Month: June 2011

Dear Friends,

 HAPPY DAYS 

I had been lucky enough in my 20s to stumble into the life I might have dreamed of as a boy:  a great job writing on world affairs for Time magazine, an apartment on Park Avenue, enough time and money to take vacations in Burma, Morocco, El Salvador.  But every time I went to one of those places, I noticed that the people I met there, mired in difficulty and often warfare, seemed to have more energy and even optimism than the friends I’d grown up with in privileged, peaceful Santa Barbara, Calif., many of whom were on their fourth marriages and seeing a therapist every day.  Though I knew that poverty certainly didn’t buy happiness, I wasn’t convinced that money did either.

 So, as post-1960s cliché decreed, I left my comfortable job and life to live for a year in a temple on the back streets of Kyoto.  My high-minded year lasted all of a week, by which time I’d noticed that the depthless contemplation of the moon and composition of haiku I’d imagined from afar was really  more a matter of cleaning, sweeping and then cleaning some more.  But today, more than 21 years later, I still live in the vicinity of Kyoto, in a two-room apartment that makes my old monastic cell look almost luxurious.  I have no bicycle, no car, no television I  can understand, no media – and the days seem to stretch into eternities, and I can’t think of a single thing I lack.

                                            -PICO IYER, from “The Joy of Less”

Secretary of State Hillary Rodham Clinton watches a cultural dance as she is welcomed at Lusaka International Airport in Lusaka, Zambia.

Susan Walsh/AP

 

A seven-month-old yellow baboon drinks milk as it plays with a Galagos, also known as a bushbaby, at the Animal Orphanage in the Kenya Wildlife Service headquarters in Nairobi. Yellow baboons inhabit savannas and light forests in the eastern Africa, while Galagos are small, nocturnal primates native to continental Africa.

Thomas Mukoya/Reuters

Market Commentary:

 Canada

By Inyoung Hwang

     June 10 (Bloomberg) — Canadian stocks fell, headed for a second straight week of losses, as energy and metals producers led declines amid concern the global recovery is slowing and after a report said Saudi Arabia will raise oil production.

     Suncor Energy Inc. dropped 2.2 percent as the price of crude tumbled the most in four weeks. Barrick Gold Corp. and Goldcorp Inc., the two biggest producers of the metal by market value, dropped at least 1.3 percent as the price of gold fell on a stronger U.S. dollar. Research In Motion Ltd. lost 1.8 percent as Morgan Stanley said the company may cut forecasts and Goldman Sachs Group Inc. recommended investors sell the shares.

     The Standard & Poor’s/TSX Composite Index retreated 200.47 points, or 1.5 percent, to 13,055.27 at 1:42 p.m. in Toronto, below its 200-day moving average. The S&P/TSX rose yesterday after declining seven straight days, the longest streak of losses since June 2006.

     “Investors are getting nervous that what’s driven the markets for the last nine months — easy monetary policy and the expectation that the economy is healing itself — has waned,”

said Todd Johnson, who helps oversee C$230 million ($228 million) as a money manager at BCV Asset Management in Winnipeg, Manitoba. “You throw in commodity inflation and the potential for a Chinese slowdown, and it’s a summer of discontent perhaps.”

     Commodity prices and global stocks fell today after China reported a less-than-estimated trade surplus in May. Stocks also fell after the Bank of Korea raised interest rates for a third time this year to rein in inflation.

     Canadian stocks fell even after a Statistics Canada said today in Ottawa the country’s jobless rate unexpectedly declined in May to the lowest since January 2009 as the economy added workers for the seventh time in eight months.

     The S&P/TSX fell 4.2 percent from May 30 through yesterday as U.S. statistics on employment and manufacturing trailed economists’ forecasts and U.S. Federal Reserve Chairman Ben S. Bernanke called his country’s economic recovery “frustratingly slow.”

     Suncor fell 2.2 percent to C$37.96. Canadian Natural Resources Ltd. declined 2 percent to C$39.64. Crude oil tumbled to $99.20 a barrel, the most since May 11 after al-Hayat newspaper reported Saudi Arabia will raise oil production to 10 million barrels a day next month. London-based al-Hayat cited unidentified senior OPEC and industry officials as the sources of the Saudi output plan.

     Barrick Gold declined 1.7 percent to C$44.52, while Goldcorp slid 1.3 percent to C$45.81. Gold futures fell the most in a week as lower energy costs eroded the appeal of the precious metal as a hedge against inflation.

     Base-metals and coal producer, including Teck Resources Ltd. and First Quantum Minerals Ltd, also fell. Teck, the country’s largest company in the industry lost 3.8 percent to C$45.69. Vancouver-based First Quantum slid 1.7 percent to C$120.30.

     “There’s a lot of fast money in commodities,” Johnson said. “The trade where the U.S. dollar falls and you put your money in commodities is a popular investment. Perhaps there’s just too much money in that area and when the trade turns out, there’s a lot of people wanting to get out quickly.”

     Research In Motion erased 1.8 percent to C$35.96. The Blackberry smartphone maker has slumped 38 percent this year after missing profit estimates and cutting forecasts. Morgan Stanley said the company may reduce its forecast for 2012 and that estimates for the second quarter will be disappointing.

     Separately, Goldman Sachs recommended selling shares ahead of the first quarter earnings report on June 16.

     Financial stocks also declined as the S&P/TSX Financials Index slumped 1.2 percent to 1,693.15. Toronto-Dominion Bank fell 1.5 percent to C$78.61, while Bank of Nova Scotia erased 1.5 percent to C$57.36.

     The biggest Canadian athletic-wear retailer Lululemon Athletica Inc. rallied 5 percent to C$88.12 after the company forecast profit in 2010 to be at least $2.10 a share, up from an earlier guidance of no more than $2 and exceeding the average analyst estimate of $2.05.

US

By Rita Nazareth

     June 10 (Bloomberg) — U.S. stocks fell, extending the longest weekly Dow Jones Industrial Average slump in more than eight years, amid concern the global economy is slowing.

     Caterpillar Inc. and Boeing Co. dropped at least 2 percent, pacing losses among companies most-tied to economic growth.

     Exxon Mobil Corp. fell 1.7 percent as crude oil tumbled the most in four weeks. A gauge of banks in the Standard & Poor’s 500 Index fell 0.3 percent, paring a 2.2 percent slump, after CNBC reported that international regulators are considering toning down proposed capital rules for large banks.

     The S&P 500 fell 1.4 percent to 1,270.98 at 4 p.m. in New York. It has retreated six straight weeks, the longest slump since 2008. The Dow dropped 172.45 points, or 1.4 percent, to 11,951.91. Its last six-week slump ended in October 2002, the start of a five-year bull market. The Russell 2000 Index and the Nasdaq Composite Index erased their 2011 gains today.

     “It’s a shortage of buyers,” said Michael Shaoul, chairman of Marketfield Asset Management, which oversees $1 billion in New York. “The economically sensitive stuff is going to be weak while the data is weak. In addition, we’re going to go through a period of over-regulation of the large banks. It’s going to lead to significantly less profitability.”

     About $1 trillion was erased from American equity markets between the S&P 500’s peak on April 29 and yesterday amid weaker-than-expected economic reports. The index has retreated 6.8 percent since the end of April as sales of existing homes unexpectedly declined, growth in industrial production stopped and the unemployment rate rose.

     Federal Reserve Chairman Ben S. Bernanke said this week that the U.S. recovery was “frustratingly slow.” He also said the central bank should maintain record monetary stimulus, while giving no indication he was planning a third round of asset purchases known as quantitative easing, or QE3.

     Global stocks fell today after China reported a lower-than- estimated $13.1 billion trade surplus in May, as surging imports signaled the nation’s demand may support global growth while adding pressure for higher interest rates. Stocks also fell after U.K. manufacturing dropped more than economists forecast as an extra public holiday for the royal wedding hurt orders and the impact of the Japanese earthquake hit supplies.

 Have a wonderful weekend everyone.

Be magnificent!

 What is the world?  It is the earth below and the sky above and the air in space that connects them.What is light?  It is fire below and the sun above – and the lightning that connects them.What is education?  It is the teacher above and the disciple below – and the wisdom that connects them.

 Taittiriya Upanishad

As ever, 

Carolann 

Confidence is contagious. So is lack of confidence.

  -Vince Lombardi, 1913-1970 

 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President & Senior Investment Advisor

 

 

Dear Friends, I read this article with amusement in The  Financial Times on the weekend:

In praise of feuds

Literary giants produce beauty, truth and good old fights

It took 15 years and the expectoration of much bilious invective, but Paul Theroux and V. S. Naipaul are friends again.  With a little encouragement from Ian McEwan, their fellow author, the two distinguished men of letters have buried the hatchet and, rumour has it, may even resume their old habit of lunching together.  So ends a celebrated literary feud – though more than one reader will feel a pang of sorrow at its passing.

  From Fyodor Dostoyevsky’s quarrels with Ivan Turgenev to Ernest Hemingway’s falling out with Gertrude Stein, the history of literature is replete with venomous disputes that make the feud between the Montagues and Capulets look like an Italian playground squabble.  Gabriel Garcia Marquez and Mario Vargas Llosa, the twin titans of Latin American literature, came to blows in a Mexican cinema in the 1970s and did not speak for 30 years.

  After Gore Vidal likened the late Norman Mailer to Charles Manson, the serial killer, Mailer – who had  a mean right uppercut as well as a talent for writing – threw a hefty punch at Mr. Vidal.  Dazed and flat on the floor, Mr. Vidal responded with a typical verbal jab:  “As usual, words fail Norman Mailer.”

  Some authors generously admit to standing on the shoulders of giants, but not Mr. Vidal, who upon hearing of Truman Capote’s death observed that it was “a good career move.”

  Novelists, playwrights and poets are not inherently more bitchy than actors, composers, television presenters or pop stars.  But their feuds are more fascinating, because their genius lies in harnessing the power of words to produce beauty and truth.  When genius descends into petty but exquisitely phrased abuse, the rest of us look on with horrified admiration.

  Even so, V.S. Naipaul, now 78 years old, surely went too far this week when he dismissed the fictional work of Diana Athill, his 93-year-old publisher, as “feminine tosh”.  Can’t he pick on someone his own age?

photos of the day 

June 9, 2011

Master of Hounds, (l.), looks at his neighbor, Viscount Nelson, at Belmont Park in Elmont, N.Y. Master of Hounds, trained in Ireland, is entered in Saturday’s Belmont Stakes.

Mark Lennihan/AP

Pilgrims make their way to the shrine of El Rocio during the annual pilgrimage in which hundreds of thousands of devotees of the Virgin del Rocio converge in and around the shrine in Villamanrique, Spain.

Miguel Angel Morenatti/AP

Market Commentary:

Canada

By Matt Walcoff

    June 9 (Bloomberg) — Canadian stocks rose, ending the longest Standard & Poor’s/TSX Composite Index losing streak since 2006, as fertilizer producers gained after the U.S. cut crop-supply forecasts and precious-metals companies advanced on speculation the European debt crisis will worsen.

     Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 3.4 percent as corn futures climbed. Kinross Gold Corp., Canada’s third-biggest producer of the metal, gained 3.3 percent as the euro retreated against 13 of 16 other major currencies. Sino-Forest Corp., the forestry company that has plunged 72 percent since a short seller said it manipulated financial data, rallied 4.7 percent.

     The Standard & Poor’s/TSX Composite Index rose 71.95 points, or 0.6 percent, to 13,255.74 after closing at the lowest level relative to earnings since September yesterday.

     The decline in valuations is attracting investors back into the stock market, said John Kinsey, a money manager at Caldwell Investment Management Ltd. in Toronto, which oversees about C$1 billion ($1 billion). “We’re getting bottom-fishers or people that are bargain-hunting,” he said.

     The index’s seven-day streak of declines was the longest since 2006. The index fell 4.7 percent from May 30 to yesterday as U.S. statistics on employment and manufacturing trailed economists’ forecasts and U.S. Federal Reserve Chairman Ben S.

Bernanke called his country’s economic recovery “frustratingly slow.”

     Potash Corp. advanced for the first time in five days, rallying 3.4 percent to C$53.98, as the U.S. Agriculture Department today cut its year-end estimates for corn and wheat stocks more than most analysts had forecast. Agrium Inc., Canada’s second-largest fertilizer producer, increased 2.6 percent to C$82.49.

     European Central Bank President Jean-Claude Trichet said today “strong vigilance” is necessary to restrain inflation, signaling the bank will raise interest rates next month.

     The euro declined after Trichet’s statement, indicating traders believe the most-indebted Western European countries will be unable to handle higher interest rates, Peter Boockvar, a strategist at Miller Tabak & Co. in New York, said in an e- mail to clients. Precious-metals producers gained.

     Kinross rose 3.3 percent to C$15.25. Eldorado Gold Corp., which mines in China and Turkey, advanced for the first time in nine days, increasing 2.1 percent to C$14.09. First Majestic Silver Corp., which operates in Mexico, climbed 5.6 percent to C$18.21 as silver climbed 2.2 percent.

     The S&P/TSX Financials Index gained after closing yesterday at an 11-month low relative to earnings. Royal Bank of Canada, the country’s largest lender by assets, rose 0.9 percent to C$54.86. Bank of Nova Scotia, the No. 3 Canadian lender, advanced 0.9 percent to C$58.24.

     Sino-Forest rose 4.7 percent to C$5.15. The shares have fallen from C$18.21 on June 1, the day before Muddy Waters Research said the company lied about its finances. The company, which operates in China, yesterday asked Canadian regulators to investigate Muddy Waters.

     Muddy Waters’ founder, Carson Block, said the company’s disclosures of land holdings don’t match Chinese city records and that its production may be overstated. Sino-Forest has denied the assertions and published documents on its website that it says back up its financial statements.

     Construction-products maker Armtec Infrastructure Inc. sank 59 percent to a record low of C$4.35 after suspending its dividend. In a press release, the company cited “unprecedented weather conditions across the country and margin compression.”

     Uranium One Inc. fell for a record ninth-straight day, dropping 6.2 percent to C$2.90. Japan may evacuate more towns affected by radiation from the Fukushima Dai-Ichi nuclear plant, the Wall Street Journal reported.

US

By Rita Nazareth

     June 9 (Bloomberg) — U.S. stocks advanced, snapping a six- day decline, as the trade deficit unexpectedly narrowed amid record exports and consumer confidence improved.

     The Morgan Stanley Cyclical Index of companies most-tied to economic growth rose 1 percent. Mosaic Co. and CF Industries Holdings Inc. paced gains among fertilizer producers, climbing at least 4.2 percent, after the government reduced its corn-crop estimate. American International Group Inc. advanced 2.9 percent as Deutsche Bank AG recommended buying the shares. Brown-Forman Corp. added 2 percent after the maker of Jack Daniel’s whiskey reported earnings that beat analysts’ estimates.

     The Standard & Poor’s 500 Index gained 0.7 percent to 1,289 at 4 p.m. in New York. The benchmark gauge yesterday fell to 12.1 times its companies’ forecast operating earnings, the cheapest valuation since August, according to data compiled by Bloomberg. The Dow Jones Industrial Average increased 75.42 points, or 0.6 percent, to 12,124.36 today.

     “The stock market got oversold,” said James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, which oversees $110 billion. “We’ve got some positive news against the string of poor economic data of the last few weeks. Earnings are still pretty strong. There’s value out there if you want to build a long-term position.”

     The S&P 500 yesterday completed its longest slump since February 2009 on concern the economy is slowing. A report last week showed that payrolls grew at the slowest pace in eight months. The benchmark equity index doubled from its March 2009 low to 1,363.61 on April 29, its highest level since June 5, 2008, as earnings topped estimates for nine straight quarters.                     

     Stocks rose today as a report showed that the U.S. trade deficit unexpectedly narrowed in April, reflecting a plunge in auto and oil imports combined with record exports. The gap shrank 6.7 percent to $43.7 billion, the lowest since December, Commerce Department figures showed. Exports increased 1.3 percent to $175.6 billion, boosted by sales of fuel oil, petroleum products and computers.

     A separate report showed that consumer confidence rose last week for the third consecutive time as lower gasoline prices lifted Americans’ outlook on their finances. The Bloomberg Consumer Comfort Index climbed to minus 45.9 in the period to June 5, the best showing since the end of April, from the prior week’s minus 47.1. Across income groups, sentiment improved the most among those making less than $50,000 a year.

     Benchmark indexes advanced even as initial jobless claims unexpectedly rose by 1,000 to 427,000 last week, the Labor Department said. Economists surveyed by Bloomberg News projected a drop to 419,000, according to the median forecast.

     Today’s rally in stocks also happened after the S&P 500 yesterday got close to its average price of the last 200 days, a level monitored by analysts and traders who study charts to make forecasts. The index yesterday closed at 1,279.56, about 2 percent above its 200-day moving average.

     “That’s a very significant level,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati. “That’s where we expect some buyers to step in to defend the longer-term trend.”

     A gauge of raw material shares led the gains in the S&P 500 within 10 industries, rallying 1.6 percent.

     Fertilizer stocks rose as the government said that the U.S. corn harvest may be 2.3 percent smaller than forecast in May as farmers reduced acreage because of excessive Midwest rains.

     Mosaic, North America’s second-largest fertilizer producer, gained 4.8 percent to $68.84. CF Industries increased 4.2 percent to $154.86. Makers of agriculture machinery also climbed. Agco Corp. rose 2.5 percent to $48.24. Deere & Co. jumped 2.6 percent to $82.                    

     AIG advanced 2.9 percent to $28.10. Deutsche Bank recommended buying the shares of the insurer, saying that earnings consistency should drive the stock higher.

     The insurer may buy mortgage-backed securities from European banks seeking to bolster their balance sheets as the company works to boost investment results, Deutsche Bank wrote in a note to investors. AIG Chief Executive Officer Robert Benmosche is hunting for assets to add to the investment portfolio after the Federal Reserve Bank of New York rejected his $15.7 billion offer to buy back a pool of mortgage bonds turned over as part of the company’s bailout.

     Brown-Forman rose 2 percent to $71.75. The maker of Jack Daniel’s whiskey and Finlandia vodka reported fourth-quarter earnings of $1.13 a share. On average, the analysts surveyed by Bloomberg estimated profit of 64 cents.                         

     Banks had the biggest gain in the S&P 500 within 24 industries, rising 1.9 percent as a group. The KBW Bank Index of 24 stocks advanced 1.2 percent. Wells Fargo & Co. rallied 3.4 percent to $26.22. JPMorgan Chase & Co. rose the most in the Dow, adding 1.5 percent to $40.98.

     Goldman Sachs Group Inc. rose 1.5 percent to $133.53 after agreeing to pay a $10 million fine and stop holding private meetings of stock analysts and traders known as “huddles” to settle an investigation by Massachusetts’s chief securities regulator.

     The settlement ends a two-year probe by William Galvin, the secretary of the commonwealth, into New York-based Goldman Sachs’s “Asymmetric Service Initiative,” in which information on analysts’ trading ideas was disseminated earlier to favored clients. The company will “permanently discontinue” the practice, Galvin’s office said in a statement today.

     Macy’s Inc. gained 1.1 percent to $28.13. The second- biggest U.S. department-store chain was raised to “overweight” from “equal weight” at Barclays. The share-price estimate is $35.                       

     The Dow dropped for five straight weeks through June 3, with one disappointing economic report after another. That’s the longest streak of declines for the Dow since 2004. Still, the grim news is doing little to reduce bullishness among U.S. money managers and market strategists such as JPMorgan Chase & Co.’s David Kelly and Liz Ann Sonders of Charles Schwab Corp., who say profit growth and below-average valuations will lift equities this year.

     “The economy is still growing, albeit at a slow pace, and sufficient for corporate revenues, corporate earnings and corporate cash flow to advance,” said Bob Doll, who helps oversee $3.65 trillion at New York-based BlackRock Inc., the world’s biggest money manager. “We’re at the end of the recovery and the beginning of the expansion. That’s typically a time when stocks still go up, just at a lesser pace.”

Have a wonderful day.

Be magnificent!

I hold that true education of the intellect can only come through a proper exercise

and training of the bodily organs, e.g., hands, feet, eyes, ears, nose, etc.

In other words an intelligent use of the bodily organs in a child provides

the best and quickest way of developing his intellect.

But unless the development of the mind and body goes hand in hand

with a corresponding awakening of the soul,

the former alone would prove to be a poor lopsided affair.

By spiritual training I mean education of the heart.

    Mahatma Gandhi, 1869-1948

As ever,

Carolann

Cherish your own emotions and never

undervalue them.

           -Robert Henri, 1865-1929

 

Dear Friends,

The Duke of Ever-blunt

The Duke of Edinburgh turns 90 this week.  Some of his memorable comments, according to listverse.com:

• To the Queen, after her coronation: “Where did you get the hat?”
• When asked if he would like to visit the Soviet Union: “The bastards murdered half my family.”
• To Elton John after hearing he had sold his Gold Afton Martin: “Oh, it’s you that owns that ghastly car – we often see it when driving to Windsor Castle.”
• To the president of Nigeria, dressed in traditional robes: “You look like you’re ready for bed!”
• On key problems facing Brazil: “Brazilians live there.”

We shall all be old one day – provided, of course, we can

avoid being slaughtered on the roads or beaten up by some

hooligan in a peace demonstration.

              -Prince Philip, Duke of Edinburgh, 1921-

-from The Globe & Mail, Wednesday, June 8^th, 2011

photos of the day

June 8, 2011

A medium-sized solar flare erupted from the sun in an impressive display captured by NASA cameras aboard an orbiting satellite called the Solar Dynamics Observatory. NASA says the flare peaked Tuesday and created a large cloud that appeared to cover almost half the surface of the sun.

NASA/SDO/AP

A woman walks her dog past a wall near the seafront in Brighton, England.Cathal McNaughton/Reuters

A man looks at the work ‘Organ Mapping’ by Mariechen Danz at the Based in Berlin exhibition in Berlin. The exhibition shows the work of 80 emerging artists who live and work in Berlin.

Thomas Peter/Reuters

Canada

By Matt Walcoff

     June 8 (Bloomberg) — Canadian stocks fell to a six-month low as metal prices dropped a day after U.S. Federal Reserve Chairman Ben S. Bernanke called his country’s economic recovery “frustratingly slow.”

     Barrick Gold Corp., the world’s largest gold producer, declined 2 percent as the U.S. dollar rose. Contract driller Major Drilling Group International Inc. tumbled 6.6 percent after reporting earnings that missed analyst estimates. Sino- Forest Corp., the forestry company that plunged after a short seller said it manipulated financial data, gained 21 percent after analysts at Royal Bank of Canada and Dundee Securities Ltd. expressed confidence in the company.

     The Standard & Poor’s/TSX Composite Index retreated 99.13 points, or 0.8 percent, to 13,183.79, the lowest close since Dec. 16 and the first under the 200-day moving average since Aug. 25. The S&P/TSX has declined seven straight days, the longest streak of losses since June 2006.

     “We continue to have poor numbers” from the U.S., said Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, which manages C$18 billion ($18 billion). “With 70 percent or 80 percent of exports that go to the U.S., if you have an economy that’s not going as well as we thought, it’s certainly a negative for the TSX.”

     The stock benchmark has dropped 4.7 percent since May 30 as data on U.S. employment and manufacturing and Canadian building permits reflected slowing growth. The index closed at its lowest price relative to earnings since September.                      

 Bernanke’s speech in Atlanta yesterday indicated a third round of asset purchases known as quantitative easing is unlikely, according to Sung Won Sohn, an economics professor at California State University-Channel Islands and former chief economist at Wells Fargo & Co.

     The U.S. Dollar index extended its gains after Germany said industrial production dropped in April and German Finance Minister Wolfgang Schaeuble said bondholders must contribute a “substantial” share of a second aid package for Greece.

     Gold futures slipped while silver slumped 1.1 percent.

Barrick declined for a seventh day, losing 2 percent to C$43.36.

Eldorado Gold Corp., which mines in China and Turkey, decreased 2.5 percent to C$13.80 for an eighth-straight loss, the longest streak since 1997.                      

     Silver Wheaton Corp., Canada’s fourth-biggest precious- metals company by market value, retreated 3.5 percent to C$31.76. Silvercorp Metals Inc., which produces the metal in China, sank 11 percent, the most in two years, to C$8.54.

     Base-metals and coal producers fell as copper futures dropped. Teck Resources Ltd., Canada’s largest company in the industry, declined 1.3 percent to C$46.63. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, lost 3.3 percent to C$122.05. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, decreased 2.3 percent to C$21.47 after closing at an eight-month low yesterday.

     Major Drilling sank 6.6 percent to a six-month low of C$12.85 after its fourth-quarter profit trailed the average of six analyst estimates by 37 percent, excluding certain items.

     Westport Innovations Inc., which develops natural-gas engine technologies, plunged 15 percent, the most since February 2009, to C$19.36 after reporting a larger fourth-quarter loss than all eight analysts in a Bloomberg survey had estimated.

     Uranium producers retreated after the New York Times said energy and nuclear officials from several countries pledged to enhance nuclear-safety rules.

     Cameco Corp., the world’s largest uranium producer, fell 2.4 percent to C$25.88. Uranium One Inc., a mining company controlled by ARMZ Uranium Holding, slumped 6.9 percent to a nine-month low of C$3.09. Denison Mines Corp. dropped 9.2 percent to C$1.78.

     Sino-Forest advanced 21 percent to C$4.92. In a note dated yesterday and made public today, Paul Quinn, a Royal Bank analyst, reiterated an “outperform” rating on the company.

     Richard Kelertas, an analyst at Dundee Securities, said on a conference call yesterday that the assertions made by short seller Carson Block are unfounded.

     The shares had plunged 78 percent from June 1 to yesterday.

On June 2, Block, the founder of Hong Kong-based Muddy Waters Research, said Sino-Forest’s stated land holdings do not match Chinese city records and its disclosed production may be inaccurate. The company has denied the statements and published documents on its website it says support its published financial data.

     BlackBerry maker Research In Motion Ltd. lost 2.7 percent to C$35.93, a four-year low. Stephen Patel, an analyst at Gleacher & Co., cut his 12-month price estimate on RIM’s U.S.- traded share to $43 from $56, citing competition and “uncertainty over new handset launches” in a note to clients.

US

By Rita Nazareth

     June 8 (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the longest losing streak since February 2009, as raw-material and financial shares slumped amid growing concern the economy is slowing.

     Visa Inc. and MasterCard Inc. fell at least 1.5 percent after the U.S. Senate rejected a six-month delay of a Federal Reserve rule capping debit-card swipe fees set by the companies.

Ciena Corp., the maker of network gear for the biggest U.S. phone companies, tumbled 16 percent after reporting a wider- than-estimated loss. Gap Inc. slumped 2.4 percent after Barclays Plc cut its recommendation for the largest U.S. apparel chain.

     The S&P 500 fell 0.4 percent to 1,279.56 at 4 p.m. in New York, dropping for a sixth day. The Dow Jones Industrial Average slid 21.87 points, or 0.2 percent, to 12,048.94 today.

     “There’s enough fear,” said Sara Zervos, a New York-based portfolio manager at OppenheimerFunds Inc., which managed more than $185 billion as of March 31. “We’re getting into that negative side of things. This is a soft spot granted it’s been a very significant string of bad data.”

     Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. recovery was “frustratingly slow.” From March 16, when the S&P 500 fell to its lowest level of the year, industries less-tied to economic growth — health care, consumer staples, telecommunications and utilities — have risen the most among 10 groups in the index.

     The Fed today said the economy expanded at a “steady pace” in most of the U.S. while slowing in four of 12 regions as consumers contended with higher food and fuel prices and shortages of parts reduced auto production.

     Reports from the Fed’s district banks “indicated that economic activity generally continued to expand since the last report, though a few districts indicated some deceleration,” the Fed said today in its Beige Book survey of the economy in Washington.

     Manufacturing “continued to expand in most parts of the country,” while slowing in some areas. Consumer spending was “mixed,” it said, while the job market improved “gradually across most of the nation.”

     Stocks extended a worldwide slump today after the World Bank said global gross domestic product may expand 3.2 percent this year, less than the 3.3 percent forecast in January. German industrial production unexpectedly declined for the first time in four months in April, the government said.                         

     Visa dropped 3.9 percent to $76.71. MasterCard declined 1.5 percent to $270.

     Senator Richard Durbin of Illinois, the No. 2 Democrat in the chamber, led the opposition to the delay amendment, which was defeated in a 54-45 vote. The measure needed 60 votes for approval. The central bank now has until July 21 to implement the final rule on capping the fees, which accounted for more than $16 billion in 2009, according to the Fed.

     In December, the Fed proposed capping the swipe fees, or interchange, at 12 cents a transaction, replacing a formula that averages 1.14 percent of the purchase price.

     Ciena tumbled 16 percent to $20.29. The maker of network gear for the biggest U.S. phone companies reported second- quarter adjusted loss of 24 cents a share. On average, the analysts surveyed by Bloomberg estimated a loss of 11 cents. JDS Uniphase Corp. fell 5.5 percent to $17.40.

     Gap retreated 2.4 percent to $17.49. Barclays cut its recommendation for the largest U.S. apparel chain to “equal weight” from “overweight,” citing risks to sales improvement.

     A gauge of raw material stocks in the S&P 500 sank 1 percent, the most within 10 groups, amid concern about slower demand for metals. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, dropped 1.9 percent to $48.82. Alcoa Inc. decreased 1.8 percent to $15.41.

     Energy shares gained the most among 10 S&P 500 industry groups as crude oil rose. Secretary General Abdalla el-Badri of the Organization of Petroleum Exporting Countries said ministers were unable to reach a decision on production quotas at their meeting in Vienna today and will maintain their current output.

     Exxon Mobil Corp. added 1 percent to $80.76 for the third- biggest gain in the Dow. The world’s largest energy company by market value discovered the equivalent of 700 million barrels of oil in three deep-water Gulf of Mexico wells.

     Cabot Oil & Gas Corp. climbed 4.3 percent, the most in the S&P 500, to $58.31. The Houston-based natural gas producer was boosted to “buy” from “hold” at Canaccord Genuity, which cited “significantly higher” expected output at Marcellus Shale fields.               

     U.S. stocks whose earnings are most correlated to economic growth may decline more than other industries as a gauge of the shares nears its 200-day moving average, according to top-ranked UBS AG technical analysts.

     The Morgan Stanley Cyclical Index of 30 stocks, including Alcoa Inc. and Ford Motor Co., may fall 3 percent to 980 if it breaches major support levels at 1,024 and 1,010, according to a report from UBS analysts Michael Riesner and Marc Muller yesterday. The gauge closed at 1,035.20 yesterday.

     “From a cyclical standpoint, the month of June should be weak for risk assets,” Riesner and Muller wrote in the report.

“On a short-term basis, the U.S. market looks oversold and could bounce later this week, but given the poor picture in technical indicators and the increasing technical damage in key sectors, new lows in financials and cyclicals/energy complex sitting on key support, we are sticking to our cautious market stance.”

Have a wonderful evening everyone.

Be magnificent!

A child must be brought up to understand the word no.  He should be taught yes first of all,

then, yes and no, then no and yes, in such a way that he gradually comes to realize, that there is really only no.

A child’s education is learning to understand no, and this enables him to grow.

Growing up means accepting the concept of no.

-Swami Prajnanpad,1891-1974

As ever,

Carolann

Maturity is only a short break in adolescence.

                         -Jules Feiffer, 1929-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends, another beautiful day has come and gone…here are the numbers for the day!

To be overcome by the fragrance of flowers
is a delectable form of defeat
. . . Beverly Nichols

Photos of the day

A giant Vesak Day display featuring a seated Buddha during the annual Buddhist festival in Colombo, Sri Lanka.

 

Buddhist followers light candles at the Borobudur temple during Vesak Day. Buddhists in Indonesia celebrate Vesak at the monument anually, which makes it the most visited tourist attraction in Indonesia. It is observed during the full moon in May or June. (Ulet Ifansasti/Getty Images)

Canada

By Matt Walcoff and Nikolaj Gammeltoft

June 7 (Bloomberg) — Canadian stocks fell for a sixth day as Research In Motion Ltd. retreated after an analyst downgrade and gold stocks slipped as concern over the European debt crisis lessened. BlackBerry maker Research In Motion declined 3.2 percent after Morgan Keegan & Co. reduced its rating on the shares to “market perform” from “outperform.” Kinross Gold Corp., Canada’s third-largest gold producer, declined 1.4 percent as the metal retreated from a five-week high. Sino-Forest Corp., a forest-products producer with operations in China, sank 34 percent after short seller Carson Block said he will release new research on the company.  

The Standard & Poor’s/TSX Composite Index fell 35.74 points, or 0.3 percent, to 13,282.92 at 4 p.m. in Toronto after rising as much as 0.6 percent. The Canadian benchmark index fell in the last hour of trading as U.S. Federal Reserve Chairman Ben S. Bernanke, speaking in Atlanta, gave no hint of a new round of stimulus even as economic growth remains slow. “We’re all holding our breath here and hoping the worst is over,” said Barry Schwartz, a money manager at Baskin Financial Services Inc. in Toronto, which oversees C$400 million ($411 million). “Any way you slice it, the stock market is cheap, so it’s hard for me to imagine stocks are going to go lower.”  

The S&P/TSX has dropped 4 percent in the last six days of trading, erasing its gains for the year, as the U.S. reported an increase in unemployment and crude futures slipped. Energy companies make up 27 percent of Canadian stocks by market value, according to Bloomberg data.

 Precious Metals  

Precious-metals producers fell after European Central Bank President Jean-Claude Trichet indicated he endorsed measures to encourage investors to buy new Greek debt.  

Kinross declined 1.4 percent to C$15.07. Eldorado Gold Corp., which mines in China and Turkey, dropped for a seventh day, the longest streak since 2006, losing 2.3 percent to C$14.16.   

B2Gold Corp., which explores in Latin America, surged 9.1 percent to C$3.61 after reporting drilling results from Uruguay that it called “positive.” The shares touched an intraday record of C$3.67. Sino-Forest declined 34 percent to a four-year low of C$4.05 after Block, the founder of Muddy Waters Research, said he will release more research on the company “pretty soon.” The new research will concern Sino-Forest’s accounting, its majority stake in Greenheart Group Ltd. and its 2010 purchase of Homix Ltd, Block said on a conference call.                        

Sino-Forest

Shares of the Hong Kong- and Mississauga, Ontario-based company have plunged 78 percent since June 1, the day before Block asserted the company overstated its land holdings and production. The company has denied doing so and has hired accounting firm PricewaterhouseCoopers LLP to conduct its own investigation.  

Directory publisher Yellow Media Inc. slumped 4.5 percent to C$3.43 after closing at a record low yesterday. The shares have tumbled 30 percent since May 17, when San Francisco banned the unsolicited distribution of phone books. Research In Motion declined 3.2 percent to C$36.92 after Tavis McCourt, an analyst at Morgan Keegan & Co., reduced his rating on the shares to “market perform” from “outperform.” In a note to clients, McCourt said Apple Inc.’s new iMessage program threatens the popularity of RIM’s BlackBerry Messenger program. 

Saputo Inc. slumped 1.3 percent to C$46.50. Canada’s largest food producer reported fourth-quarter of 55 Canadian cents a share, missing the average of six analyst estimates in a Bloomberg survey by 1.8 percent.

US

By Michael P. Regan and Inyoung Hwang

June 7 (Bloomberg) — U.S. stocks fell for a fifth day, the longest drop for the Standard & Poor’s 500 Index in 11 months, and Treasuries erased losses as Federal Reserve Chairman Ben S. Bernanke gave no sign he is planning new stimulus efforts to bolster the weakening economy.    

The Standard & Poor’s 500 Index slipped 0.1 percent to 1,284.94 at 4 p.m. in New York, its lowest closing level since March 18. The 10-year U.S. Treasury yield decreased less than one basis point to 2.99 percent after rising as much as six points earlier, and two-year yields fell to their 2011 low. The euro climbed 0.8 percent to $1.4688, the strongest since May 5, as the European Central Bank signaled it may back Greek debt rollovers. Oil climbed on speculation increase in OPEC production quotas will reduce spare capacity.  

The S&P 500 erased a rally of as much as 0.8 percent, turning lower in the final 10 minutes of trading, as Bernanke said in a speech in Atlanta that the economic recovery remains “uneven” and “frustratingly slow.” While the Fed chief said the central bank should maintain record monetary stimulus, he gave no indication he was planning a third round of asset purchases known as quantitative easing, nicknamed “QE3” by investors.

“Bernanke had a bearish outlook on the state of the economy,” said Kevin Shacknofsky, who helps manage $7 billion in Purchase, New York, for Alpine Mutual Funds. “There may have been some expectation for him mentioning that QE3 was on the table. But the key issues were his comments on the poor momentum of the U.S. economy and job growth as well as the risks that any fiscal austerity measures could damage a fragile economy.”                                           

Slowing Growth

The S&P 500 is down 5.8 percent from an almost three-year high at the end of April as signs of a slowing economy spurred concern analyst estimates for 20 percent earnings growth this year are too optimistic. The slide has left the index trading at 12.2 times estimated profits of its companies, the cheapest forward valuation since last summer. Figures last week showed that payrolls grew at the slowest pace in eight months, the jobless rate unexpectedly rose to 9.1 percent and a private gauge of manufacturing expanded at the slowest pace in more than a year. “The economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed,” Bernanke, 57, said today in a speech to a conference in Atlanta. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”                                                      

Leading Declines

Cisco Systems Inc., Bank of America Corp. and Hewlett- Packard Co. lost at least 1 percent to lead declines in the Dow Jones Industrial Average, which reversed a gain of as much as 89 points to close down 19.15 points, or 0.2 percent, at 12,070.81.Intel Corp. rose 1.1 percent after Citigroup Inc. said that a potential foundry relationship may be forming with Apple Inc. International Paper Co. made a $3.31 billion hostile bid for Temple-Inland Inc., sending the target’s shares up 40 percent. International Paper, the world’s largest pulp-and-paper maker, advanced 0.4 percent.

Treasury two-year yields dropped two basis points to 0.41 percent. Yields on three-year notes dropped for a third day, slipping three basis points to 0.69 percent, after the U.S.government’s $32 billion auction of the debt drew the highest demand from a group including foreign central banks in five months. Longer-term debt yields were little changed before the $21 billion sale of 10-year notes tomorrow and the $13 billion 30-year bond offering June 9.                                                         

Euro Gains  

The euro advanced 0.8 percent against the yen and appreciated versus 12 of its 16 most-traded peers. The dollar weakened against 11 of 16 major counterparts.

The ECB isn’t opposed to private-sector creditors being asked to “maintain their level of outstanding credit,” ECB President Jean-Claude Trichet said in Montreal yesterday, the first sign he endorsed measures to encourage investors to buy new Greek debt to replace maturing securities. German Chancellor Angela Merkel told U.S. President Barack Obama yesterday that the 17-nation euro region will overcome its debt crisis.

Most European stocks declined, with the benchmark Stoxx Europe 600 Index falling 0.1 percent to near a 10-week low, as losses in retail shares offset gains in utility companies. Tesco Plc and Home Retail Group Plc fell as a report showed U.K. retail sales declined last month. Utilities posted the best performance among 19 industry groups in the Stoxx 600, gaining 1.2 percent. Mitchells & Butlers Plc surged 3.8 percent after a report that a group of investors may bid for the pub and restaurant owner.                                                   

Oil Erases Drop                         

Oil erased declines in the final 90 seconds of trading, rising 8 cents to $99.09 a barrel. The S&P GSCI Index gained 0.7 percent as sugar, brent crude and lean hogs climbed more than 2 percent to lead gains in 17 of 24 commodities tracked by the index, while cotton and wheat lost at least 1.3 percent for the biggest declines. The MSCI Emerging Markets Index gained 0.3 percent, after earlier falling more than 0.5 percent. Benchmark gauges in Russia and Turkey advanced more than 1 percent.South Korea’s Kospi index dropped 0.7 percent and the won weakened against most major peers as the nation’s financial markets traded for the first time since a June 3 report showed slower-than-expected growth in U.S. payrolls. Thailand’s SET Index lost 1.1 percent after Goldman Sachs Group Inc. lowered its rating on the country’s stocks. The Australian dollar slipped against 10 of its major counterparts after policy makers kept the nation’s benchmark interest rate unchanged for a sixth consecutive meeting and said current settings were appropriate.

A painter paints pictures on canvas.  But musicians paint their pictures on silence.  ~Leopold Stokowski

Be Magnificent!

As ever~

Summer for Carolann

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Today is the anniversary of the D-Day Invasion.

The D-Day operation of June 6, 1944 brought together the land, air and sea forces of the allied armies in what became known as the largest invasion force in human history.  The operation, given the codename OVERLORD, delivered five naval assault divisions to the beaches of Normandy, France.  The beaches were given the codenames UTAH, OMAHA, GOLD, JUNO and SWORD. A great invasion force stood off the Normandy coast of France as dawn broke on 6 June 1944: 9 battleships, 23 cruisers, 104 destroyers, and 71 large landing craft of various descriptions as well as troop transports, and mine sweepers, the largest armada ever assembled. The naval bombardment that began at 0550 that morning detonated large minefields along the shoreline.

The invasion force included 7,000 ships and landing craft manned by over 195,000 naval personnel from eight allied countries.  Almost 133,000 troops from England, Canada and the United States landed on D-Day.  Casualties from the three countries during the landing numbered 10,300.  By June 30th, over 850,000 men, 148,000 vehicles, and 570,000 tons of supplies had landed on the Normandy shores.  On May 7, 1945, German General Alfred Jodl signed an unconditional surrender at Reims, France.

Army troops on board a LCT, ready to ride across the English Channel to France. Some of these

We visited the beaches of Normandy a couple of years ago and the spiritual energy of those who gave their lives is still palpable

photos of the day

June 6, 2011

WWII veteran Arnold Whittaker of the 3rd Army, 5th Infantry Division, 10 Infantry Regiment company K, of Atlanta, Georgia, visits the US military cemetery in Colleville sur Mer, western France, on the 67th Anniversary of D Day, marking 67 years since Allied forces landed on a swath of beaches in Nazi-occupied France. The June, 6, 1944, invasion and ensuing battle for Normandy helped change the course of the war.

Vincent Michel/AP

Three-month-old female cheetah cubs live at the Nairobi Orphanage in Nairobi, Kenya. The two cubs were abandoned by their mother and were brought to the orphanage when they were one-month old.

Sayyid Azim/AP

Canada

By Matt Walcoff

     June 6 (Bloomberg) — Canadian stocks declined for a fifth day, erasing their 2011 gain, as energy stocks fell on lower crude-oil prices and financial companies dropped after the country reported a 21 percent plunge in building permits.

     Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.2 percent as crude dropped. Bank of Nova Scotia, the country’s third-biggest lender by assets, slipped 1.2 percent after Statistics Canada said building permits sank the most in five years in April. Sino-Forest Corp., the forestry company accused of manipulating financial data by a short seller, gained 16 percent after tumbling 71 percent in the previous two sessions.

     The Standard & Poor’s/TSX Composite Index decreased 199.25 points, or 1.5 percent, to 13,318.66. Twenty-four of 248 stocks advanced, the fewest since March 10.

     “There’s no doubt the economic news lately not only in the U.S. but in many other parts of the world has not been so good,” said Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, which oversees about C$600 million ($613 million). “Everybody’s a little bit nervous about what we’ll see in the next six months.”

     The S&P/TSX fell 2 percent last week, trimming its 2011 gain to 0.6 percent, as the U.S. unemployment rate climbed to the highest since December. The U.S. accounted for 75 percent of Canadian exports last year, according to Statistics Canada. The index’s five-day slide is the longest since Jan. 10.

     Trading of put options to sell the iShares MSCI Canada Index Fund climbed to a four-month high of 1,550 contracts today, 14 times the four-week average.

     Crude futures declined 1.2 percent to a two-week low in New York as traders speculated slower economic growth will limit demand.

     Suncor dropped 2.2 percent to C$38.75. Penn West Petroleum Ltd., a western Canadian oil and gas producer, lost 3.8 percent to C$23.87. Enbridge Inc., Canada’s largest pipeline company, slipped 2.1 percent to C$30.98.

     Oilfield-services company Trinidad Drilling Ltd. decreased 8.5 percent to C$8.74. Shares of the Calgary-based company have sunk 20 percent since May 31, when it reported first-quarter earnings that missed the average analyst estimate.

     The S&P/TSX Financials Index slumped to a four-month low after building permits fell more than all 13 economists in a Bloomberg survey had forecast. Scotiabank dropped 1.2 percent to C$57.77. Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 1.8 percent to C$80.21. Manulife Financial Corp., North America’s fourth-largest insurer, declined 1.7 percent to C$16.16.

     Sino-Forest, which operates in China, rose 16 percent, the most since 2008, to C$6.10 in Toronto Stock Exchange trading after publishing documents on its website that it says support its reported land ownership. On June 5, Carson Block, the founder of Hong Kong-based Muddy Waters Research, said the company’s disclosures of timber holdings do not match city records.

     Sino-Forest shares remain down 66 percent since June 1.

     Companies with operations in Peru retreated after Ollanta Humala claimed victory in the country’s presidential election.

Humala has called for greater state control over natural resources.

     Pan American Silver Corp. tumbled 4.9 percent to C$30.22.

Rio Alto Mining Ltd. slumped 14 percent, the most since January 2010, to C$2.05.

     Teck Resources Ltd., which owns an interest in a copper and zinc mine in Peru, fell 3.6 percent to C$47.71. Teck, Canada’s largest base-metals and coal producer, extended its losses after Claudia Onetto, a company spokeswoman, said heavy rains have forced the closure of a copper mine in Chile.

     The S&P/TSX Consumer Discretionary Index retreated to an eight-month low. Tim Hortons Inc., Canada’s largest fast-food chain, fell for a fifth day, the longest streak since October, dropping 2.6 percent to C$43.31.

     Directory publisher Yellow Media Inc. decreased 6 percent to a record-low C$3.59 after Aravinda Galappatthige, an analyst at Canaccord Financial Inc., said shares may fall further as revenue from print products slides.

US

By Rita Nazareth

     June 6 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index trading around the lowest valuation level this year, as a decline in financial stocks overshadowed gains in technology companies.

     Wells Fargo & Co., the largest U.S. home lender, slumped 2.1 percent after Rochdale Securities LLC’s Richard Bove cut his recommendation for the stock. Apple Inc. rose 0.7 percent as Chief Executive Officer Steve Jobs may announce in an annual developers conference today a new way to access digital songs and information on smartphones and computers. Freeport-McMoRan Copper & Gold Inc. added 0.7 percent as Goldman Sachs Group Inc. reiterated its “buy” recommendation for the largest publicly traded copper producer.

     The S&P 500 fell 0.1 percent to 1,298.48 at 9:33 a.m. today. The benchmark gauge for American equities is trading at about 12.4 times its companies’ estimated operating earnings, the cheapest valuation since September, according to data compiled by Bloomberg. The Dow Jones Industrial Average slid 6.81 points, or 0.1 percent, to 12,144.45 today.

     U.S. stocks fell for five straight weeks, the longest slump for the Dow since 2004, as slower-than-estimated growth in jobs fueled concern that earnings forecasts are too optimistic. Labor Department figures last week showed that payrolls grew at the slowest pace in eight months and the U.S. jobless rate unexpectedly climbed to 9.1 percent in May. A separate report showed that manufacturing expanded at the slowest pace in more than a year.

     Wells Fargo slumped 2.1 percent to $26.31. Rochdale’s Bove cut his recommendation to “sell” from “neutral,” citing poor economic environment, weak housing prices, slowing manufacturing indicators and negative regulatory environment.

     Apple added 0.7 percent to $345.74. CEO Jobs, on medical leave since Jan. 17, will make his second public appearance of 2011 at Apple’s conference in San Francisco. He will preview software updates for Apple’s iPhone, iPad and Mac, as well the new iCloud online storage service, which may help those devices wirelessly share the same materials.

     The five-week drop in U.S. stocks has driven technology company valuations to the lowest level in more than a decade, making them too cheap to pass up for some of the nation’s biggest money managers.                     

     The largest group in the benchmark gauge for American equities lost 7 percent, or about $190 billion in value, since the market peaked on Feb. 18, falling more than any industry outside financials. Computer stocks trade for 9.3 times reported earnings before interest, taxes, depreciation and amortization, 1.3 times the index’s multiple, data compiled by Bloomberg show.

The ratio is the smallest since at least 1998.

     While signs of a slowing recovery and the initial public offering of LinkedIn Corp. have spurred concern the industry has entered a speculative bubble, the numbers show something different. Profits will rise 35 percent faster than the Standard & Poor’s 500 Index in 2011, and executives are boosting computer and software spending, data from Bank of America Corp. and Bloomberg show.

     “We see the best supply-demand trend in technology,” said Michael Sansoterra, a money manager at RidgeWorth Capital Management in Atlanta, which oversees $48.5 billion including Broadcom Corp. and Google Inc. shares. “You can measure it pretty much every way you want and it looks attractive.”

     Freeport-McMoRan gained 0.7 percent to $50.30. Goldman Sachs reiterated its “buy” recommendation for the largest publicly traded copper producer, saying that the company should benefit from higher copper prices amid strong demand.

Have a wonderful day everyone.

Be magnificent!

Most parents unfortunately think they are responsible for their children and their sense of responsibility takes the form of telling them what they should do, what they should not do, what they should become and what they should not become.

The parents want their children to have a secure position in society.  What they call responsibility is part of that respectability they worship; and it seems to me that where there is respectability there is no order.

Do you call that care and love?

-Krishnamurti, 1895-1986

As ever,

Carolann

The truth does not change according

to our ability to stomach it.

    -Flannery O’Connor, 1925-1964 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Will this be your year?

The roster for the 2011 Atlantic hurricane season, released by the U.S. National Hurricane Center, is:  Arlene, Bret, Cindy, Don, Emily, Franklin, Gert, Harvey, Irene, Jose, Katia, Lee, Maria, Sean, Tammy, Vince and Whitney.

                                                                           -from TheGlobe & Mail, 6/3/11

 photos of the day

June 3, 2011

The Popocatepetl volcano spews a cloud of ash and steam high into the air as seen from Puebla, 62 miles east of Mexico City.

Reuters

Rafael Nadal of Spain reacts after winning his semi-final match against Andy Murray of Britain at the French Open tennis tournament at the Roland Garros stadium in Paris.

Benoit Tessier/Reuters

Market Commentary:

Canada

By Matt Walcoff

     June 3 (Bloomberg) — Canadian stocks fell for a fourth day, extending a weekly decline, as Sino-Forest Corp. tumbled after a short seller accused the company of falsifying its financial data.

     Sino-Forest, a forestry company with operations in China, sank 64 percent after Carson C. Block of Muddy Waters LLC said the company overstated timberland holdings and production, an allegation it denied. BlackBerry maker Research In Motion Ltd. fell 3.4 percent after analysts at UBS AG cut their share-price estimate. Caterpillar dealer Toromont Industries Ltd. rose 7.1 percent after spinning off its Enerflex Ltd. unit.

     The Standard & Poor’s/TSX Composite Index slipped 1.59 points, or less than 0.1 percent, to 13,517.91.

     “Where there’s smoke, there’s fire,” Murray Leith, who helps oversee about C$7.5 billion ($7.7 billion) at Odlum Brown Ltd. in Vancouver, said of Sino-Forest’s slide. Leith said he has no first-hand knowledge of the company’s finances. “The market is telling you there’s some substance to the accusations, and people are heading for the hills.”

     For the week, the index fell 2 percent as reports indicated slowing U.S. employment and manufacturing growth. The S&P/TSX Financials Index dropped 2 percent, the most since November.

Canadian Prime Minister Stephen Harper outlined a program today for his freshly seated parliamentary majority to rein in spending, diversify trade and attract more foreign capital to protect the country from a faltering U.S. recovery.

     “Because 75 percent of our trade goes to the U.S., if the U.S. consumer is not buying stuff, we’re toast,” said Paul Ma, who manages about C$500 million as a money manager at McLean & Partners in Calgary.

     Sino Forest tumbled a record 64 percent to C$5.23 after falling 21 percent yesterday. In a statement today, the company called Block’s allegations “inaccurate and unfounded” and said it will establish a committee of independent directors to examine them.

     Other companies with links to China also dropped. Precious- metals producer China Gold International Resources Corp. declined 4.5 percent to C$4.27, the lowest since September. Neo Material Technologies Inc., which makes rare-earths and zirconium products in China, Thailand and North America, plunged 9.4 percent to C$8.60.

     RIM lost 3.4 percent to a four-year low of C$38.15 after Amitabh Passi and Phillip Huang, analysts at UBS, cut their price estimate on its U.S.-traded shares to $45 from $60.

     In a note to clients, the analysts cited a lack of clarity about when new phones would debut, inroads made by Apple Inc.’s iPhone and devices based on Google Inc.’s Android software in corporations, and an overconcentration of responsibility with co-chief executive officers Mike Lazaridis and Jim Balsillie.

     Also today, ComScore Inc. said RIM fell to third place in share of the U.S. smartphone market behind Apple. Android devices are the most-used in the U.S., the market-research firm said.

     Energy and financial stocks rose after the Institute for Supply Management’s index of U.S. non-manufacturing businesses increased more than most economists in a Bloomberg survey had forecast.

     Toronto-Dominion Bank, Canada’s second-largest lender by assets, gained 1.2 percent to C$81.69. Suncor Energy Inc., the country’s biggest oil and gas producer, advanced 1.2 percent to C$39.60. Cenovus Energy Inc., Canada’s fifth-largest energy company, increased 2.4 percent to C$34.96.                      

     Laurentian Bank of Canada, the country’s seventh-largest lender by assets, slumped 5.4 percent, the most in two years, to C$46.88 after retreating 4.1 percent yesterday. The bank reported second-quarter earnings that missed the average analyst estimate by 4.8 percent, excluding certain items, yesterday.

     Sumit Malhotra, an analyst at Macquarie Group Inc., and Kevin R. Choquette, an analyst at Bank of Nova Scotia, cut their ratings on the shares today.

     Toromont Industries Ltd. jumped 7.1 percent, the most since 2008, to C$20.21 after spinning off Enerflex, which makes products for energy producers. Enerflex climbed 5.4 percent from its opening price today to C$12.65.

US

By Rita Nazareth

     June 3 (Bloomberg) — U.S. stocks extended a fifth straight weekly drop, the longest slump for the Dow Jones Industrial Average since 2004, as slower-than-estimated growth in jobs fueled concern that earnings forecasts are too optimistic.

     Alcoa Inc. and DuPont Co. each retreated 1.7 percent, pacing losses among companies most-tied to economic growth. The Dow Jones Transportation Average, which is considered a proxy for the economy, declined 1.7 percent. Monster Worldwide Inc., the largest online-recruiting company, tumbled 5.7 percent after payrolls grew at the slowest pace in eight months and the U.S. jobless rate unexpectedly climbed to 9.1 percent in May.

     The Standard & Poor’s 500 Index retreated 1 percent to 1,300.16 at 4 p.m. in New York, the lowest since March 23. The benchmark gauge for American equities had its longest weekly slump since July 2008, falling 4.7 percent since April 29. The Dow fell 97.29 points, or 0.8 percent, to 12,151.26 today.

     “It’s a highly worrisome jobs report that should jolt policy makers into realizing the U.S. faces an employment crisis,” said Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., which runs the world’s biggest bond fund. “The details indicate that the stimulus- driven cyclical recovery has done little to overcome what is an increasingly structural unemployment problem. The economy is in a soft patch that places pressures on equity prices.”

     The S&P 500 slumped 3.4 percent over the last three days also as a report showed weaker-than-forecast employment growth in ADP Employer Services’ and as manufacturing expanded at the slowest pace in more than a year. Still, the index is up 3.4 percent this year amid government stimulus measures and higher- than-estimated corporate earnings.

     Employers added a less-than-projected 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier.

     “The jobs report is the last nail in the coffin,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., which oversees $3.65 trillion as the world’s largest asset manager.

“It confirms that the economy is dramatically slowing. It tells me that the Fed will be in no rush to tighten monetary policy.

This to me is a rational correction in stocks. You probably need to see some moderation in earnings estimates.”

     Michael Shaoul, whose Marketfield Fund Ltd. beat 81 percent of competitors last year with investments in transportation and retail companies, said private-sector hiring has risen by an average 145,000 a month over the last year, faster than economists had predicted. He noted that smaller gains in nonfarm payrolls reported in February and July 2004 failed to derail the last bull market, which peaked in October 2007.

     “What the data will do, however, is accelerate the process of economic revision, with estimates of U.S. growth being forced significantly lower across the board,” Shaoul wrote in a note to clients. “As damaging as the process may be for asset values, it has surprisingly little to do with the actual ability of corporations to generate revenue.”

     UBS AG strategists led by Chief Economist Larry Hatheway reduced their stance on global equities to “underweight,”saying the worldwide economy “is clearly enduring a soft patch.”

     Data on the economy is trailing forecasts by the widest margin since the bull market began in March 2009, according to the Citigroup Economic Surprise Index for the U.S. At the same time, stock analysts have been boosting forecasts for S&P 500 profit growth. Companies in the index are forecast to earn $105.31 a share over the next 12 months, compared with $96.92 at the beginning of January, data compiled by Bloomberg show.

     Based on those estimates, the S&P 500 is trading at a price-earnings ratio of 12.3, compared with an average forward multiple of 14.7 since 2006, the data show. Profit forecasts have beaten analyst estimates for nine straight quarters. The index is priced at 1.3 times reported sales, down from a 32- month high of 1.4 in February, and 2.2 times book value, according to data compiled by Bloomberg.

     “The only saving grace for the stock market in that environment is that P/E multiples are not very challenging relative to history,” said Jim McDonald, chief investment strategist at Northern Trust Corp. in Chicago, which manages $662 billion. Stocks are not expensive. That’s something that helps mitigate the downside.’’

     Companies most-tied to economic growth slumped. The Morgan Stanley Cyclical Index fell 1.6 percent as 28 of its 30 stocks retreated. Alcoa dropped 1.7 percent to $15.92. DuPont declined 1.7 percent to $50.29. FedEx Corp. slumped 1.5 percent to $90.15.

     Monster Worldwide, the largest online-recruiting company, tumbled 5.7 percent to $13.58, the lowest level since October.

The stock also had the third-biggest decline in the S&P 500.

     Newell Rubbermaid Inc. tumbled 12 percent to $14.97. The maker of Rubbermaid containers cut its profit forecast amid slower consumer spending. More than two-third of Newell’s sales come from the U.S., where persistent joblessness and surging prices for food and gas have forced shoppers to watch their wallets.

     The benchmark index for U.S. stock options and the S&P 500 fell, breaking their pattern of moving in opposite directions, as lower-than-estimated job growth failed to spur traders to pay more for insurance against equity losses. The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell 0.8 percent to 17.95. The index measures the cost of using options as protection against declines in the S&P 500.

Have a wonderful weekend everyone.

Be magnificent!

If this individuality is wiped away, the creative joy that crystallized it disappears, even if no material was lost, even if no atom was destroyed.

And if it is lost, it is also a loss for the entire world.  It is particularly precious because it is not universal.

-Rabindranath Tagore,1861-1901

As ever,

Carolann

Train yourself to let go of the things

you fear to lose.

                     -George Lucas, 1944-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor