Month: June 2011

Dear Friends,

ANNIVERSARY today: June 2, 1953 The Coronation of Queen Elizabeth II.  Louis St. Laurent attended and footage was flown across the Atlantic by RAF jets so that Canadians could see it the same day.  A lot has changed in the world of communication in the intervening 58 years.

In his diary, A Mingled Measure, James Lees-Milne describes the coronation:

The weather was damnable.  It rained all day.  The moment the procession started it positively poured, and the troops were soaked.  Yet the procession was magnificent.  The colour and pageantry cannot be described.  Uniforms superb and resplendent.  The most popular figure Queen Salote of Tonga, a vast, brown, smiling bundle with a tall red knitting needle in her hat:  knitting needle having begun as a plume of feathers.  Despite the rain she refused to have the hood of her open carriage drawn, and people were delighted.  They roared applause.  Extraordinary how the public will take someone to its bosom, especially someone not very exalted who is putting up a good show.  All along the route they adored her.  Beside her squatted a little man in black and a top hat – her husband.  Noël Coward, when asked who he was, said, ‘Her dinner.’

56

photos of the day

June 2, 2011

A trader works on the floor at the New York Stock Exchange in New York.

Seth Wenig/AP

A visitor poses with artist James Hugonin’s ‘Binary Rhythm (I)’ at the press view of the Summer Exhibition 2011 at the Royal Academy of Arts in London.

Luke MacGregor /Reuters

Market Commentary:

Canada

By Matt Walcoff

     June 2 (Bloomberg) — Canadian stocks fell for a third day, led by raw-materials producers, as gold and silver dropped after the euro gained, eroding demand for precious metals as a haven.

     Barrick Gold Corp., the world’s largest producer of the metal, declined 2.2 percent as gold lost 0.7 percent. Sino- Forest Corp., a forestry company with operations in China, plunged 21 percent after a short seller said it overstated timberland holdings and production. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, rose 1.5 percent as corn and wheat gained.

     The Standard & Poor’s/TSX Composite Index slipped 8.38 points, or 0.1 percent, to 13,519.50.

     “People have been going to gold not for investment purposes but more as a currency,” said Robert “Hap” Sneddon, president of Oakville, Ontario, money manager CastleMoore Inc. and vice president of the Canadian Society of Technical Analysts. “You get the euro strengthening a little bit, and it’s probably going to come at the expense of gold.”

     The S&P/TSX slumped 2 percent yesterday, the most since August, after private reports indicated slowing employment and manufacturing growth in the U.S. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

     An index of S&P/TSX gold stocks fell the most in three weeks as demand for a safe haven weakened. The metal advanced 8.6 percent this year through yesterday as investors speculated European countries will have difficulty managing their debt crisis.                      

     Barrick dropped 2.2 percent to C$45.06. Goldcorp Inc., the world’s second-largest gold producer by market value, declined 1.2 percent to C$47.58. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, lost 2.1 percent to C$34.36 as silver sank 4 percent.

     Sino-Forest tumbled 21 percent, the most since 1995, to C$14.46 before being halted. Carson C. Block, a Hong Kong-based analyst who has bet against Sino-Forest shares, said in a report that the amount of land the company reported buying from Lincang City in Yunnan province doesn’t match city records.

     Dave Horsley, chief financial officer at Sino-Forest, didn’t immediately return calls to his mobile phone and the company’s Mississauga, Ontario office. No one immediately replied to voicemail messages left at Sino-Forest’s Hong Kong and Mississauga offices.                      

     Fertilizer producers climbed as wheat futures rose on speculation Russian exports won’t be enough to help meet higher global demand and corn gained. Potash Corp. increased 1.5 percent to C$54.19. Agrium Inc., Canada’s second-largset fertilizer producer, advanced 1.8 percent to C$84.81.

     Oilfield-services company Trinidad Drilling Ltd. plunged 5.3 percent to C$9.74 a day after sinking 6 percent. Yesterday, the company reported earnings that missed the average analyst estimate by 7.2 percent, excluding certain items. At least three analysts cut their ratings on the shares today.

     Transat A.T. Inc., the owner of airline Air Transat, slumped 7.9 percent to C$11.78 after Claude Proulx, an analyst at Bank of Montreal, reduced his rating on the shares to “market perform” from “outperform.” In a note to clients, Proulx wrote that second-quarter earnings may decline in the second half of the fiscal year due to excess capacity and competition from Air Canada.

     Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, rallied 4.1 percent to C$51.29 as company executives met with potential investors in New York.

US

By Rita Nazareth

     June 2 (Bloomberg) — U.S. stocks retreated, a day after the biggest slump for the Standard & Poor’s 500 Index since August, as investors awaited the Labor Department’s monthly report on employment in the world’s largest economy.

     Limited Brands Inc. and Gap Inc. paced losses among chain stores, falling at least 2.1 percent. Goldman Sachs Group Inc. retreated 1.3 percent after two people familiar with the matter said it received a subpoena from the Manhattan District Attorney regarding the bank’s activity leading into the credit crisis.

Joy Global Inc. gained 5.4 percent, spurring a rally in industrial companies, after the mining-equipment maker reported profit that beat analysts’ estimates.

     The S&P 500 fell 0.1 percent to 1,312.94 at 4 p.m. in New York. It slumped 2.3 percent yesterday, the most since August, after data showing slower-than-forecast job growth spurred concern that tomorrow’s Labor Department report will trail estimates. The Dow Jones Industrial Average dropped 41.59 points, or 0.3 percent, to 12,248.55 today.

     “Nobody is going to jump in with strong conviction before the jobs report,” said Peter Jankovskis, who helps manage about $2.7 billion at Oakbrook Investments in Lisle, Illinois. “We’ve been experiencing fairly weak economic figures. Investors need more evidence that this is a temporary slowdown.”

     The S&P 500 tumbled to a six-week low yesterday following ADP Employer Services’ jobs report and separate data from the Institute for Supply Management that showed manufacturing expanded at the slowest pace in more than a year. Citigroup Inc.’s U.S. Economic Surprise Index, which tracks the rate at which data are beating or missing estimates, turned negative in May and has since fallen to the lowest level since January 2009.                       

     Stocks fell today as data showed the economic recovery is slowing. Orders placed with U.S. factories fell in April by the most in nearly a year as demand for aircraft waned and Japan’s earthquake restrained auto-related supplies. A separate report showed that more Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs.

     “There are so many worries that hit the screen that investors don’t know where to focus on first,” said Bruce McCain, who oversees $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “There’s sluggish growth, the European crisis, fiscal issues, high commodity prices. It’s not like we’ll suddenly go over the edge and into an abyss. Still, those are uncertain times. That is reflected in global markets.”

     Moody’s Investors Service said that if there is no progress on increasing the statutory debt limit in coming weeks, it expects to place the U.S. government’s rating under review for possible downgrade, due to the very small but rising risk of a short-lived default. Moody’s said if the debt limit is raised and default avoided, the Aaa rating will be maintained. Lack of an agreement could prompt Moody’s to change its outlook to negative on the Aaa rating.

     Limited Brands, Gap and other U.S. retailers reported May sales that trailed analysts’ projections as increasing prices and surging gasoline costs deterred budget-conscious shoppers.

Limited, operator of the Victoria’s Secret chain, posted a gain of 6 percent in same-store sales, missing the 7.4 percent average of analysts’ estimates compiled by Retail Metrics Inc.

Sales at Gap, the largest U.S. apparel chain, fell 4 percent, more than five times the rate analysts projected.

     Surging costs for cotton, oil and labor in Asia have forced some apparel chains to pass costs on to consumers, with several saying hikes will accelerate this year. Some shoppers are scrimping on trips to stores because they can’t keep up with the price of fuel.

     Limited Brands slumped 2.2 percent to $37.87. Gap dropped 4.1 percent to $18.12.

     Goldman Sachs Group Inc. slid 1.3 percent to $134.38. The fifth-biggest U.S. bank by assets received a subpoena from the Manhattan District Attorney’s office seeking information related to a Senate subcommittee report on Wall Street’s role in the housing market collapse, according to two people familiar with the matter.

     Joy Global gained 5.4 percent to $90.51. The mining- equipment maker reported second-quarter profit of $1.52 a share.

Analysts surveyed by Bloomberg had estimated earnings of $1.35 a share on average.

     For-profit colleges rallied as the U.S. Education Department gave the industry more time to comply with rules that will cut off federal aid to institutions whose students struggle the most to repay their government loans.

     Corinthian Colleges Inc. gained 27 percent to $5.06. Apollo Group Inc. advanced 11 percent to $46.90.

     More than $578 billion has been erased from U.S. equity markets since the S&P 500 peaked at 1,363.61 on April 29, pushing the index’s valuation to 13.3 times estimated profit for 2011 from 13.8 times. The drop is creating a buying opportunity for investors willing to withstand declines that may reach 10 percent, according to Blackstone Group LP’s Byron Wien. Wien, who estimates earnings for companies in the gauge will climb about 12 percent in 2011, says shares will prove a bargain and the index will rally.

     “Investors should be looking for buying opportunities,” said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world’s largest private-equity firm. “The economy is not as bad as it looks right now. Corporate profits will be good, very good.

People are asking me, ‘Do you still think the market can get to 1,500 by the end of the year?’ I do.”

Have a wonderful evening everyone.

Be magnificent!

Man lives in confusion and fear until he discovers the uniformity of the law in nature; until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason, which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Life is not always a matter of holding

good cards, but sometimes of playing

a poor hand well.

     -Robert Louis Stevenson, 1850-1894

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

It’s The Glorious First of June:  So named because on June 1, 1794, the Channel Fleet under Lord Howe gained a decisive victory over the French under Admiral Villaret de Joyeuse.  Off Ushant, six  French ships were captured and one sunk, but the convoy of corn ships, which they were escorting, got through Brest.

June is probably named after the Roman gens or clan name Junius, related to juvenis, meaning young.  However, some sources take the name from Juno.  In Roman mythology, Juno is the “venerable ox-eyed” wife and sister of Jupiter, and Queen of Heaven.  She is identified with the Greek Hera, who was the special protectress of marriage and of women and was represented as a war-goddess.

photos of the day

June 1, 2011

In this late Tuesday, May 31, 2011 photo, opera singers walk to the stage for a rehearsal of Verdi’s opera, ‘Aida’ near by the historical site at Masada, Israel.

Oded Balilty/AP

Space Shuttle Endeavour (STS-134) makes its final landing at the Shuttle Landing Facility (SLF) at Kennedy Space Center in Cape Canaveral, Florida. Endeavour touched down at its Florida home base capping a 16-day mission to deliver a premier science experiment to the International Space Station on NASA’s next-to-last shuttle flight.

Bill Ingalls/NASA

Market Commentary:

Canada

By Matt Walcoff

     June 1 (Bloomberg) — Canadian stocks fell the most in nine months, led by financial and energy companies, after private reports showed growth in U.S. employment and manufacturing slowed last month.

     Canadian Imperial Bank of Commerce, the country’s fifth- largest lender by assets, dropped 3.5 percent after an analyst at Royal Bank of Canada cut his rating on the shares. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 4 percent as oil futures retreated. BlackBerry maker Research In Motion Ltd. declined 5.1 percent after UBS AG named it a “least-preferred” stock.

     The Standard & Poor’s/TSX Composite Index decreased 275 points, or 2 percent, to 13,527.88 after the Institute for Supply Management’s index of U.S. manufacturing dropped to its lowest level since September 2009. The May figure trailed 82 of 83 economists’ forecasts in a Bloomberg survey.

     “This is a further confirmation of a slowing down of the economy,” said Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, which oversees C$1.6 billion ($1.6 billion). “The statistics are coming down below estimates, therefore the market reacts negatively.”

     The index yesterday completed its third-straight monthly loss, the longest streak since February 2009. Indexes of S&P/TSX energy and materials stocks slumped 4.5 percent and 5.9 percent, respectively, in May as crude futures sank 9.9 percent and silver plunged 21 percent while the U.S. dollar climbed for the first time since November. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

     ADP Employer Services said today that U.S. employers added 38,000 jobs last month, missing the median estimate 175,000 in a Bloomberg survey of economists.

     Also today, Moody’s Investors Service cut its credit rating on Greek bonds to Caa1 from B1, and JPMorgan Chase & Co. reduced its forecast for U.S. second-quarter economic growth to an annualized rate of 2 percent from 2.5 percent.

     An index of S&P/TSX financial stocks declined the most since August. Toronto-Dominion Bank, Canada’s second-largest lender by assets, fell 3.2 percent, the most in a year, to C$80.81. Royal Bank, its bigger rival, decreased 2.9 percent to C$54.98. Manulife Financial Corp., North America’s fourth- largest insurer, slid 4.8 percent to C$16.44.

     CIBC retreated 3.5 percent to C$77.54 after Andre-Philippe Hardy, an analyst at Royal Bank, cut his rating to “sector perform” from “outperform.” The lender has the most to lose among Canadian banks from a slowdown in domestic consumer lending, Hardy wrote in a note to clients.

     The S&P/TSX Energy Index fell for the first time in six days as crude oil dropped the most in three weeks and natural gas futures declined.                        

     Encana Corp., Canada’s largest nautral gas producer, lost 2.6 percent to C$32.15. Cenovus Energy Inc., the country’s fifth-biggest energy company, declined for the first time in eight days, decreasing 4.4 percent to C$34.21. Canadian Natural retreated 4 percent to C$40.48.

     Corridor Resources Inc., which explores for oil and gas in eastern Canada, plunged 25 percent to an 18-month low of C$3.18 after saying Apache Corp. has pulled out of a shale-gas joint venture in New Brunswick.

     Oilfield services company Trinidad Drilling Ltd. fell 6 percent, the most in nine months, to C$10.29 after reporting profit and sales that missed analyst estimates.

     Base-metal and coal producers dropped as copper declined.

Teck Resources Ltd., Canada’s largest company in the industry, lost 3.7 percent to C$48.94. Northern Dynasty Minerals Ltd., Anglo American Plc’s partner in the Pebble project in Alaska, decreased 5.9 percent to C$11.55.

     Reitmans (Canada) Ltd., which owns the country’s biggest chain of women’s clothing stores, tumbled 7.2 percent, the most in 25 months, to C$16.47 after reporting first-quarter profit of 1 Canadian cent a share, excluding certain items. Two analysts had estimated earnings of 23 Canadian cents a share and 24 Canadian cents a share, respectively.

     RIM, Canada’s largest technology company, slumped 5.1 percent to C$39.23 after closing at a four-year low yesterday.

In a note to clients, Amitabh Passi, an analyst at UBS, said increasing competition in the smartphone market may reduce profit margins.

     Intact Financial Corp., Canada’s biggest property and casualty insurer, soared 9.7 percent to more than a four-year high of C$54.62 after agreeing to buy Axa SA’s Canadian unit for

C$2.6 billion. The purchase will increase Intact’s premiums by C$2 billion to more than C$6.5 billion, the company said in a statement.

     Sino-Forest Corp., a forestry company with operations in China, dropped 5.5 percent to C$18.21 after a purchasing managers’ index for the country showed manufacturing grew at the slowest pace in nine months in May.

US

By Stephen Kirkland and Rita Nazareth

     June 1 (Bloomberg) — Stocks sank, dragging the Standard & Poor’s 500 Index to its worst loss since August, and Treasuries rallied as slower growth in jobs and manufacturing fueled concern the economy is faltering. The Dollar Index erased losses, and commodities fell.

     The S&P 500 plunged 2.3 percent, the Stoxx Europe 600 Index slid 1 percent and Brazil’s Bovespa retreated 1.9 percent as of 4:15 p.m. in New York. Ten-year Treasury note yields dropped below 3 percent for the first time since December and the Dollar Index rose 0.3 percent after sinking 0.4 percent earlier. The Swiss franc snapped a two-day drop against the euro. The S&P GSCI Index of commodities tumbled 1.5 percent.

     U.S. equities halted their longest streak of gains in a month after companies added 38,000 workers to payrolls in May, according to figures from ADP Employer Services, less than one- quarter of the median growth forecast by economists. Stocks extended losses after the Institute for Supply Management’s factory index showed U.S. manufacturing expanded at the slowest pace since September 2009.

     “It’s going to be pretty rocky,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “The bond market is in full-on pessimistic mode. We still think that this ultimately will be only a soft spot. The question is how long? It will be risk-off until this soft spot is confirmed.”

     Financial firms, industrial companies and raw-material producers fell at least 3 percent to lead declines in all 10 industry groups in the S&P 500. Caterpillar Inc., Alcoa Inc. and Bank of America Corp. fell 4.3 percent or more for the biggest losses in the Dow Jones Industrial Average. The Russell 2000 Index of small U.S. companies slumped 3.2 percent, the most since August, while the Dow Jones Transportation Average retreated 3.4 percent.

     The ISM’s factory index fell to 53.5 in May from 60.4 the prior month. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey.

Estimates of the 83 economists polled ranged from 53 to 60.

     The S&P 500 has fallen 3.6 percent from an almost three- year high at the end of April, and Treasuries have rallied, as economic data trailed economists’ estimates and investors prepared for the Federal Reserve to complete its $600 billion bond-purchase program by the end of this month. Citigroup Inc.’s U.S. Economic Surprise Index, which tracks the rate at which data is beating or missing estimates, turned negative in May and has since fallen to the lowest level since January 2009.

     Labor Department data on June 3 will probably show a projected 180,000 gain in payrolls following a 244,000 April increase, according to a Bloomberg survey.

     The recent lower-than-forecast economic data has caused some investors to speculate that the Fed will plan a third round of so-called quantitative easing after its latest program of bond purchases, known on Wall Street as “QE2,” is completed this month.

     “We do not want to see QE3,” Brian Belski, Oppenheimer & Co.’s New York-based chief investment strategist, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “QE3 is a short-term event, which will cause the market to go higher because investors over the last 10 years have become so reliant on cheap money and low interest rates. We think that only prolongs the inevitable when the Fed has to eventually sell these securities that they have been buying.”

     The dollar beat stocks, bonds and commodities for the best performance in May. The Dollar Index climbed 2.3 percent in the month, while the MSCI All-Country World Index of equities fell 2.5 percent, the S&P GSCI Index of commodities sank almost 7 percent in the month and bonds of all types returned 1.1 percent on average.

     Crude oil slid 2.4 percent, the most in three weeks, to $100.29 a barrel in New York. All but four of the 24 commodities tracked by the S&P GSCI Index retreated. Silver, coffee, sugar and wheat lost at least 2.9 percent for the biggest declines.

     The Stoxx 600 retreated for the second day this week. Banca Monte dei Paschi SpA sank 7.6 percent, as the Italian lender’s controlling shareholder sold 450 million shares on behalf of Fondazione Monte dei Paschi di Siena, a term sheet for the deal showed.

     The difference in yield between Greek 10-year bonds and benchmark German bunds increased 15 basis points to 13.17 percent. Greece’s next aid package may include incentives for bondholders to keep lending without triggering a downgrade that would roil Europe’s banking system, two people with knowledge of the talks said. So-called negative incentives are also under consideration, such as cutting off old Greek bonds from eligibility for use as collateral with the European Central Bank, the people said.

     The franc strengthened against all 16 of its major counterparts, gaining 1.7 percent versus the euro, after retail sales rose in April at the fastest rate for two years, boosting speculation the Swiss National Bank will increase borrowing costs. Britain’s pound weakened against 10 of its 16 major peers after a manufacturing index fell to a 20-month low and U.K. mortgage approvals dropped to the least in four months.

     The MSCI Emerging Markets Index fell 0.3 percent, breaking a four-day winning streak. Taiwan’s Taiex Index climbed 0.6 percent. The Bombay Stock Exchange Sensitive Index rose 0.6 percent after Morgan Stanley predicted it will rebound 19 percent this year. Thailand’s SET Index slid 0.8 percent before the central bank raised its benchmark one-day bond repurchase rate for the fourth time this year.

Have a wonderful evening everyone.

Be magnificent!

The main purpose of life is to live rightly, think rightly, act rightly.

The soul must languish when we give all our thought to the body.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

LAST WORDS:

I wish I had drunk more champagne.

        -John Maynard Keynes, 1883-1946              

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

Dear Friends, 

BIRTHDAY: Walt Whitman, May 31

Walt Whitman, age 37, frontispiece to Leaves of Grass, Fulton St., Brooklyn, N.Y., steel engraving by Samuel Hollyer from a lost daguerreotype by Gabriel Harrison.

SONG OF MYSELF

I celebrate myself, and sing myself,

And what I assume you shall assume,

For every atom belonging to me as good belongs to you.

I loafe and invite my soul.

I lean and loafe at my ease observing a spear of summer grass…

                      -Walt Whitman from Song of Myself in Leaves of Grass

June 1^st tomorrow so summer is not far away.

A new Facebook app is coming out that will remind users exactly what they were doing a year ago from that day. Nine times out of 10, the answer will be: “Wasting your time on Facebook.”

                                                                                                     – Conan O’Brien

photos of the day

May 31, 2011

Cows graze as dark clouds appear over a chapel near Murnau, southern Germany, on Tuesday.

Matthias Schrader/AP

A guide looks in from the entrance of a hall for a Louis Vuitton Voyages exhibition at the National Museum of China in Beijing. Luxury goods makers may boast familiarity with China, but the pace of change in the world’s fastest-growing country still startles them. The world’s biggest luxury market within five years has become a second home for brands that tap Chinese appetite for fast super sports cars, 10,000-euro ($14,060) handbags and diamonds.

Jason Lee/Reuters

A Great Pied Hornbill chick, about 40 days old, is displayed at the Jurong Bird Park on Tuesday in Singapore. This is one of two chicks hatched successfully through artificial incubation and are notoriously difficult species to breed in captivity. Artificial incubation was necessary as the breeding pair of Great Pied Hornbills had cannibalized the chicks the previous year.

Wong Maye-E/AP

Canada

By Inyoung Hwang

     May 31 (Bloomberg) — Canadian stocks fell, completing a third-straight monthly decline, as Research in Motion Ltd. sank to its lowest price in more than four years and an index of U.S. consumer confidence dropped unexpectedly to a six-month low.

     Research in Motion Ltd., maker of the BlackBerry smartphone, erased 4.4 percent after rival Nokia Oyj cut sales forecasts. Royal Bank of Canada lost 0.8 percent as Keefe, Bruyette & Woods Inc. lowered its earnings estimate. Goldcorp Inc., the second-biggest producer of the metal, declined 1.2 percent as gold futures retreated.

     The Standard & Poor’s/TSX Composite Index dropped 26.78 points, or 0.2 percent, to 13,802.88 at 4 p.m. in Toronto, after rising as much as 0.5 percent earlier. Global stocks rallied today amid speculation European officials will pledge additional aid for Greece by the end of June.

     “The market was happy about the news overnight that there was some optimism on the European debt crisis, but then we got hit with some bad economic news out of the U.S.,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which oversees C$1.7 billion ($1.8 billion). “The biggest news was the consumer confidence number, which was lower than before. The main challenge there is there are more and more people saying jobs are harder to come by.”

     The S&P/TSX fell 1 percent this month, its first three- month series of declines since February 2009.

Telecommunications, consumer-staple and utility stocks have led gains in the past month, while materials stocks were the one of worst performing groups out of 10 in the gauge as prices of raw materials such as oil, gold and silver slumped.                       

     Confidence among U.S. consumers declined in May as Americans’ outlook for business conditions and the labor market soured. The Conference Board’s index dropped to 60.8 from a revised 66 reading in April, figures from the New York-based private research group showed today.

     The median forecast of economists surveyed by Bloomberg News called for a rise to 66.6. Other data today showed a drop in home prices and weakening manufacturing.

     Research in Motion fell 4.4 percent to C$41.35, the lowest price since October 2006. Nokia Oyj cut its forecasts for its devices and services unit on lower prices and competition from Google Inc. and Apple Inc. Nokia said second-quarter sales at the devices and services division will be “substantially” less than its projected range, raising concern Research in Motion is also losing market share.                        

     “When you have a major cellphone maker cutting forecasts, that’s not good for RIM either,” Xu said. “It’s pretty clear that Apple has taken the high-end market and it’s really hard to challenge that, so the low-end market is going to be an ugly dog fight.”

     The Washington Post reported yesterday that the federal government is allowing more of its workers to use products by Apple Inc. such as the iPhone and iPad instead of the BlackBerry and laptops. The Waterloo, Ontario-based company has plunged 23 percent since April 28 when it cut its profit forecasts on lower-than-expected demand for its smartphones.

     Royal Bank of Canada, the country’s biggest lender, slumped 0.8 percent to C$56.62 after KBW analyst Brian Klock lowered his profit forecast, citing volatility in the Fixed Income Clearing Corp. business. Klock rates Royal Bank of Canada “market- perform.”

     Goldcorp fell 1.2 percent to C$48.46 as gold slipped 50 cents to $1,536.80 an ounce in New York. Barrick Gold Corp., the biggest producer, fell 0.1 percent to C$46.39, its first decline in nine days.

     North American Palladium Ltd. rallied 8.7 percent to C$4.02, the most since April 20. The precious-metals producer with operations in Ontario received a “sector outperform” rating from Leily Omoumi, an analyst at Scotiabank.

US

By Rita Nazareth

     May 31 (Bloomberg) — U.S. stocks advanced, trimming the biggest monthly drop since August for the Standard & Poor’s 500 Index, amid speculation about additional aid for Greece.

     Apple Inc. rallied 3.1 percent after saying Chief Executive Officer Steve Jobs will introduce a cloud-computing product and new software next week. Intel Corp. gained 1.4 percent as the world’s largest chipmaker seeks to challenge tablet makers with a new type of thinner laptop called an “ultrabook.” General Dynamics Corp. climbed 4.2 percent after receiving a $744 million contract from the U.S. Navy.

     The S&P 500 rose 1.1 percent to 1,345.20 at 4 p.m. in New York, for its fourth consecutive day of gains. The index declined 1.4 percent in May. The Dow Jones Industrial Average added 128.21 points, or 1 percent, to 12,569.79 today. Equities advanced even as data on consumer confidence and business activity trailed economists’ estimates.

     “There’s a roadmap to getting Greece through its crisis,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “That’s why investors are reacting positively. In the U.S., we got some softening in economic data. That doesn’t tell me we’re going to have a QE3.

It tells me that monetary policy is going to be easy for a while. That should provide room for stocks to move higher.”

     The benchmark gauge fell from an almost three-year high on April 29 on concern about Europe’s debt crisis. Still, the gauge rose 7 percent this year amid higher-than-forecast corporate profits and government stimulus measures. The Federal Reserve plans to complete its second round of asset purchases, known as quantitative easing, or QE2, in June, while holding interest rates “exceptionally low” for an “extended period.”         

     Benchmark indexes had a four-week drop, the longest losing streak in more than 15 months. Over the last 100 years, the Dow has returned an average 0.4 percent gain in June, according to data compiled by Bespoke Investment Group. The gauge has fallen 0.6 percent and 1.2 percent in June, respectively, over the last 50 years and 20 years, the data showed.

     Global stocks rallied as Jean-Claude Juncker, head of the group of euro-area finance ministers, said European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of its debt.

     Stocks gained even after the Institute for Supply Management-Chicago Inc. said its business barometer fell to 56.6 this month from 67.6 in April. Figures greater than 50 signal expansion. Economists forecast the gauge would fall to 62, according to the median estimate in a Bloomberg News survey.

     Confidence among U.S. consumers unexpectedly declined in May to a six-month low as Americans’ outlook for business conditions and the labor market soured. Another report showed that home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

     “Economic data has been patchy,” Mike Ryan, the New York- based chief investment strategist for Wealth Management Americas at UBS Financial Services Inc., wrote in a note today. “The apparently much more mixed picture represents mostly a transitory headwind. It remains our view that equity markets will outperform over the balance of the year given a still solid earnings outlook, undemanding valuations and continued accommodative policy conditions.”

     The longest stretch of declines on a weekly basis for the S&P 500 in a year has left valuations at the lowest level ever compared with speculative-grade debt.

     Earnings from the past 12 months for companies in the benchmark gauge for U.S. equities reached 6.64 percent of share prices this month, according to data compiled by Bloomberg. That compared with the 6.61 percent average yield on junk bonds, data from Barclays Plc show. It was the first time the spread, a way of comparing debt and equity values, has shown stocks with a higher yield, according to Bloomberg data going back to 1987.

     Technology shares led the gains in the S&P 500 among 10 industries, rising 1.6 percent.

     Apple rallied 3.1 percent to $347.83. CEO Jobs will make a public appearance June 6 to introduce a cloud-computing product and a new version of the operating system that powers its iPad and iPhone touch devices. Jobs, in the midst of his third medical leave since 2004 as he battles a rare form of cancer, will deliver a keynote address at Apple’s Worldwide Developers Conference, the Cupertino, California-based company said in a statement today.

     Intel gained 1.4 percent to $22.51. The world’s largest chipmaker is seeking to help the personal-computer industry fend off a challenge from Apple’s iPad and other tablets. Intel’s new machines will be less than an inch thick, have days of battery life on standby, start up in just seconds and retail for less than $1,000, according to Intel Executive Vice President Sean Maloney. Intel aims to convert 40 percent of consumer laptops to the new category by the end of 2012.

     General Dynamics advanced 4.2 percent to $74.22. The second-largest U.S. shipbuilder received a $744 million contract from the U.S. Navy to construct two mobile landing platform ships. The contract comes with an option for the construction of a third ship, which would increase its size to $1.3 billion.

     BlackRock Inc.’s Chief Executive Officer Laurence D. Fink said he’s more bullish on U.S. equities than bonds because companies are benefiting from the weak dollar and have surplus cash to invest for growth.

     “We love equities, we love dividend stocks,” Fink said in a Bloomberg Television interview today in Hong Kong. “You own Treasuries because you’re worried about the world and the future, but if you believe the world is a good place to invest for the long cycle, you have to be in equities.”

     Fink, one of the co-founders of BlackRock in 1988, built what is now the world’s biggest asset manager through acquisitions including the purchase in December 2009 of Barclays Global Investors. He said in a March 3 interview that he’s a “big buyer” of the U.S. dollar, doesn’t see a “bear market” in bonds and would buy Treasuries if yields rise above 4 percent.

Have a wonderful evening everyone.

Be magnificent!

Chitragupta, who is supposed to be writing out our deeds in an account book is no other than the conscious and unconscious parts of our mind.The Lord of Law, to whom we have to render the account, is the Soul within us.

-Gopal Singh, 1911-1963

As ever,

Carolann

The clock indicates the moment,

but what does eternity indicate?

     -Walt Whitman, 1819-1892

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

Senior Vice-President &

Senior Investment Advisor