October 5, 2012 Newsletter

Dear Friends,

Tangents:

Happy Thanksgiving weekend everyone!

Did you know that Canadians eat more turkey on Christmas than they do at Thanksgiving? According to Turkey Farmers of Canada, last year Canadians consumed 4.4 million turkeys and at Thanksgiving, 3 million. Why do you think that is? Is it because Christmas get-togethers tend to be bigger than at Thanksgiving? All in all, Thanksgiving is a time to be thankful: for friends, family, and health – what are you thankful for this year?

And also on this day in…

1970 – Anwar Sadat took office as President of Egypt replacing Gamal Abdel Nassar. Sadat was assassinated in 1981.

1974 – American David Kunst completed the first journey around the world on foot. It took four years and 21 pairs of shoes. He crossed four continents and walked 14,450 miles.

1986 – “Business World” began airing on ABC-TV.

1988 – In a debate between candidates for vice president of the U.S., Democratic Lloyd Bentsen told Republican Dan Quayle, “You’re no Jack Kennedy.”

1989 – The Dalai Lama (Lhama Dhondrub, Tenzin Gyatso) was named the winner of the Nobel Peace Prize for his nonviolent campaign to end the Chinese domination of Tibet. Gyatso was the 15th Dalai Lama.

1990 – The Glasgow Royal Concert Hall opened.

“Don’t be afraid to give up the good to go for the great.” – John D. Rockefeller

photos of the day October 5^th, 2012

Indian Missile Dhanush takes off from a naval ship in the Bay of Bengal sea near Chandipur coast, about 125 miles from Bhubaneswar, India. India successfully test-fired the indigenously developed nuclear-capable, short-range ballistic missile from a naval ship off its eastern coast, according to a news agency.

South Korean performers are suspended in midair to form a human net in a performance, called ‘Aphrodite’ by Spanish theater company La Fura Dels Baus, in Seoul, South Korea.

Dagmar, the Rothschild giraffe, nuzzles her newborn calf in their enclosure at Chester Zoo in Chester, northern England.

Market Closes for October 5^th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Oct. 5 (Bloomberg) — Canadian stocks fell, paring a weekly gain, as a drop in oil and metal prices offset better-than- forecast employment data.

Yamana Gold Inc. lost 3.1 percent as the precious metal fell. Primero Mining Corp. soared 36 percent after getting a positive ruling from Mexican tax authorities. Glentel Inc. rose 7.3 percent for a second day of gains after securing a deal to handle mobile-device sales for Target Corp.’s new Canadian stores.

The Standard & Poor’s/TSX Composite Index retreated 28.69 points, or 0.2 percent, to 12,418.99 in Toronto, paring earlier losses of as much as 0.5 percent. The benchmark equity gauge rose 0.8 percent this week, snapping two weeks of losses.

“Toronto is lagging due to the underperformance of gold stocks,” said Greg Taylor, fund manager with Aurion Capital Management, in an interview from Toronto. The firm manages about C $8 billion ($8 billion). “There’s a fair bit of concern heading into earnings next week, so the fact the market is up a bit this week is a win.”

Canadian employment rose by 52,100 following an August gain of 34,300, primarily on more full-time hires, Statistics Canada said today in Ottawa. The jobless rate rose to 7.4 percent from 7.3 percent as the labor force grew by 72,600. The job gain exceeded all 24 forecasts in a Bloomberg economist survey with a median of 10,000, while the unemployment rate was forecast to be unchanged.

The U.S. unemployment rate unexpectedly fell to 7.8 percent in September, the lowest since President Barack Obama took office in January 2009 as employers hired more part-time workers.

Yamana Gold slipped 3.1 percent to C$18.60 and Kinross Gold Corp. retreated 2.5 percent to C$10.61 as the price of the metal fell from the highest level in almost 11 months. Gold for December delivery slumped 0.9 percent to settle at $1,780.80 an ounce in New York.

Enerplus Corp. declined 1.6 percent to C$16.23 and Baytex Energy Corp. retreated 2.6 percent to C$46.59. Crude for November delivery fell 2 percent to settle at $89.88 a barrel in New York, capping a third weekly drop.

Iamgold Corp. rose 0.4 percent to C$16.13 after announcing a 274 percent increase in indicated resources at its Cote gold project, halfway between Timmins and Sudbury in northern Ontario.

Primero Mining soared 36 percent to C$7.20, its biggest gain in more than two years. The Mexican government said it would tax silver sold from the Canadian company’s San Dimas mine at a lower rate.

Alimentation Couche-Tard Inc. jumped 6.2 percent to C$48.49, the most in almost six months, erasing earlier losses in the final hour of trading. The Laval, Quebec-based company hosted its annual general meeting today.

Glentel soared 7.3 percent to C$16.09, a five-month high.

The company rallied 3.5 percent yesterday after saying it will handle cell phone sales in Target’s Canadian retail stores, licensed under the brand Target Mobile.

Quebecor Inc. advanced 3.4 percent to C$34.49 after Vince Valentini, analyst with TD Securities, raised the stock to action list buy from buy. The Montreal-based media company agreed to pay C$1.5 billion to Canada’s second-biggest pension fund earlier this week to increase its stake in subsidiary Quebecor Media Inc.

US

By Michael P. Regan and Nikolaj Gammeltoft

Oct. 5 (Bloomberg) — U.S. stocks reversed early gains as optimism about a drop in the jobless rate faded and the Standard & Poor’s 500 Index failed to hold at an almost five-year highs.

Treasuries fell, while the Dollar Index erased losses.

The S&P 500 slipped less than 0.1 percent to close at 1,460.93 at 4 p.m. in New York, erasing a gain of 0.7 percent that took it above its best closing level since December 2007.

The Dow Jones Industrial Average rose 35 points to 13,610.15, paring an 87-point rally while still closing at the highest in almost five years. The Dollar Index reversed a 0.3 percent drop to trade little changed, while 10-year Treasury yields rose six basis points to 1.74 percent. The S&P GSCI Index of commodities lost 0.8 percent as oil slid below $90 a barrel.

Apple Inc. was the biggest drag on the S&P 500 as the largest company by market value extended a second straight weekly decline. Stocks rallied earlier after the jobless rate unexpectedly fell to 7.8 percent in September, the lowest since President Barack Obama took office in 2009, as employers took on more part-time workers. Equities also reversed gains as Spanish Prime Minister Mariano Rajoy damped speculation the nation was nearing a decision to seek a bailout to shore up its finances.

“Today’s trading is a pattern we’ve seen before this week with a strong start and then we give up gains later in the day,” Frederic Dickson, who helps oversee about $32 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a phone interview. “There’s still a lot of the dark cloud of the European financial situation hanging over the market which sets the tone for the short-term intraday trading.”

Home Depot Inc. and Boeing Co. rose at least 1.4 percent to lead gains in the Dow Jones Industrial Average, while UnitedHealth Group Inc. and AT&T Inc. were the biggest declines.

Avon Products Inc. climbed 7.2 percent as the door-to-door cosmetics seller said Andrea Jung will step down as executive chairman. Zynga Inc. plunged 12 percent after cutting its forecast for full-year bookings.

The S&P 500 has rallied 16 percent this year as policy makers around the world attempted to safeguard the global economy. Federal Reserve Chairman Ben S. Bernanke last month said the central bank will buy $40 billion of mortgage securities a month, a third round of quantitative easing.

Today’s jobs data is the second-to-last report before U.S. voters go to the polls to pick a president on Nov. 6. The economy added 114,000 workers, in-line with economists’ estimates, and August’s growth was revised higher by 46,000 jobs to 142,000. The household survey showed an 873,000 increase in employment, the biggest since June 1983, excluding the annual Census population adjustments. Some 582,000 Americans took part- time positions because of slack business conditions or those jobs were the only work they could find.

“There was good and bad news but the bottom line is that the data is still too weak for the Fed to even consider ending its unconventional policy,” Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York, wrote in a note to clients.

Jack Welch, writing on his Twitter account, said the Obama administration manipulated U.S. employment data for political gain by showing a drop in the jobless rate.

“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” the former General Electric Co. chief executive officer said in a message posted immediately after the report.

The Obama administration denied the allegation as baseless and defended the U.S. Bureau of Labor Statistics, which computes the figures. Alan Krueger, chairman of the White House Council of Economic Advisers, told Bloomberg Television that Welch’s remark was “irresponsible.”

Investors’ attention will turn to corporate profits next week when Alcoa Inc. marks the unofficial start of the earnings season on Oct. 9, the fifth anniversary of the record highs in the S&P 500 and Dow. An unbroken streak of S&P 500 profit growth that spurred the market’s three-year rebound is forecast to end, with analysts projecting a 1.7 percent decline in earnings. The growth would last another quarter if not for energy companies, whose profits are poised to slump the most since 2009.

Income at oil and gas producers would fall 22 percent for the three months ending in September, the largest decline in three years, according to more than 1,200 analyst estimates compiled by Bloomberg. Excluding the retreat, earnings in the benchmark gauge for U.S. stocks would climb 1.9 percent for a 12th straight quarter, amid gains for banks and computer makers, data show.

For the first time this year, hedge funds are turning away from a rally in the global stock market. The ratio of bullish to bearish bets among professional speculators fell last week and is below historical averages, according to a survey by International Strategy & Investment Group. The reduction came as the MSCI All-Country World Index extended its yearly advance to 12 percent and contrasts with January, when managers bought shares as they rose, data compiled by ISI and Bloomberg show.

Five shares gained for every one that fell in the Stoxx Europe 600 Index, sending the regional benchmark index up 1 percent for the day and 2.1 percent higher this week. National Bank of Greece SA rose 4 percent and EFG Eurobank Ergasias SA added 7.3 percent. To Vima reported the Greek lenders are in merger talks.

German Chancellor Angela Merkel will travel to Athens for the first time since Europe’s financial crisis broke out there three years ago, a sign she’s seeking to silence the debate on pushing Greece out of the euro. Merkel’s visit to the Greek capital Oct. 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the currency bloc.

Spain’s 10-year yield dropped 22 basis points to 5.69 percent before Prime Minister Mariano Rajoy’s meetings with his French and Italian counterparts. The rate on similar-maturity Italian debt declined eight basis points to 5.05 percent.

Prime Minister Rajoy said Spain hasn’t taken a decision on whether to seek a bailout and any decision will be based on Spaniards’ best interests. Spain needs to consider all the conditions, Rajoy said at a meeting with other leaders in Malta today, reiterating the government’s position.

The euro gained against 10 of 16 currencies and was little changed at $1.3029. Japan’s yen retreated after the jobs report and was lower against 10 of 16 peers.

The rand slid for a third day against the dollar to a four- month low as strikes in South Africa’s mining and transport industries spread. It weakened 5.5 percent this week, the most in more than a year. Illegal strikes spread across South Africa’s mining industry since a stoppage that began Aug. 10 at Lonmin Plc resulted in pay increases of as much as 22 percent.

The dispute left 46 people dead, including 34 shot by police.

Crude dropped 2 percent to $89.88 a barrel, capping a third weekly drop, amid signs that supplies are exceeding demand. Oil rallied 4.1 percent yesterday after sliding a similar amount the day before. The Energy Department reported Oct. 3 that U.S. crude output rose to 6.52 million barrels a day last week, the most since December 1996.

The MSCI Emerging Markets Index rose 0.4 percent, climbing for a second day. India’s S&P CNX Nifty Index was 0.7 percent lower after losing 16 percent amid bad trades. The National Stock Exchange cited the swing on 59 erroneous orders. Volume of trading on the BSE 30 Sensitive Index was almost triple the 30- day average.

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” – Mark Twain

Happy Thanksgiving Everyone!

“Faith consists in believing when it is beyond the power of reason to believe.” – Voltaire

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc