September 7, 2012 Newsletter

Dear Friends,

Tangents:

Interesting observation:

“As outdoor lightning becomes increasingly prominent, our night skies are gradually turning from black to red,” blogs Amy Shira Teitel for Discover magazine.  “This discovery came from a team of scientists led by Christopher Kyba from the Freie Universitaet and the Leibnitz Institute for Freshwater Ecology and Inland Fisheries.  The scientists were tracking the effects of cloud cover on light pollution when they realized the colour of night is changing.  Their report, entitled Red is the New Black, was just published in the journal Monthly Notices of the Royal Astronomical Society….It’s well known that the daytime sky is blue because the atmosphere scatters shorter blue wavelengths of light more than long red wavelengths.  Similarly, the team found that the shorter wavelengths of artificial light are scattered more easily on clear nights.  But with cloud cover, the long-wavelength red light that is usually sent out into space on clear nights is scattered back down to Earth.  The result is that cloudy nights in urban areas have a reddish glow.”

And on this day in…

1533 – Queen Elizabeth l was born.

1860 – Grandma Moses was born.

1876 – The James-Younger gang botches an attempt to rob the First National Bank of Northfield, Minnesota.
1888 – An incubator is used for the first time on a premature infant.
1912 – French aviator Roland Garros sets an altitude record of 13,200 feet.
1916 – The U.S. Congress passes the Workman’s Compensation Act.

1936 – Buddy Holly was born.
1940 – Germany’s blitz against London begins during the Battle of Britain.
1954 – Integration of public schools begins in Washington D.C. and Maryland.
photos of the day September 9, 2012

A Bavarian herdsman in traditional dress awaits the start of the cattle drive in Pfronten, Germany, Saturday. About 500 cattle around Pfronten returned to the valley after spending the summer months in the mountains.

Matthias Schrader/AP

A giant balloon floats past the Belgian Parliament during the Balloon Day Parade in central Brussels, Saturday. Giant figures representing well-known comic strip and Belgian characters are parading along the downtown boulevards, as part of the “Belgium Comic Strip Festival”.

Yves Herman/Reuters

Market Closes for September 7, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Sept. 7 (Bloomberg) — Canadian stocks rose, sending the benchmark index to its biggest weekly advance of the year, as the nation added more jobs than forecast while slower-than- estimated U.S. employment growth boosted speculation the Federal Reserve will inject stimulus into the economy.

Bankers Petroleum Ltd. surged 14 percent after the company said it submitted a bid for Albpetrol, a state-owned Albanian energy company, for an undisclosed amount. Lululemon Athletica Inc. soared 12 percent after boosting its 2012 forecast.

Research In Motion Ltd. added 6.2 percent after U.S. carrier Verizon Wireless said it will carry the upcoming BlackBerry 10 smartphones. Barrick Gold Corp. and Goldcorp Inc. each added 2.6 percent as the metal jumped to a six-month high.

The S&P/TSX gained 128.28 points, or 1.1 percent, to 12,268.01. The benchmark gauge rose 2.7 percent this week, the most since December 2011.

“Given the weak jobs numbers out of the U.S. we have some further evidence the probability of QE3 is moving higher,”

Philip Petursson, managing director in the portfolio advisory group at Manulife Asset Management Ltd., said from Toronto, referring to another round of bond purchases, or quantitative easing, by the Fed. Petursson’s firm manages about $218 billion.

“That is being reflected in gold and reflected in the TSX as a result of gold.”

The U.S. economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated, Labor Department figures showed today in Washington.

Unemployment fell to 8.1 percent as more Americans left the workforce and hourly earnings were unchanged.

The figures increased speculation that Fed policy makers will expand record monetary stimulus next week after Fed Chairman Ben S. Bernanke called unemployment a “grave concern.”

Canada’s employment rose by 34,300 following the July decrease of 30,400, Statistics Canada said today in Ottawa, and the jobless rate was unchanged at 7.3 percent. Prime Minister Stephen Harper said in an interview with Bloomberg in Vancouver yesterday there will be “sluggish” growth for an extended period in much of the global economy.

Mining shares advanced to lead gains on the S&P/TSX as copper rallied after China approved new infrastructure projects.

The plans include 2,018 kilometers (1,254 miles) of roads as well as construction of nine sewage-treatment plants, five port and warehouse projects, and two waterway upgrades, according to statements on the website of the National Development and Reform Commission yesterday. The construction projects suggest the government is stepping up stimulus efforts to revive economic growth.

First Quantum Minerals Ltd. soared 9.8 percent to C$21.92 after the copper miner announced it has acquired a 19 percent stake in Empire Mining Corp. through a private placement. Copper futures rose to a 16-week high, gaining 3.7 percent to settle at $3.65 a pound in New York.

Teck Resources Ltd., Canada’s largest diversified miner, increased 9.2 percent to C$29.51 for its biggest gain in a year.

Barrick Gold added 2.6 percent to C$39.27 and Goldcorp jumped 2.6 percent to C$42.06. Gold futures for December delivery climbed 2 percent to settle at $1,740.50 an ounce in New York.

Bankers Petroleum added 14 percent to C$3.04 after the oil and gas company, which is developing the Patos-Marinza oil field in Albania, said today it has submitted a bid for Albpetrol.

Bankers Petroleum did not disclose the amount of its bid for the state-owned Albanian company, but said if successful it will pay for it through a combination of cash on hand and debt.

Shares of the company have slumped 32 percent this year, compared with a 1.2 percent decline in the S&P/TSX Composite Energy Sector Index.

RIM gained 6.2 percent to C$7.02 after Verizon said it will carry the upcoming BlackBerry 10 line of smartphones, which will go on sale next year. RIM, whose shares are down 53 percent this year, is counting on BB10 to get it back in the game with Apple Inc. and Google Inc.’s more popular platforms after U.S. and Canadian consumers dumped BlackBerry models in favor of devices like the touch-screen iPhone.

Lululemon, the Canadian yoga-wear retailer whose shares have climbed 59 percent this year, jumped 12 percent to C$75.50 after boosting its revenue and profit forecast on soaring sales.

The Vancouver-based company estimates sales will rise to as much as $1.36 billion and profit to as high as $1.81 a share this year. That would top analysts’ estimates of $1.35 billion in sales and $1.64 a share.

US

By Rita Nazareth

Sept. 7 (Bloomberg) — U.S. stocks rose for the week, sending the Standard & Poor’s 500 Index to the highest since 2008, amid bets the Federal Reserve will stimulate the economy and as the European Central Bank announced a bond-buying plan.

Bank of America Corp. and JPMorgan Chase & Co. climbed at least 5.8 percent for the week, following a surge in European lenders. Newmont Mining Corp., the largest U.S. gold producer, jumped 2 percent as the metal rose to a six-month high.

Amazon.com Inc. added 4.4 percent after introducing a new line of Kindle e-readers and tablets. Facebook Inc. rallied 5.1 percent after Chief Executive Officer Mark Zuckerberg said he won’t start selling his holdings for at least a year.

The S&P 500 added 2.2 percent to 1,437.92, snapping a two- week decline, in its biggest rally since June. It rose within 10 percent of its all-time high in October 2007. The Dow Jones Industrial Average gained 215.80, or 1.6 percent, to 13,306.64, its highest level since December 2007.

“It’s turned into a central bank put,” Ryan Larson, Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in a phone interview. His firm oversees $250 billion in assets. “Europe continues to move in the right step. In the U.S., there was no relief to Bernanke’s ‘grave concern’ about unemployment. The market is sensing that this will increase the odds if not force the Fed’s hands to announce some kind of additional policy easing.”

Bets on further stimulus measures grew as data showed payrolls rose less than projected and the unemployment rate was unexpectedly driven down by Americans leaving the labor force.

On Aug. 31, Fed Chairman Ben S. Bernanke cited his concern about the jobless rate and said the central bank will provide additional stimulus as needed to promote a stronger recovery.

The Fed’s Open Market Committee meets in the coming week and will release a statement on Sept. 13.

American equities also joined a global rally as ECB President Mario Draghi announced an unlimited bond-buying program. Draghi said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.”

“It looks like the European Union is going to survive at least for a while,” said Byron Wien, vice chairman of the advisory services unit of Blackstone Group LP, the world’s biggest private-equity firm. He spoke in a Sept. 6 phone interview from New York. “Mario Draghi looks like he’s serious about doing whatever it takes to provide liquidity.”

All 10 groups in the S&P 500 rallied during the holiday- shortened week as commodity and financial shares had the biggest gains, adding at least 3.5 percent. The Morgan Stanley Cyclical Index of companies most-tied to the economy advanced 3.6 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, tumbled 18 percent, the most since June, to 14.38.

The KBW Bank Index of 24 stocks gained 4.4 percent. The Financial Select Sector SPDR Fund, an exchange-traded fund, climbed 3.4 percent. Bank of America added 10 percent, the biggest gain in the Dow, to $8.80. JPMorgan increased 5.8 percent to $39.30. Morgan Stanley rallied 14 percent to $17.08.

SunTrust Banks Inc. jumped 9.3 percent to $27.50. The eighth-largest U.S. lender by deposits announced plans to liquidate its stake in Coca-Cola Co. to help cover costs of restructuring bad loans.

Hartford Financial Services Group Inc. rose 8.6 percent to $19.47. The insurer agreed to sell its retirement-plans business for $400 million to Massachusetts Mutual Life Insurance Co.

Gold producers rallied as the metal topped $1,700 an ounce on speculation that the Fed will provide further stimulus measures, lifting demand for gold as an inflation hedge. Newmont Mining added 2 percent to $51.69. Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, rose 9.2 percent to $39.43.

Amazon.com increased 4.4 percent to a record $259.14. Chief Executive Officer Jeff Bezos is retooling the company’s tablets as consumers face a widening array of choices, including new entries from Google Inc. and Microsoft Corp. At stake is a piece of a market that may reach $66.4 billion this year, according to research firm DisplaySearch.

Facebook jumped 5.1 percent to $18.98. Zuckerberg has yet to adopt a share sale plan, the Menlo Park, California-based company said in a filing with the U.S. Securities and Exchange Commission. The shares had been marking record lows since the first share sale lockup for insiders expired in August amid concern that businesses are spending less to advertise on the world’s largest social-networking website.

Apple Inc. climbed 2.3 percent to a record $680.44 after the company sent out invitations to a Sept. 12 product event in San Francisco, where it is expected to unveil a new iPhone with a larger screen and thinner body. The shares have risen more than sevenfold since Apple co-founder Steve Jobs introduced the first iPhone in January 2007.

The company is considering introducing an online service to stream music based on users’ tastes, according to two people with knowledge of the plans.

Navistar International Corp. rallied 13 percent to $24.76.

The maker of International brand trucks reported third-quarter results that topped analysts’ estimates. Lewis Campbell, who became interim chief executive officer after Dan Ustian was ousted amid an inquiry from regulators, said he expects “significant improvements” in the next 12 to 18 months.

Walgreen Co. slumped 2.3 percent to $34.94 after posting fiscal fourth-quarter revenue that trailed estimates. Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Inc. customers expired.

Kraft Foods Inc., the foodmaker that will split into two companies next month, fell 3.7 percent to $39.99 after Chief Financial Officer David Brearton told investors that 2012 and 2013 profit may be lower than expected.

VeriFone Systems Inc. tumbled 6.5 percent to $32.48 after the maker of credit-card terminals reported third-quarter sales that fell short of analysts’ estimates, citing unfavorable currency swings, competition in Europe and a fire in Brazil.

Have a wonderful weekend everyone.

Be magnificent!

I have always fought not to project but to be myself.

To retain my own scale, which is a dot, but a vibrating dot, a pulsating dot that is what I’d like to be.

I would like to remain that pulsating dot

which can reach out to the whole world, to the universe.

Chandralekha, 1929-2006

As ever,

Carolann

Turns out if you never lie, there’s always

someone mad at you.

-Scott Westerfeld, 1953-

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