September 19, 2012 Newsletter

Dear Friends,

Tangents:

Chideock Tichborne, a young man involved in the Babington Plot to kill Queen Elizabeth and replace her with Mary, Queen of Scots, wrote these lines on September 19^th, 1586, in the Tower of London on the eve of his execution:

My prime of youth is but a frost of cares,

My feast of joy is but a dish of pain,

My crop of corn is but a field of tares,

And all my goods is but vain hope of gain,

The day is fled, and yet I saw no sun,

And now I live, and now my life is done…

–from The Book of Days

And also on this day in…

1932 – William Golding, author, was born.
1948 – Moscow announces it will withdrawal soldiers from Korea by the end of the year.

1949 – Twiggy, model,  was born.
1955 – Argentina’s President Juan Peron is overthrown by rebels.
1957 – First underground nuclear test is takes place in Nevada.
1985 – An earthquake kills thousands in Mexico City.

Even after all this time,
The sun never says to the earth,
‘You owe me.’
Look what happens with
A love like that.
It lights the whole sky.
– Hafiz of Persia

photos of the day September 19, 2012

Ladybugs (Coccinellidae) walk on the fruit during the harvest of Burgundy grapes on a vineyard of the Thueringer Weingut Bad Sulza near Sonnendorf, central Germany.

Jens Meyer)/AP

Models parade at the end of John Richmond Spring/Summer 2013 collection at Milan Fashion Week.

Alessandro Garofalo/Reuters

Market Closes for September 19^th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Sept. 19 (Bloomberg) — Canadian stocks rose for the first time in three days, led by metal producers as gold reached a 29- week high amid speculation that actions by central banks to support economic growth will boost demand.

Colossus Minerals Inc. jumped 11 percent after agreeing to sell some of its gold and platinum production to Sandstorm Gold Ltd. B2Gold Corp., which has assets in Latin America and Africa, plunged 12 percent after saying it will buy CGA Mining Ltd. for $1.1 billion. Gold mining companies made up six of the 10 stocks contributing the most to gains in the Standard & Poor’s/TSX Composite Index.

The S&P/TSX added 13.45 points, or 0.1 percent, to 12,436.16 in Toronto. The benchmark equity gauge has advanced 4 percent this year.

The Bank of Japan unexpectedly expanded its asset-purchase fund by 10 trillion yen ($126 billion), seeking to counter a slowdown in the world’s third-largest economy. The decision follows last week’s vote by the U.S. Federal Reserve to extend its quantitative-easing program. The European Central Bank has agreed to buy the bonds of governments that accept austerity conditions to tame the euro turmoil.

“It seems like central banks are becoming more coordinated now, we’re seeing bigger and bigger announcements in terms of asset purchases,” said Jason Hornett, a fund manager with Bissett Investment Management in a phone interview from Calgary.

He manages about C$384 million ($393 million). “The market will continue to grind higher.”

Sales of existing American homes rose in August to a two- year high, an additional sign the U.S. housing market is gaining traction in the second half of the year. Another report showed construction began on more single-family homes last month than at any time in the past two years.

Raw-material producers rose 1.3 percent for the biggest gain among the 10 industries in the S&P/TSX.

The S&P/TSX Global Gold Index advanced for a sixth day, up 1.1 percent to 353.24, its highest level since March. Gold prices tend to rise in an environment of quantitative easing, or government bond purchasing, as a hedge against inflation.

Colossus Minerals surged 11 percent to C$5.95, for the biggest percentage gain in more than two years. The company announced a $75 million deal to sell gold, platinum and palladium produced from its Serra Pelada project to Sandstorm Gold.

Sandstorm Gold gained 7.6 percent to C$11.76, its highest share price ever.

Centerra Gold Inc. soared 17 percent to C$11.95, its biggest gain since December 2008 after the company said it got regulatory approval at its Boroo mine in Mongolia. Centerra has tumbled 34 percent this year, compared with a 1.4 percent gain for the S&P/TSX Materials Index.

B2Gold slumped 12 percent to C$3.79, its biggest loss since October 2008 after agreeing to buy CGA Mining to add the largest operating gold project in the Philippines. The Masbate mine in the Philippines has total resources of about 7.7 million ounces, according to the company’s website.

Barrick Gold Corp. added 1.6 percent to C$41.65 and Yamana Gold Inc. rose 1.7 percent to C$18.89. Gold futures for December delivery were little changed, settling at $1,771.70 an ounce in New York, after earlier reaching $1,781.80.

Suncor Energy Inc. slumped 2.1 percent to C$32.83 and Canadian Natural Resources Inc. fell 2.2 percent to C$32.02.

Crude for October delivery fell 3.5 percent to settle at $91.98 a barrel in New York after the U.S. Energy Department said supplies rose by 8.53 million barrels last week, more than eight times projections in a Bloomberg survey.

US

By Nikolaj Gammeltoft and Amanda Gould

Sept. 19 (Bloomberg) — U.S. stocks rose, snapping a two- day decline in the Standard & Poor’s 500 Index, as the Bank of Japan increased its asset-purchase target and sales of existing American homes rose more than forecast.

Walt Disney Co. and Kraft Foods Inc. added more than 1 percent to lead gains in the Dow Jones Industrial Average. An S&P index of homebuilders soared 3.1 percent as PulteGroup Inc.

rallied 4.3 percent. Corning Inc. gained 1.2 percent after Goldman Sachs Group Inc. advised investors to buy the stock.

Energy shares sank the most among 10 groups in the S&P 500 as oil prices tumbled to a six-week low.

The S&P 500 added 0.1 percent to 1,461.05 at 4 p.m. in New York. The Dow advanced 13.32 points, or 0.1 percent, to 13,577.96. About 6.2 billion shares traded hands today, 3.4 percent more than the three-month daily average.

“Markets are relying a lot on the support of central banks to stay alive here,” Michael Farr, president and founder of Farr, Miller & Washington LLC, which manages $825 million, said in a phone interview. “The U.S. economy is behaving in a constructive way, not fabulous but resilient.”

The S&P 500 rallied 15 percent from its most-recent low on June 1 through Sept. 14, when it reached its highest level since December 2007. The index is trading at 14.1 times the estimated earnings of its companies, close to the highest price multiple since the end of 2010, data compiled by Bloomberg show.

Equities climbed as sales of existing homes rose in August to a two-year high, an additional sign the U.S. housing market is gaining traction in the second half of the year. Purchases of previously owned houses increased 7.8 percent to a 4.82 million annual rate, figures from the National Association of Realtors showed. The median forecast of 78 economists surveyed by Bloomberg called for sales to increase to a 4.56 million pace.

Another report showed construction began on more single- family homes last month than at any time in the past two years.

“The housing data looked decent,” Tom Mangan, who helps oversee $3.6 billion as a money manager at James Investment Research Inc. in Xenia, Ohio, said in a phone interview.

“There’s still a lot of uncertainty about the economy, Europe and the Middle East, yet the stock market remains relatively firm.”

Global stocks gained earlier after Japan’s central bank unexpectedly expanded its asset-purchase target by 10 trillion yen ($126 billion) to 55 trillion yen, seeking to avoid a further slowdown in the world’s third-largest economy.

Central banks in Asia, Europe and the U.S. are continuing to loosen policy as the euro-area debt crisis continues, threatening global growth and financial stability. The Bank of Japan’s decision followed last week’s vote by the U.S. Federal Reserve to extend its quantitative-easing program. The European Central Bank has agreed to buy the bonds of governments that accept austerity conditions to tame the euro turmoil.

Disney gained 1.5 percent to $52.70 for the biggest advance in the Dow. Kraft added 1 percent to $40.84. Home Depot, the largest U.S. home-improvement retailer, rose 1 percent to $59.47.

Consumer discretionary and phone stocks increased at least 0.7 percent, the most out of 10 industry groups in the S&P 500.

All 11 members of the S&P Supercomposite Homebuilding Index advanced. PulteGroup soared 4.3 percent to $16.43 and D.R. Horton Inc. climbed 4.1 percent to $22.22.

Corning, the world’s largest maker of glass for flat-panel televisions, rose 1.2 percent to $12.88 after Goldman Sachs raised its recommendation for the stock to buy from neutral.

Cracker Barrel Old Country Store Inc., which runs country store-themed restaurants with attached gift shops, added 5.8 percent to $67.31 after forecasting fiscal year 2013 profit of as much as $4.70 a share.

Groupon Inc., the operator of the biggest-daily deals website, rose 14 percent to $5.34 after announcing the start of a payments service to provide merchants with low fees for credit-card transactions.

An index of energy stocks in the S&P 500 lost 0.9 percent, with Occidental Petroleum Corp. and Schlumberger Ltd. losing 2 percent each to pace declines in 38 of 45 companies in the group. Crude tumbled 3.5 percent to $91.98 a barrel after the U.S. Energy Department said stockpiles rose 8.53 million barrels last week to 367.6 million. Analysts surveyed by Bloomberg expected a gain of 1 million barrels.

CVS Caremark Corp., the largest provider of prescription drugs in the U.S., jumped 0.7 percent to $47.71 after saying it plans to buy back as much as $6 billion in shares.

Have a wonderful evening everyone.

Be magnificent!

The true source of rights is duty.

If we discharge our duties, rights will not be far to seek.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Giving up is the ultimate tragedy.

-Robert J. Donovan, 1912-2003

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