined. Textron stumbled 3.5 percent to $29.69, while Caterpillar slumped 1 percent to $86.64. FedEx Corp. slid 1.5 percent to $97.02.

BlackBerry, formerly known as Research In Motion Ltd., tumbled 4.6 percent to $14.23. Goldman Sachs downgraded its rating on the Canadian smartphone maker to neutral from buy, citing a disappointing debut for the company’s Z10 phone in the U.S. Citigroup Global Markets Inc. analyst Jim Suva also said today the BlackBerry 10 introduction at AT&T Inc. was a “disappointment.”

Red Hat Inc., the largest seller of Linux operating system software, dropped 3.6 percent to $48.99. Raymond James & Associates Inc. equity analyst Michael Turits cut his rating on the Raleigh, North Carolina-based company to market perform from outperform, noting increasing risk of Linux growth deceleration as well as challenges among license sales.

Apollo surged 7.1 percent to $18.25 as second-quarter profit and sales topped analysts’ estimates, even as enrollment fell. Apollo’s profit was driven by the higher-than-expected revenue combined with “slightly better cost controls,” Jeffrey Silber, an analyst at BMO Capital Markets Corp., said today in a note to investors.

Dell gained 2.6 percent to $14.51. Blackstone, the world’s biggest private-equity firm, outlined an offer valued at more than $14.25 a share, while Icahn said he would pay $15 a share in cash, Dell said today.

Best Buy Co. added 1.8 percent to $23.20. Founder Richard Schulze will return to the company as chairman emeritus after failing in a six-month attempt to take over the electronics retailer he started more than four decades ago.

Visa Inc. rose 2.4 percent to a record $164. Nomura Holdings Inc. said a long-term global shift away from cash would help the bank-card network at Western Union Co.’s expense.

Western Union, the world’s largest money-transfer business, added 0.1 percent to $14.66, erasing an earlier loss of as much as 1 percent.

Have a wonderful evening everyone.

Be magnificent!

If you see God within every man and woman,

then you can never do harm to any man or woman.

If you see God in yourself, then you attain perfection.

The Bhagavad Gita

As ever,

Carolann

Take everything you like seriously,

except yourselves.

-Rudyard Kipling, 1865-1936

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