May 22, 2012 Newsletter

Dear Friends,

Tangents:

There were several pieces on gardening and gardens in The Financial Times in the most recent  weekend edition, this being the occasion of the Chelsea Garden show, that show of shows.

I found the following bit on horticultural history amusing, especially the spelling in old English:

Horticultural history How some ‘heritage’ fruits and vegetables were fist described in literature

Asparagus

The first shootes or heads of Asparagus are a Sallet of as much esteeme with all sorts of persons, as any other whatsoever, being boyled tender, and eaten with butter, vinegar, and pepper, or oyle and vinegar, or as every ones manner doth please. –John Parkinson, Paradisi in Sole Paradisus Terrestris, 1629.

Mulberry

In the flesh of the mulberry there is a juice of a vinous flavor, and the fruit assumes three different colours, being at first white, then red, and ripe when black…. It is in this tree that human ingenuity has effected the least improvement of all; there are no varieties here, no modifications effected by grafting, nor, in fact, any other improvement except that the size of the fruit, by careful management, has been increased.  –Pliny, Natural History, 1^st century AD.

Carrot

The roote is round and long, thicke above and small below, eyther red or yellow, eyther shorter or longer. –John Parkinson, Paradis in Sole Paradisi Terrestris, 1629.

Pea

Pease are of divers kinds…the meaner sort of them have been long acquainted with our English Air and Soil; but the sweet and delicate sorts of them have been introduced into our Gardens only in this latter age. –John Worlidge, Systema Horiculturae, 1683, (2^nd ed).

Radish

I do remember him at Clement’s Inn, like a man made after supper of a cheese-paring; when he was naked, he was for all the world, like a forked radish, with a head fantastically carved upon it with a knife. –William Shakespeare, Henry IV, Part II, Act 3, Scene 2. -from Heritage Fruits and Vegetables by Toby Musgrave, published by Thames & Hudson.

And on this day in…

1867 – Queen Victoria gives Royal Assent to the British North America Act – Decrees that the Dominion of Canada should come into being on July 1
1908 – The Wright Brothers register their flying machine for a U.S. patent
1987 – An Iraqi missile hits the American frigate USS Stark in the Persian Gulf
1843 – 1000 Pioneers head west on the Oregon Trail
1972 – President Nixon visits Moscow
1992 – Johnny Carson’s last episode of The Tonight Show

photos of the day

May 22, 2012

Members of the English National Ballet pose outside The Orangery restaurant at Kensington Palace in London as part of a publicity event for a summer charity fundraiser with Swan Lake as the theme.

Toby Melville/Reuters

Trumpeters from different military units in their ceremonial uniform simultaneously play a fanfare at the Wellington Barracks in London in a Guinness World Record attempt for the longest line of fanfare trumpeters and to mark the run-up to the Queen’s Diamond Jubilee. The 91 trumpeters set the first world record of its kind.

Sang Tan/AP

Mishaps are like knives that either serve us or cut us as we grasp them by the blade or the handle. – James Russell Lowell

Market Closes for May 22, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 22 (Bloomberg) — Canadian stocks rallied the most since the first trading day of the year, rebounding from last week’s slide, as U.S. home sales increased and investors speculated China and Europe will stimulate economic growth.

Royal Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia increased more than 1.1 percent. Oil and gas producers Suncor Energy Inc. and Canadian Natural Resources Ltd. climbed at least 3.1 percent as natural gas futures rose.

Westport Innovations Inc. surged 14 percent. Niko Resources Ltd. sank 8.5 percent after saying it will relinquish its interest in an Indian gas production block.

The Standard & Poor’s/TSX Composite Index rose 239.1 points, or 2.1 percent, to 11,519.74 at 11:42 a.m. in Toronto, its biggest intraday increase since Jan. 3. The Canadian market was closed yesterday for the Victoria Day holiday.

“We’re seeing a snapback from oversold conditions,” Irwin Michael, a portfolio manager at ABC Funds in Toronto, said in a telephone interview. Michael’s firm oversees C$1 billion ($1 billion). “Things may not be as bad as what the market once thought. Any bit of good news can get a rally going.”

The benchmark gauge on May 18 completed a third straight weekly decline as concerns mounted that the Greek debt crisis, European elections and a slowing Chinese economy may curb demand for commodities. Energy and raw-materials companies account for 43 percent of Canadian stocks by market value, according to data compiled by Bloomberg.

Energy companies advanced as natural gas rose for the second time in three days on speculation that warmer-than-normal weather heading into June will help drive demand from power plants and trim a supply surplus.

Suncor Energy, Canada’s largest oil and gas producer, climbed 4.3 percent to C$28.58. Canadian Natural Resources, the country’s third-biggest energy company, increased 3.1 percent to C$30.89. Encana Corp., Canada’s largest natural gas producer by volume, rose 3.9 percent to C$20.79.

Westport Innovations, a Vancouver-based maker of cryogenic fuel tanks, surged 14 percent, the biggest increase in the S&P/TSX, to C$27.92. The company makes the only available 15- liter gas-powered engine suitable for heavy-duty trucks running on liquid natural gas.

Niko Resources Ltd., which produces oil and gas in South Asia, sank 8.5 percent, the third-biggest drop in the index, to C$31.15 after giving up its portion of the D4 production block located in India’s Mahanadi basin. The company cited the size and risk associated with the project, as well as the current commercial environment in India.

Banks in the S&P/TSX snapped a five-day skid as U.S. equities extended gains after the National Association of Realtors said sales of existing homes increased in April for the first time in three months, adding to signs the housing market is recovering. Global equities also rallied as the China Securities Journal reported that the nation plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth.

Royal Bank of Canada, the nation’s biggest lender, gained 1.1 percent to C$52.28. Toronto-Dominion Bank, Canada’s second- largest lender, rose 1.7 percent to C$78.23. Bank of Nova Scotia, the country’s third-largest lender, climbed 1.2 percent to C$51.73.

US

By Rita Nazareth and Michael P. Regan

May 22 (Bloomberg) — U.S. stocks erased gains and the euro extended losses versus the dollar, while Treasuries trimmed earlier declines, on concern that Greece was making preparations to exit the euro. Facebook Inc. tumbled 8.9 percent.

The Standard & Poor’s 500 Index closed up less than 0.1 percent at 1,316.63 at 4 p.m. in New York after rallying as much as 1 percent. The euro slid 1 percent to $1.2689 and 10-year Treasury yields increased three basis points to 1.77 percent after surging as much as six points earlier. Crops led commodities lower while oil retreated as Iran agreed to let Western nuclear inspectors into the country.

U.S. equities reversed gains in the final hour of trading and the euro sank to its low of the day after Dow Jones reported that former Greek Prime Minister Lucas Papademos said the nation is considering preparations to leave the shared currency. The comments wiped out an earlier rally in stocks triggered by an increase in U.S. home sales and speculation leaders in Europe and China will step up efforts to bolster economic growth.

“We went from risk-on to risk-off pretty quickly,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “Greece is not a major economy, but there’s obviously fear of contagion in case it exits the euro. These outside factors will weigh on the market even as economic numbers are good.”

U.S. shares rallied earlier after the National Association of Realtors said sales of existing homes increased in April for the first time in three months, adding to signs the housing market is recovering. China plans to speed up approval of infrastructure projects and allocate construction funding faster to improve growth, the China Securities Journal reported.

The S&P 500 surged 1.6 percent yesterday, the biggest gain since March 13, after German Finance Minister Wolfgang Schaeuble said yesterday that European leaders will do “everything necessary” to keep Greece in the 17-nation euro and focus on steps to aid economic expansion.

Commodity producers and technology companies fell the most among 10 industries in the S&P 500, while financials, utilities and consumer companies had the biggest gains. Alcoa Inc., Pfizer Inc. and DuPont Co. lost at least 0.6 percent for the biggest declines in the Dow Jones Industrial Average, while JPMorgan Chase & Co. and Bank of America Corp. rose the most. The 30- stock Dow ended down 1.67 points at 12,502.81 after earlier climbing as much as 71 points.

JPMorgan jumped 4.6 percent, rebounding from a 20 percent plunge following its May 10 disclosure of at least $2 billion in trading losses from credit derivatives. Goldman Sachs Group Inc. analysts reiterated their buy rating on the stock today, saying the company’s plan to halt share buybacks reflects a “prudent decision” to preserve capital given the volatility and uncertainty around its chief investment office’s holdings.

Facebook Inc. lost 8.9 percent to $31, extending yesterday’s 11 percent plunge, in the social network’s third day of trading after selling shares at $38 in the biggest initial public offering for an Internet company. After one of the most anticipated IPOs ever, Facebook’s two-day plunge prompted investors to fault everything from Morgan Stanley’s role as lead underwriter, to the company’s greed and the Nasdaq Stock Market for mishandling the first day of trading.

An S&P index of 12 homebuilders rallied 1.9 percent and is up 5 percent in two days. PulteGroup Inc. and Lennar Corp. rallied more than 2 percent to pace gains today. Purchases of previously owned homes increased 3.4 percent to a 4.62 million annual rate, according to figures from the Realtors association, adding to signs the industry is stabilizing.

Treasuries remained lower after the U.S. sold $35 billion in two-year notes. The securities drew a yield of 0.30 percent, matching the average forecast in a Bloomberg News survey of nine of the Federal Reserve’s 21 primary dealers. The 30-year yield jumped added six basis points to 2.87 percent after surging as much as nine basis points earlier.

The Stoxx Europe 600 Index increased 1.9 percent, with European markets closed before the report that Papademos said Greece was considering preparations to leave the euro.

Rio Tinto Group and Renault SA led gains in mining companies and automakers, rising at least 4 percent. Homeserve Plc, the U.K. provider of emergency-repair services that suspended telephone sales and marketing in October after a review showed they didn’t meet its standards, plunged 29 percent after saying the Financial Services Authority will investigate “certain historic issues.”

European stocks held gains after the Organization for Economic Cooperation and Development said Europe’s debt crisis risks spiraling and seriously damaging the world economy.

European leaders are scheduled to meet in Brussels tomorrow. German Chancellor Angela Merkel said she won’t shy away from disagreeing with French President Francois Hollande, saying good cooperation “doesn’t exclude differing positions.”

France isn’t out to create conflict and will welcome “all the tools, all the proposals” at the meeting, Hollande said.

The German 10-year bund yield added four basis points to 1.47 percent, while similar-maturity Spanish bond yields slid 20 basis points after the government beat its maximum target at an auction today.

Spain’s two-year note yield slid 17 basis points, and the cost of insuring the country’s debt against default dropped 28 basis points to 527. Spain sold 2.53 billion euros ($3.2

billion) of bills, more than its maximum target of 2.5 billion euros. The Italian two-year note yield tumbled 20 basis points.

The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments declined 5.4 basis points to 310.5. In addition to Spain, the Netherlands sold 3 billion euros of 2015 notes today, and the European Financial Stability Facility sold 1.478 billion euros of 182-day bills as borrowing costs fell.

The euro weakened against all but four of its 16 major counterparts. The Dollar Index rose for the first time in three days, adding 0.7 percent. The measure of the currency against six major peers last week capped a record string of 14 straight gains. The pound fell 0.5 percent versus the dollar as U.K.

inflation slowed and the International Monetary Fund said more stimulus such as quantitative easing is needed to boost the economy.

The yen weakened after Fitch cut Japan’s rating by one step because of the nation’s “leisurely” efforts to tackle the world’s biggest public debt burden.

The Bank of Japan started a two-day meeting, with seven out of 14 economists surveyed by Bloomberg News saying they expect the central bank to bolster monetary stimulus by July and none predicting action at the end of the meeting tomorrow. The Bank of Japan increased planned bond purchases a month ago.

The S&P GSCI Index of 24 commodities retreated 0.9 percent as corn, cotton, sugar and cocoa fell more than 2.6 percent to lead declines. Oil slipped 1 percent to $91.66 a barrel as Iran agreed to let Western nuclear inspectors into the country, easing concern that the conflict over its atomic energy program will disrupt supplies.

The MSCI Emerging Markets Index added 0.2 percent, trimming a gain of as much as 1.1 percent. The Hang Seng China Enterprises Index of Chinese stocks listed in Hong Kong advanced 1.2 percent and the Shanghai Composite Index increased 1.1 percent. Industrial stocks led the advance with Anhui Conch Cement Co., the biggest Chinese cement producer, jumping 3.5 percent. Benchmark gauges in South Korea, Taiwan and Hungary climbed at least 0.9 percent while India’s Sensex lost 1 percent.

Have a wonderful evening everyone.

Be magnificent!

Even at the gate of death, in the greatest danger,

in the thick of the battlefield,

at the bottom of the ocean, on the tops of the highest mountains,

in the thickest of the forest, tell yourself,

“I am He, I am He.”

-Swami Vivekananda, 1863-1902

As ever,

Carolann

A finished person is a boring person.

-Anna Quindlen, 1952-

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