May 11, 2012 Newsletter

Hello All,

Tangents:

Happy Friday everyone! Hope you are all enjoying some good weather like we are here in Victoria. And what better way to enjoy the sun then with a good book. If you find yourself in Victoria this weekend and in need of said good book, look no further then the Times Colonist Book Sale. Located in the Victoria Curling Club, hundreds of thousands of books will be on sale this weekend.

The Book Sale is also a big draw for collectors, with some dealers lining up at 3:30 am to get to the rare books first. This year one of the big ticket items that many collectors are sure to be after is William Henry Bartlett’s Canadian Scenery, which dates back to 1842. The two-volume tome is selling for $200. Last year a 200-year-old Bible was donated and went for almost $800.

You can read more here: http://www.timescolonist.com/news/Head+cage+turn+page+history+treasured+tomes/6605093/story.html

To all those not in Victoria, here’s hoping you get some nice weather too! Have a great weekend and a happy Mother’s Day!

photos of the day May 11, 2012

Traditional straw shoes, or jipsin, hang from the bags of students in traditional scholars’ costume outside a lecture hall at a Confucian shrine at Sungkyunkwan University in Seoul, South Korea. The high school students are taking part in a re-enactment of the traditional state examinations, Gwageo.- Lee Jae-Won/Reuters

Baboons climb on a Hyundai i30 hatchback at Knowsley Safari Park during a promotional event by the manufacturer to test the car’s durability, in Preston, Merseyside, England, on May 1, 2012.- M&C Saatchi/handout/Reuters

Market Closes for May 11, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Whitney Kisling

May 11 (Bloomberg) — Canadian stocks fell, completing a second straight weekly decline, as energy and materials producers slipped on concern that a weakening Chinese economy may curb demand for commodities.

Barrick Gold Corp. and Suncor Energy Inc. declined 1.9 percent each as oil and gold futures slumped. Osisko Mining Corp. sank 13 percent after RBC Capital Markets cut its rating. Sun Life Financial Inc., the country’s third-largest insurer, rose 3.3 percent, as financial shares rose on stronger-than- forecast employment figures. Savanna Energy Services Corp. gained 4.1 percent after RBC recommended the shares.

The Standard & Poor’s/TSX Composite Index fell 41.50 points, or 0.4 percent, to 11,694.67 today for a 1.5 percent weekly decline. The index has retreated 8.2 percent since the 2012 high in February.

“It’s a bit of a mixed day, with Chinese industrial production a little lower than last month, showing signs of slowing,” Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$349 million ($350 million). The Canadian jobs number “was very good and helps propel the market higher, given domestic jobs here are pretty robust.”

The benchmark gauge fell 3 percent last week as a U.S. industry report showed employers added fewer jobs than forecast in April and commodity prices dropped. Energy and mining shares account for 43 percent of Canadian stocks by market value.

Chinese industrial production rose the least since 2009 in April, while retail sales and new lending gained less than estimated and inflation was below target, figures showed today.

The value of Chinese house sales slumped, adding to signs the world’s second-largest economy is weakening. Oil fell 1 percent, to $96.13 a barrel, the lowest settlement since Dec. 19.

Suncor Energy, Canada’s largest oil and gas producer, lost 1.9 percent to C$28.75.

Materials shares had the biggest decline in the S&P/TSX today, falling 1.5 percent as a group as gold futures plunged to a four-month low, capping the biggest weekly drop since March.

Copper also declined. The group had the worst performance of the week, down 5 percent.

Osisko Mining Corp. fell 13 percent to C$7.40, the company’s biggest retreat since February 2009, after RBC lowered the stock to sector perform from outperform. The rating means the stock is expected to trade in line with the sector average over 12 months. The company said yesterday it would shut its ore-processing mill at the Canadian Malartic mine for as long as three weeks after a fire.

Barrick Gold slipped 1.9 percent to C$37.09, while Eldorado Gold Corp. fell 2.9 percent to C$11.49.

Ivanhoe Mines Ltd. dropped 5.1 percent to C$9.48. The Vancouver-based miner appointed David Klingner as chairman and said construction of phase one at its Oyu Tolgoi gold and copper project in Mongolia was 82 percent complete at the end of April.

A report today showed Canadian employment rose almost six times faster than economists forecast in April, led by private- sector and full-time positions. Employment rose by 58,200 following a March jump of 82,300, Statistics Canada said today in Ottawa, for the largest two-month increase in more than 30 years.

An index of banks in the S&P/TSX rose 0.2 percent, after falling as much as 0.7 percent earlier today following JPMorgan Chase & Co.’s disclosure of a $2 billion trading loss. Toronto- Dominion Bank, Canada’s second-biggest lender, rose 0.4 percent to C$80.51.

A gauge of insurers added 1.2 percent. Sun Life climbed 3.3 percent to C$23.30, while Manulife Financial Corp., Canada’s largest insurer, added 2.4 percent to C$12.36.

Savanna Energy Services gained 4.1 percent to C$7.70 after RBC raised the stock to outperform from sector perform.

US

By Rita Nazareth and Elizabeth Campbell

May 11 (Bloomberg) — U.S. stocks fell, extending a weekly decline, as banks tumbled after JPMorgan Chase & Co. disclosed a $2 billion trading loss. Treasuries capped the longest run of weekly gains since 1998, while commodities fell for an eighth day to extend the longest slump in more than three years.

The Standard & Poor’s 500 Index lost 0.3 percent to close at 1,353.39 at 4 p.m. in New York, sending it down 1.2 percent in the week. The S&P GSCI Index of 24 commodities lost 0.8 percent to extend this week’s slump to 1.7 percent and erase its gain for the year. The advance in 10-year Treasuries sent yields down two basis points to 1.84 percent as the benchmark note completed an eighth weekly increase.

Financial shares led losses as JPMorgan Chief Executive Officer Jamie Dimon blamed an “egregious” failure in trading of synthetic credit securities for the trading loss, distracting investors’ attention from an unexpected increase in the Thomson Reuters/University of Michigan index of consumer sentiment to a four-year high. Commodities fell as China’s industrial production grew the least since 2009 in April, spurring concern demand for raw materials may wane.

“The U.S. economy is doing OK, corporate earnings continue to impress, but there’s a lot of headline risk in financials,” Stephen Wood, the New York-based chief market strategist for Russell Investments, said in a telephone interview. His firm oversees $140.8 billion. “There will be volatility.”

The S&P 500 fell for a second straight week and extended its drop from a four-year high last month to 4.6 percent.

JPMorgan plunged 9.3 percent, the most since August. The bank’s chief investment office, run by Ina Drew, took flawed positions on synthetic credit securities that remain volatile and may cost the lender an additional $1 billion this quarter or next, Dimon said yesterday in a conference call with analysts. Fitch Ratings cut the company’s long-term debt rating one level to A+ after markets closed in New York Federal Reserve officials are gathering more information about the trading position at the bank, according to a person familiar with the matter. Securities and Exchange Commission Chairman Mary Shapiro said the agency is monitoring the bank.U.S. Senator Bob Corker, a senior Republican on the Banking Committee, asked the panel’s chairman today to hold a hearing on the trades. JPMorgan led losses in the Dow Jones Industrial Average, which slipped 34.44 points to 12,820.60, with Bank of America Corp. losing 2 percent for the second-biggest drop. Financial shares in the S&P 500 fell 1.2 percent as a group.

Nvidia Corp. jumped 6.4 percent, the most since October, as its sales forecast topped estimates amid demand for graphics and cell-phone chips. S&P 500 technology companies slipped 0.1 percent after leading the market higher earlier.

Derivatives traders seeking to profit on speculation JPMorgan is unwinding positions tied to its trading loss are driving up a vintage credit-default swaps index to the highest in more than three months.

The 10-year Markit CDX North America Investment Grade Index Series 9, created in 2007, reached as high as 139.4 basis points today before easing to 134.1 as of 12:41 p.m. in New York, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The index ended yesterday at 126.7.

Ten-year Treasury yields approached three-month low after German Finance Minister Wolfgang Schaeuble suggested the euro area could handle Greece dropping out. Thirty-year bonds gained as wholesale inflation declined last month before the Federal Reserve buys as much as $2 billion of longer-term securities.

Average estimates for 10-year Treasury yields three months from now are at 1.99 percent, 24 basis points lower than expectations in April, according to a survey from Citigroup Inc, published yesterday.

All but three of 24 commodities tracked by the S&P GSCI retreated. Cotton tumbled as much as 5.7 percent to an almost two-year low to lead losses following a U.S. forecast for rising inventories. Gold declined to a four-month low, losing 0.7 percent to $1,584 an ounce. Copper fell 1.2 percent to $3.648 a pound, capping a second weekly drop, following slower-than- forecast growth in industrial production in China, the biggest consumer of the metal. Oil fell 1 percent to $96.13 a barrel.

“The optimism we had at the end of 2011 that created a firm footing for a lot of commodities has slowly eroded,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity-markets newsletter in Sydney. “The outlook remains mixed to negative.”

The Dollar Index, a gauge of the currency against six major peers, rose 0.2 percent to 80.282 as it climbed for a 10th straight day in the longest rally since August 2008. The dollar strengthened against 14 of 16 major peers. The euro slipped 0.1 percent to $1.2919, the lowest level since January.

The Stoxx Europe 600 Index rose 0.4 percent, erasing a loss of as much as 1.2 percent. The regional benchmark fell 0.4 percent this week as Greece’s struggles to form a government revived concern about the nation’s debt crisis. The euro was little changed at $1.2931 after earlier touching the weakest level since January.

The MSCI Emerging Markets Index lost 1.2 percent, extending declines from this year’s March 2 high to 10 percent, the level that some investors consider to signal a correction. The Hang Seng China Enterprises Index slumped 1.4 percent. India’s Sensex Index slipped 0.8 percent as production at factories, utilities and mines declined in March.

Germany’s 10-year bund yield fell two basis points to a record low of 1.52 percent, while the yield on Greece’s 10-year note advanced 57 basis points, climbing for the ninth straight day. Greek political leaders go into a fifth day of talks today with Evangelos Venizelos, the socialist Pasok leader, set to press for a unity government that would avert a new election. Antonis Samaras, head of the New Democracy party, said today his sole condition for supporting a coalition government is that it guarantees Greece’s membership of the euro area.

Have a wonderful evening everyone.

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