Month: October 2011

 

Dear Friends,

Tangents:  Happy Hallowe’en!

First Witch: When shall we three meet again?

In thunder, lightning, or in rain?

Second Witch: When the hurlyburly’s done,

When the battle’s lost and won.

Third Witch: That will be ere the set of sun.

First Witch: Where the place?

Second Witch: Upon the heath.

Third Witch: There to meet with Macbeth.

First Witch: I come, Greymalkin.

Second Witch: Paddock calls.

Third Witch: Anon!

All: Fair is foul, and foul is fair:

Hover through the fog and filthy air.

          -William Shakespeare,

                       Macbeth I.i.

 

Photos of the day

October 31, 2011

Co-hosts, from left, Meredith Vieira as Queen Elizabeth II; Hoda Kotb as Princess Eugenie; Kathie Lee Gifford as Princess Beatrice; Savannah Guthrie as Prince Charles; Al Roker as Prince Harry; Matt Lauer as Prince William; and Ann Curry as Kate Middleton are shown on the NBC “Today” television program’s annual Halloween show, in New York. Richard Drew/AP.

Candles illuminate a tomb on the eve of ‘All Saints Day,’ in the public cemetery, in Pamplona northern Spain. Alvaro Barrientos/AP.

Market Commentary:

Canada

By Kaitlyn Kiernan and Matt Walcoff

Oct. 31 (Bloomberg) — Canadian stocks fell, paring a monthly gain, as energy and raw material producers declined with commodity prices after Japan moved to weaken its currency against the U.S. dollar.

Barrick Gold Corp., the world’s largest producer of the metal, lost 2.6 percent as the U.S. Dollar Index surged the most since December 2008. Suncor Energy Inc., Canada’s largest oil and gas producer, dropped 4 percent. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, slid 6.1 percent after the industrial metal declined as investors awaited details on European leaders’ revamped strategy for curbing the region’s debt crisis.

 The Standard & Poor’s/TSX Composite Index decreased 267.45 points, or 2.1 percent, to 12,252.06.

“On the last day of the month anything can happen,” Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm manages C$1 billion ($963 million). “The strength in the U.S. dollar has caused gold to come off. So much of the Canadian economy is still raw materials and not finished products that a move here or there makes a difference.”

The S&P/TSX rallied 5.4 percent this month for its biggest increase since May 2009 after falling each of the previous seven months. Oil and raw materials shares led gains as investors speculated European leaders’ move to boost the region’s rescue fund will prevent the debt crisis from weakening banks and the broader economy.

Japan sold yen for the third time this year and pledged more sales after the currency’s gain to a post-World War II high against the dollar threatened a recovery from the March earthquake and nuclear disaster.  The S&P/TSX Materials Index retreated, ending a six-day streak of advances.

Gold producers fell after the metal dropped as the U.S. dollar surged, reducing demand for the precious metal as an alternative investment. Barrick lost 2.6 percent to C$49.21.

Goldcorp Inc., the world’s second-largest company in the industry by market value, slipped 2.3 percent to C$48.50. Semafo Inc., which mines in West Africa, decreased 8.1 percent to C$7.65.

Energy shares retreated the most in four weeks as oil dropped. Suncor declined 4 percent to C$31.75. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, declined 5.2 percent to C$34.14. Precision Drilling Corp., Canada’s largest contract drilling company, tumbled 7.4 percent to C$11.56.

Copper producers fell as the metal dropped after surging the most since at least 1988 last week. First Quantum lost 6.1 percent to C$20.91. Teck Resources Ltd., Canada’s largest base- metals and coal producer, decreased 3.7 percent to C$39.96. Lundin Mining Corp., which operates in Europe, retreated 4.6 percent to C$3.91.                       

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, sank 4.9 percent to C$47.18 as corn and wheat fell. Agricultural commodities declined as a stronger dollar eroded prospects for U.S. exports.

The S&P/TSX Industrials Index fell 2.6 percent, trimming the biggest monthly advance since November 2001. The index lost 19 percent in the third quarter, its worst slide since 2002.

Canadian Pacific Railway Ltd., the country’s second-biggest railroad, decreased 7.1 percent, the most since December 2008, to C$61.61 after jumping 7.9 percent Oct. 28, when William Ackman’s Pershing Square Capital Management LP bought a 12 percent stake in the company.

Cameron Doerksen, an analyst at National Bank of Canada, cut his rating on the shares to “underperform” from “sector perform,” while Turan Quettawala, an analyst at Bank of Nova Scotia, reduced his rating to “sector perform” from “sector outperform.” In a note to clients, Doerksen said Pershing Square’s acquisition may lead to management changes that are unlikely to affect earnings in the near term.                      

Canadian National Railway Co., the country’s largest railroad, lost 2.3 percent to C$78.08, trimming its biggest monthly gain since October 2006. Bombardier Inc., the maker of trains and airplanes, decreased 6.6 percent to C$4.12 after rallying 8.1 percent Oct. 28.

Grande Cache Coal Corp., which mines in Alberta, surged a record 68 percent to C$9.87 after China’s Winsway Coking Coal Holdings Ltd. and Japan’s Marubeni Corp. agreed to buy the Calgary-based metallurgical coal producer for C$10 a share in cash.

Cline Mining Corp., which is developing coal mines in Canada and the U.S., rallied 19 percent, the most this year, to C$2.11. The company may be the next in the industry to be acquired, Marc Johnson, an analyst at M Partners Inc., said in a note to clients.

Natural gas-pipeline company Pacific Northern Gas Ltd. rose a record 20 percent to C$36.67 after agreeing to be bought by AltaGas Ltd., a natural gas extraction and transmission company, for C$36.75 a share in cash. AltaGas fell 1.7 percent to C$29.41.

Technology-patent owner Wi-LAN Inc. gained 8 percent to C$7.42 after saying it doesn’t intend to raise its C$532 million bid for Mosaid Technologies Inc. Mosaid agreed Oct. 27 to be bought by Sterling Partners for C$590 million.

US

By Rita Nazareth

Oct. 31 (Bloomberg) — U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline in almost a month, amid concern European leaders will struggle to raise funds to contain the region’s sovereign debt crisis.

Stocks extended losses in the final hour of trading after Greek Prime Minister George Papandreou said he will put the European Union’s new agreement on financing for Greece to a referendum. Morgan Stanley and Citigroup Inc. dropped more than 7.5 percent, following the biggest weekly gain since July 2010 for financial shares in the S&P 500, as European banks retreated. Alcoa Inc. and Chevron Corp. tumbled at least 4.1 percent to pace declines in commodity shares.

The S&P 500 dropped 2.5 percent to 1,253.30 as of 4 p.m. New York time, erasing its 2011 gain and capping the biggest decline since Oct. 3. The benchmark gauge for U.S. equities rose 11 percent in October, the best month since 1991, snapping a five-month retreat. The Dow Jones Industrial Average lost 276.10 points, or 2.3 percent, to 11,955.01 today.

 “We’ve been on a buying stampede,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St.

Petersburg, Florida, said in a telephone interview. His firm manages $300 billion. “The market was due for a pullback,” he said. “Europe did get a rescue that buys them more time, but they are not anywhere near a resolution to their crisis.”

Stocks rose last week after European leaders agreed to expand the region’s bailout fund and U.S. economic growth accelerated. Earlier this month, the S&P 500 came within 1 percent of extending a drop from its peak in April to 20 percent, the common definition of a bear market. Since then, it has risen 14 percent.                      

China can’t play the role of “savior,” the official Xinhua news agency said yesterday, as investors awaited the country’s response to Europe’s request for money to boost its bailout fund. Japanese Finance Minister Jun Azumi said today the government took unilateral steps to weaken the yen. Group of 20 leaders will gather Nov. 3-4 in Cannes, France, while central bankers from Australia, the U.S. and Europe will hold interest- rate policy meetings this week.

Papandreou’s gambit risks pushing the country into default if rejected by voters, and raises the ante with dissidents inside his own party. His popularity has plunged after a raft of austerity measures cut pensions and wages, increased taxes and sparked a wave of social unrest. An opinion poll published Oct. 29 showed most Greeks believe the accord on a new bailout package and a debt writedown is negative.

The Organization for Economic Cooperation and Development urged Group of 20 governments and central banks to “act decisively” to restore confidence as it lowered its growth forecasts for the U.S. and the euro area.

European stocks slumped, paced by losses in banks, as Italian and Spanish bonds declined. The KBW Bank Index retreated 4.1 percent. Morgan Stanley fell 8.7 percent to $17.64. Citigroup dropped 7.5 percent to $31.59.

MF Global Holdings Ltd., the holding company for the broker-dealer run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy after making bets on European sovereign debt.

“The spike in the yield on the Italian note coupled with the actions to ring fence MF Global put investors back on the defensive,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion of assets, said in an e-mail. “This morning’s report of a decline in the Chicago business barometer reminded all that the economic fundamentals are still tenuous.”                     

The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 58.4 in October from 60.4 the prior month. A level of 50 is the dividing line between expansion and contraction. Economists forecast the gauge would drop to 59, according to the median of 55 estimates in a Bloomberg News survey. Projections ranged from 56 to 62.5.

The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 3.2 percent. The Dow Jones Transportation Average, a proxy for the economy, slid 2.4 percent.

Gauges of energy and raw material producers in the S&P 500 retreated at least 4.1 percent on concern about slower demand and as the dollar rallied, reducing the appeal of commodities as an alternative investment. Alcoa dropped 7 percent to $10.76. Chevron erased 4.2 percent to $105.05.

Yahoo! Inc. tumbled 5.6 percent to $15.64. The company is leaning toward selling its Asian assets and redistributing proceeds to shareholders, rather than selling itself to a group of buyers, according to people familiar with the situation. Dana Lengkeek, a spokeswoman for Yahoo, declined to comment.                        

Barton Biggs, the hedge fund manager who bought stocks when the market bottomed in 2009, boosted bullish bets on equities in his Traxis Global Equity Macro Fund after European leaders took action to contain the debt crisis.

The fund’s net long position has risen to 80 percent, Biggs, the founder of Traxis Partners LP, said in an interview with Betty Liu on Bloomberg Television’s “In the Loop” program. That compares with 65 percent on Oct. 17 and 40 percent about a month before that, and near 85 percent six months prior. Investors remain too pessimistic, meaning the rally will continue as they change their mind, he said.

“There’s a tremendous amount of money that’s trapped out of stocks,” Biggs said today. The rally is “going to continue for a while.”

American companies are beating Wall Street profit estimates for the 11th straight quarter, enough to revive a bull market that analysts say will eclipse any rally in the past 12 years. Price targets for companies in the index from more than 10,000 estimates suggest the S&P 500 will advance 13 percent to 1,447.93 in a year.

Companies from Google Inc. to Peabody Energy Corp. are delivering higher earnings at a time when Bill Gross, the co- chief investment officer of Pacific Investment Management Co., is warning that Europe’s debt crisis will spur a recession.

While more than $6.3 trillion has been erased from global equities since May, analyst forecasts imply the benchmark measure will post its biggest rally since the 1990s technology bubble, when the gain since March 2009 is included.

“This is looking like it’s going to be a really decent quarter,” Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles & Co. in Boston, which manages about $150 billion, said in an Oct. 25 interview. “Valuations are very, very low relative to history, and you don’t have to make heroic assumptions on multiples to get reasonable returns.”

The S&P 500 traded at 11.7 times reported income on Oct. 3, within 14 percent of its price-earnings ratio at the bottom of the financial crisis in March 2009, Bloomberg data show. The index gained 3.8 percent last week.

Have a wonderful evening everyone.

Be magnificent!

It is this desire to express himself that leads him to search for riches and power.

But he must understand that to accumulate material wealth is not to find this fulfillment.

What brings him back to himself is the interior light, and not exterior objects.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Firmness of purpose is one of the most necessary sinews

of character and one of the best instruments of success. 

Without it, genius wastes its efforts in a maze of

inconsistencies.

                   -Lord Chesterfield, 1694-1773

 

 

Dear Friends,

 

 

Tangents:

 

 

A Recent News Story From Reuters:

 

The world’s 7 billionth person will be born into a population more aware than ever of the challenges of sustaining life on a crowded planet but no closer to a consensus about what to do about it.

To some demographers the milestone foreshadows turbulent times ahead: nations grappling with rapid urbanization, environmental degradation and skyrocketing demand for healthcare, education, resources and jobs.

To others, a shrinking population, not overpopulation, could be the longer-term challenge as fertility rates drop and a shrinking workforce is pushed to support social safety for an aging populace.

“There are parts of the world where the population is shrinking and in those parts of the world, they are worried about productivity, about being able to maintain a critical mass of people,” Babatunde Osotimehin, executive director of the U.N. Population Fund, told Reuters.

“Then there are parts of the world where the population is growing rapidly. Many of these countries face challenges in terms of migration, poverty, food security, water management and climate change and we need to call attention to it.”

The United Nations says the world’s seven billionth baby will be born on October 31.

 

 

 

Market Commentary:

CANADA

By Matt Walcoff and Kaitlyn Kiernan

Oct. 25 (Bloomberg) — Canadian stocks fell for the first time in three days, led by financial and energy shares, as U.S.

home prices and consumer confidence declined and investors awaited a summit of European leaders tomorrow.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, dropped 2 percent as energy shares fell. Toronto-Dominion Bank, the country’s second- largest lender by assets, lost 1.7 percent after the S&P/Case- Shiller index of U.S. home prices declined more than forecast.

Barrick Gold Corp., the world’s biggest gold producer, gained 3.4 percent as the metal climbed for a third day.

The Standard & Poor’s/TSX Composite Index dropped 52.53 points, or 0.4 percent, to 12,109.75. “Uncertainty is still with us until we get better news, and we may not even get certainty tomorrow,” Tony Demarin, the chief investment officer at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$300 million ($295 million). “Gold is an asset class that protects you against the uncertainty of what’s going to happen there.” The S&P/TSX rallied 2.8 percent to a one-month high in the previous two days as investors speculated European leaders will reach a deal to prevent the continent’s sovereign debt crisis from weakening banks and the broader economy. The index is heading for its first monthly gain since February.

Another Summit

The EU finance ministers’ meeting scheduled for tomorrow was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled, EU President Herman Van Rompuy said.

The S&P/Case-Shiller index of U.S. home prices declined 3.8 percent in August from last year, S&P said today. Economists had forecast a retreat of 3.5 percent, according to the median estimate in a Bloomberg survey.

The U.S. Conference Board reported that its gauge of consumer confidence fell to the lowest level since March 2009.

The index trailed all 76 forecasts in a Bloomberg survey of economists. Canadian Natural lost 2 percent to C$33.84. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, decreased 2.6 percent to C$35.46. TransCanada Corp., the owner of Canada’s biggest pipeline system, fell 1.1 percent to C$43.46.

Banks Fall

The six largest S&P/TSX banks dropped. TD lost 1.7 percent to C$73.68. Royal Bank of Canada, its bigger domestic rival, slipped 0.8 percent to C$47.70. Mortgage insurer Genworth MI Canada Inc. decreased 3 percent to C$20.73.

Precious metals gained as economic concerns spurred demand for an investment haven. Barrick advanced 3.4 percent to C$48.05. Goldcorp Inc., the world’s second-largest producer of the metal by market value, increased 3.8 percent to C$48.02. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, climbed 3.7 percent to C$32.56.

Futuremed Healthcare Products Corp. jumped a record 31 percent to C$8.12 after Cardinal Health Inc. agreed to buy the company for C$8.15 a share in cash. Shares of Concord, Ontario- based Futuremed had plunged 25 percent from July 11 to yesterday and closed at a record-low C$5.60 Oct. 6.

US

By Rita Nazareth

Oct. 25 (Bloomberg) — U.S. stocks slid, halting a three- day rally, amid earnings and economic reports that disappointed investors and uncertainty over how much progress European leaders are making in debt-crisis talks. Treasuries rallied, while oil surged on signs of falling supplies.

The Standard & Poor’s 500 Index tumbled the most in three weeks, losing 2 percent to 1,229.05 as of the 4 p.m. close in New York. The Stoxx Europe 600 Index dropped 0.7 percent while the euro slipped from a six-week high, weakening 0.2 percent to $1.3901. Ten-year Treasury yields fell 13 basis points to 2.11 percent. The S&P GSCI Index of commodities added 0.6 percent as oil rose to a 12-week high. Amazon.com Inc. retreated 15 percent after missing profit forecasts.

The cancellation of tomorrow’s meeting of European Union finance ministers spurred concern that a summit of the region’s leaders will fail to produce agreements on how to tame the debt crisis. 3M Co. slid following lower-than-estimated earnings and United Parcel Service Inc. slipped as international shipping growth began to cool, while a gauge of U.S. consumer confidence sank to the lowest since March 2009.

“It’s hard to get excited in this environment,” Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, said in a telephone interview. “You have very anemic growth and you have a big a question mark about the debt situation in Europe.”

EU Meetings

The EU finance ministers’ meeting was canceled because the bank-recapitalization issue cannot be decided before other elements of the rescue package, a person familiar with the matter said on condition of anonymity. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled, EU President Herman Van Rompuy said.

The S&P 500 retreated after three straight gains lifted the benchmark index to the highest level since Aug. 3 and trimmed its year-to-date drop to less than 0.3 percent yesterday. 3M slid 6.3 percent for its worst drop in almost three years and biggest loss in the Dow Jones Industrial Average. Alcoa Inc., Bank of America Corp., Hewlett-Packard Co. and JPMorgan Chase & Co. also slid more than 3 percent as the Dow sank 207 points, or 1.7 percent, to 11,706.62.

MF Global Holdings Ltd. plunged 48 percent, the most since March 2008, after the futures broker said its quarterly loss widened on charges tied to deferred tax assets and a restructuring. Netflix Inc. slumped the most in seven years, sinking 35 percent, after the video-rental service posted bigger-than-forecast user losses following a price increase.

Topping Projections

Earnings have topped the average analyst estimate at about 74 percent of the 144 companies in the S&P 500 that have reported results since Oct. 11, Bloomberg data show. Net income has increased 14 percent for the group and sales have risen 10 percent. Earnings have surpassed estimates by an average 5.9 percent, compared with an average 8.5 percent each quarter since 2009, the data show.

After U.S. exchanges closed, Amazon missed the average analyst profit estimate by 42 percent and said it may post an operating loss of $200 million in the fourth quarter, while analysts projected income. Amazon is sacrificing profit margins in search of sales volume and market-share gains against companies such as Apple Inc.

Amazon shares tumbled 15 percent to $193.10 at 4:44 p.m.

New York time.

Extending Losses

Stocks extended losses in early trading as the Conference Board’s consumer-sentiment index decreased to 39.8 from a revised 46.4 reading in September. The S&P/Case-Shiller index of property values in 20 cities fell 3.8 percent from August 2010, the group said today. The median forecast of 30 economists surveyed by Bloomberg was for a 3.5 percent decline.

Oil in New York jumped 2.1 percent to $93.17 a barrel after surging 4.4 percent yesterday. Futures climbed as much as 3.7 percent, erasing this year’s loss. Supplies at Cushing, Oklahoma, the delivery point for West Texas Intermediate, the grade traded in New York, fell last week, a satellite survey showed.

Silver and gold rallied at least 3 percent on demand for the metals as haven investments, leading gains in nine of 24 commodities tracked by the S&P GSCI. Coffee, lead, zinc, hogs and copper fell more than 1.3 percent for the biggest declines.

The euro weakened against eight of 16 major peers, with the South Korean won and Swiss franc strengthening at least 0.4 percent to lead gains. The dollar slipped as much as 0.5 percent against the Japanese currency to touch a post-World War II low of 75.74 yen, before paring losses in half after the Nikkei newspaper reported that policy members will discuss steps to ease the impact of the strong yen on the Japanese economy.

Have a Wonderful Evening Everyone!

Be Magnificent!

As Always,

Kyle, for Carolann

 

 

Dear Friends,

Tangents:

Birthdays: Dizzy Gillespie, October 21, 1917

             Alfred Nobel, October 21, 1833, established Nobel Prize

What counts in making a happy marriage is not so much

how compatible you are, but how you deal with incompatibility.

                                   -Leo Tolstoy, 1828-1910

-from the Book of Days:  reflections from the past…

Conrad Russell to Katharine Asquith, October 22, 1929:

Your mother and I dined off a tray and then we turned on H.G. Wells on the wireless and we were soon both in the Land of Nod.  I wonder what the point of that sort of listening in is.  We can all read Wells if we want to; he has a vulgar accent and a squeaky scrannel voice.  It’s a wonderful invention for blind and bedridden invalids of course.  Also you can hear the result of the boat race [between Oxford and Cambridge Universities] more quickly.

 

Photo of the day 

October 21, 2011

Migrating cranes fly during sunset near Straussfurt, central Germany.Jens Meyer/AP.

Market Commentary:

Canada

By Matt Walcoff

Oct. 21 (Bloomberg) — Canadian stocks gained, narrowing a weekly decline, as oil and metals rose after euro-area finance ministers began meetings aimed at preventing their sovereign debt crisis from damaging banks and the economy.

Canadian Natural Resources Ltd., the nation’s second- biggest oil and gas producer by market value, climbed 2.7 percent as crude advanced. First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, gained 6.3 percent as the metal rallied after settling yesterday at the lowest since July 2010. Toronto-Dominion Bank, Canada’s second- biggest lender by assets, increased 1.1 percent.

The Standard & Poor’s/TSX Composite Index rose 119.16 points, or 1 percent, to 11,949.49, reducing its weekly loss to 1.1 percent.

“The market’s been moving on rumors there could be a start of a resolution to the difficulties they’re having over there,” Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, said in a telephone interview of negotiations in Europe. The firm oversees about C$1 billion ($991 million). “If there’s actually some meat to the resolution, I could see the markets moving much higher,” he said.

The S&P/TSX slipped this week as European officials struggled to reach an agreement on changes to the continent’s rescue initiatives. Canada’s stock benchmark gauge is set to underperform the S&P 500 this year for the first time since 2003 as base metals and fuels have retreated. Energy and raw- materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.                   

Today’s meeting of euro-area finance ministers will be followed by a gathering of ministers from all 27 European Union countries tomorrow. Leaders of EU countries are scheduled to meet on Oct. 23 and Oct. 26. European governments may offer as much as 940 billion euros ($1.3 trillion) to fight the debt crisis, two people familiar with the discussions said yesterday.

The S&P/TSX Energy Index completed its fourth-straight weekly gain. Canadian Natural climbed 2.7 percent to C$33.31. Encana Corp., the country’s biggest natural gas producer, rose 3.2 percent to C$21.10.

Bankers Petroleum Ltd., which produces oil and gas in Albania, rallied 10 percent to C$4.88 a day after John Malone, an analyst at Ticonderoga Securities LLC, boosted his rating on the shares to “buy” from “neutral.” The company’s share price assumed too low of an oil price, Malone wrote in a note to clients.                       

Precision Drilling Corp, Canada’s largest contract drilling company, sank 5.3 percent to C$10.98 after reporting earnings that trailed the average analyst estimate in a Bloomberg survey by 11 percent, excluding certain items.

Raw-materials companies advanced as the U.S. Dollar Index fell to the lowest in five weeks.

First Quantum increased 6.3 percent to C$15.99 as copper futures surged the most since June 2009. Extorre Gold Mines Ltd., which explores in Argentina, soared 7.8 percent to C$8.02 as gold futures rebounded from the lowest settlement price since Sept. 26. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, climbed 0.9 percent to C$49.63 as wheat gained.

The six biggest S&P/TSX banks and the three largest insurers each rose. TD gained 1.1 percent to C$74.50. Royal Bank of Canada, its bigger domestic rival, advanced 1 percent to C$48.04. Manulife Financial Corp., North America’s fourth- largest insurer, climbed 2.5 percent to C$12.75.

Canadian National Railway Co., the country’s biggest railroad, rose 1.6 percent to C$75.04 to lead the S&P/TSX Industrials Index to its fourth-straight weekly gain, the longest streak since February. CN and Canadian Pacific Railway Ltd. advanced this week as CSX Corp. and Union Pacific Corp. reported profit increases.

US

By Rita Nazareth

Oct. 21 (Bloomberg) — U.S. stocks advanced, giving the Standard & Poor’s 500 Index its longest streak of weekly gains since February, amid speculation of an agreement to contain Europe’s debt crisis and further Federal Reserve stimulus.

Morgan Stanley and Wells Fargo & Co. added at least 2.1 percent as European lenders rallied. Alcoa Inc. and Boeing Co. rose more than 2.8 percent, pacing gains in companies most-tied to the economy. McDonald’s Corp. climbed 3.7 percent after profit jumped as lower-priced items boosted U.S. store sales.

Honeywell International Inc. advanced 5.8 percent as a recovery in commercial aerospace helped earnings climb 44 percent.  The S&P 500 increased 1.9 percent to 1,238.25 as of 4 p.m. New York time, the highest level since Aug. 3. The gauge rose 1.1 percent since Oct. 14, gaining for a third straight week.

The Dow Jones Industrial Average climbed 267.01 points, or 2.3 percent, to 11,808.79 today, erasing its 2011 decline.

“There’s a sense that Europe will come out with something that will calm down imminent fears of the crisis escalating out of control,” James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $360 billion, said in a telephone interview. “Markets are also digesting Federal Reserve lip service given to additional  quantitative easing moves. However, it appears most investors are unsure whether additional easing is needed.”

Gains accelerated after the S&P 500 climbed past 1,233.10, its intraday peak on Oct. 18. A burst of trading in E-Mini S&P 500 futures occurred at that level, according to data compiled by Bloomberg. Volume jumped to 31,774 contracts at 10:17 a.m. New York time, the most for any minute of the day at that point.

Three rallies since the U.S. government was stripped of its AAA credit rating by S&P have stopped around 1,220.

“The path of least resistance is higher,” Christopher Verrone, head of technical analysis at New York-based Strategas Research Partners, said in a phone interview. “I’m interested to see what happens in the 1,260-1,270 range. That is when we’ll get more information on how durable this advance is.”

France retreated in a clash with Germany over how to expand the power of Europe’s bailout fund after the first meeting in a six-day marathon intended to solve the debt crisis. France’s view that the fund, the European Financial Stability Facility, should get a banking license enabling it to borrow from the European Central Bank, “is not a definitive point of discussion for us,” French Finance Minister Francois Baroin told reporters today in Brussels. “What matters is what works.”

French President Nicolas Sarkozy and German Chancellor Angela Merkel are scheduled to meet tomorrow in Brussels before a summit the next day and a follow-up leaders’ gathering on Oct. 26 to nail down what they’ve called a “comprehensive” plan.

“While we won’t get a definitive response from the Europeans this weekend on how best to deal next with their debt crisis, officials are still holding out hope that just a few extra days will complete the job,” Peter Boockvar, an equity strategist at Miller Tabak & Co., wrote in a note today.

American banks rallied following gains in European lenders. Morgan Stanley rose 2.5 percent to $17.02. Wells Fargo added 2.1 percent to $26.31.

Investors also reacted to comments from Fed Governor Daniel Tarullo, who late yesterday called for resuming large-scale purchases of mortgage bonds, boosting chances of a third round of asset buying aimed at reviving growth. Today, Fed Vice Chairman Janet Yellen said a third round of large-scale securities purchases might become warranted if necessary.

“While the hurdles for QE3 remain high, it’s still on the table as an option,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “It becomes a question of whether or not it’s effective.”

The Morgan Stanley Cyclical Index of companies most-tied to the economy rose 3 percent. The Dow Jones Transportation Average, a proxy for the economy, added 2.2 percent. Alcoa, the largest U.S. aluminum producer, advanced 2.8 percent to $10.23. Boeing climbed 3.4 percent to $64.59.

Earnings reports have also gained investors’ attention today. Profit for S&P 500 companies will climb 16 percent in the third quarter and rise 18 percent to a record $99.25 for all of 2011, according to analyst estimates compiled by Bloomberg.

About three quarters of the S&P 500 companies that reported results since Oct. 11 beat analysts’ estimates.

McDonald’s added 3.7 percent to $92.32. Chief Executive Officer Jim Skinner has sought to draw American diners with low- priced menu items, such as the $1 McDouble burger, as the nation’s 9.1 percent unemployment rate saps consumer confidence. Sales in the U.S. were driven by fruit smoothies, Chicken McNuggets and breakfast foods, the company said.

Honeywell climbed 5.8 percent to $51.28 as the company also increased its full-year forecast. Honeywell and other U.S. manufacturers have posted earnings growth this year amid a slowing economy by keeping costs in check and expanding abroad.

Aerospace sales rose 8 percent in the quarter, the company said. Seagate Technology Plc surged 28 percent, the most since it went public in 2002, to $15.42. ThinkEquity LLC analysts said that the maker of disk drives may gain market share from rival Western Digital Corp. due to recent Thai floods.

Energy and raw material producers gained as the S&P GSCI Index of commodities advanced 1 percent. Freeport-McMoRan Copper & Gold Inc. gained 5.2 percent to $36.58. ConocoPhillips added 2.2 percent to $71.83.

General Electric Co. slid 1.9 percent, the biggest decline in the Dow, to $16.31 as tighter profit margins in industrial businesses from energy to aviation overshadowed third-quarter growth led by the finance unit.                     

Companies transporting holiday merchandise may outperform the stock market as a rise in consumer spending indicates seasonal shopping may be better than forecast.

Retailers were cautious when they placed orders this summer amid concerns the economy was “falling apart” and headed for a double-dip recession, said David Ross, a Baltimore-based transportation analyst at Stifel Nicolaus & Co. Even though September retail sales rose the most in seven months, shares of trucking and airfreight companies still reflect pessimistic forecasts, he said.

 “There is a greater chance of a positive holiday-shopping surprise than a negative one,” said Ross, who maintains “buy” ratings on United Parcel Service Inc. and Old Dominion Freight Line Inc. If retailers are caught short after under-ordering, the peak shipping period — typically July through September — will occur later, he said.

Have a wonderful weekend everyone.

Be magnificent!

It is man’s social nature which distinguishes him from the brute creation.

If it is his privilege to be independent, it is equally his duty to be inter-dependent.

Only an arrogant man will claim to be independent of everybody else and be self-contained.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

I think you should take your job seriously,

but not yourself – that is the best combination.

            -Judi Dench, 1934- 

 

 

Dear Friends,

Tangents:

A thought:

Time drags you along

“Let me start by asking you a simple question: What time is it right now?” Adam Frank writes for National Public Radio.  “To answer this query you probably looked at the clock on your computer or on your cellphone.  It told you something like 9:12 a.m. or 11:22 a.m. or 1:37 p.m.  But what is 1:37 p.m.?  What is the meaning of such an exact metering of minutes?….[D]id 1:37 p.m. even exist 1,000 years ago for peasants living in the Dark Ages of Europe, Song Dynasty China or the central Persian Empire?  Was there such a thing as 1:37 p.m. across the millennia that comprise the vast bulk of human experience?  The short answer is “no.”  But 1:37 exists for you….You feel minutes in a way that virtually none of your ancestors did.  You feel them pass and you feel them drag on with all the frustration, boredom, anxiety and anger that can entail.  For you, those minutes are real.”    

Photos of the day

October 18, 2011

Migrating Common Cranes fly to their night roost at sunset near the village of Linum, Germany. The marshes and lakes in the state of Brandenburg attract tens of thousands of cranes during their autumn migration from their breeding grounds in Russia and Scandinavia to their wintering areas in southwestern Europe. Up to 60,000 birds gather during the peak of migration turning the area into the biggest migration stopover in northern Europe. Thomas Krumenacker/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Oct. 18 (Bloomberg) — Canadian stocks rose from a one-week low, led by energy producers, as crude oil climbed amid optimism that economic growth will stabilize after Bank of America Corp. reported better-than-estimated earnings.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 2.8 percent as crude advanced to a one-month high.

Canadian National Railway Co., the country’s largest railroad, led industrials higher as it rose 3 percent. BlackBerry maker Research In Motion Ltd. climbed 3 percent after unveiling a new operating system.

The Standard & Poor’s/TSX Composite Index advanced 130.07 points, or 1.1 percent, to 12,053.11.

“The turnaround has been driven by the energy sector as crude has been creeping up around the prospect of double-dip recessions around the world being less likely,” Timothy Lazaris, chief executive officer of Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($54.3 million).

The index declined 1.3 percent yesterday as metals and fuels retreated on concern European officials may not have a final plan to address the continent’s debt crisis this year. The S&P/TSX lost 16 percent from April 5 through yesterday as oil slumped 20 percent and copper sank 21 percent. Energy and raw- materials companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.                      

Bank of America Corp., this year’s worst performer in the Dow Jones Industrial Average, swung to a profit from a year- earlier loss on higher revenue, better credit quality and one- time gains, raising hopes that economic growth will stabilize.

The S&P/TSX Energy Index gained 2.4 percent as crude oil advanced. Suncor Energy Inc. jumped 2.8 percent to C$30.60. Canada’s largest oil and gas producer and its partners discovered oil in the Norwegian North Sea in the Butch prospect near the Ula field.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, advanced 2.3 percent to C$32.96.

Enbridge Inc., Canada’s largest pipeline company, rallied 1.6 percent to C$34.90. TransCanada Corp., the owner of Canada’s biggest pipeline system, rose 1.8 percent to C$43.63.

Canadian National Railway Co. led the S&P/TSX Industrials Index higher after Cormark Securities Inc. boosted the railway to “buy” from “market perform,” saying rails will be among the first industries to recover from the economic slowdown.

Canadian National Railway gained 3 percent to C$74.65. Canadian Pacific Railway Ltd., Canada’s second-biggest railroad, rose 4.9 percent to $56.08.

Stocks fell earlier as precious and base metal producers declined on a report that China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009. The gain was less than the median estimate of 9.3 percent in a Bloomberg News survey of 22 economists and followed a 9.5 percent increase in the previous three months.

Barrick Gold Corp. lost 1 percent to C$47.79. Goldcorp., the world’s second-biggest gold producer by market value, dropped 2.5 percent to C$47.05. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, slipped 3.4 percent to C$31.06.

Teck Resources Ltd., the country’s biggest base-metals and coal producer, lost as much as 4.5 percent as copper futures fell before surging to close 1.9 percent higher at C$35.95.                     

Research In Motion Ltd. advanced 3 percent to C$23.59. The BlackBerry maker, looking to spur consumer interest in its devices after losing sales to Apple Inc. and Google Inc., unveiled a new operating system for its PlayBook tablet computer and new smartphones.

Niko Resources Ltd. surged 8.5 percent, the second-most in the S&P/TSX Index, to C$50.21. The oil and gas producer with operations in South Asia was raised to “outperform” from “market perform” at Raymond James Ltd., which cited improved risks on reserves and exploration potential.

Industrial Alliance Insurance and Financial Services Inc. sank 4.9 percent, the most since July 2009, to C$30.65. The provider of insurance and retirement plans was cut to “hold” from “buy” at Desjardins Securities Inc., which cited the impact of the low-interest rate environment.

Lululemon Athletica Inc. slumped 2.9 percent to C$52.11.

The yoga-wear retailer was rated a new “neutral” at Macquarie Group Ltd, which gave a 12-month price estimate of $51 on the U.S. shares. Macquarie said competition is increasing and the stock is “pricey.”

US

By Rita Nazareth

Oct. 18 (Bloomberg) — U.S. stocks gained, sending the Standard & Poor’s 500 Index to the highest level since August, as Bank of America Corp. paced a rally in financial shares and optimism grew over progress on expanding Europe’s rescue fund.

Bank of America climbed 10 percent after it swung to a profit as credit quality improved. A gauge of homebuilders in S&P indexes jumped 9.6 percent, the most since March 2009, as data showed that industry sentiment increased more than forecast. Caterpillar Inc. and Alcoa Inc. added at least 3.9 percent, pacing gains among companies most-tied to the economy.

Apple Inc. tumbled 5.9 percent after the close of regular trading after profit and sales missed analysts’ expectations.

The S&P 500 added 2 percent to 1,225.38 at 4 p.m. New York time, erasing yesterday’s drop. The benchmark gauge rose to the highest level since Aug. 3, two days before S&P stripped the U.S. of its AAA credit rating. The Dow Jones Industrial Average gained 180.05 points, or 1.6 percent, to 11,577.05 today.

“We could be into one of those buying stampedes,” Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a telephone interview. His firm manages $300 billion. “It feels that the worst is in the rear-view mirror. Housing is not going to be a thing that sucks you down into a recession. Earnings are still going to look pretty good. Something has to happen in Europe.”

The S&P 500 rose from the threshold of a bear market early this month amid optimism over corporate earnings and steps by European leaders to support banks. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months. The S&P 500 briefly rose above that range, reaching 1,233.10 today.

Profit for S&P 500 companies will climb 17 percent in the third quarter and rise 18 percent to a record $99.76 for all of 2011, according to analyst estimates compiled by Bloomberg. The S&P 500 is trading for 11.1 times forecast earnings for 2012, compared with its five-decade average of 16.4 times reported income, according to data compiled by Bloomberg.

Global stocks rallied. France and Germany are engaged in “intensive talks” on bolstering the European Financial Stability Facility, Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, said today. He declined in an interview to comment on a report in the Guardian that they reached agreement on increasing the size of the fund, saying he won’t comment on intermediate results of the negotiations.

In the U.S., data showed that homebuilders were less pessimistic than forecast in October, as near record-low borrowing costs and price decreases raised hopes the market will turn for the better over the next six months.                          

The Morgan Stanley Cyclical Index of companies most-tied to the economy added 3.3 percent. The Dow Jones Transportation Average advanced 3.1 percent. Alcoa gained 5.9 percent to $10.14. Caterpillar climbed 3.9 percent to $84.72. PulteGroup Inc., the largest U.S. homebuilder by revenue, rallied 11 percent to $4.46.

“It’s reality beating investors’ poor expectations,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “That happens particularly with Bank of America, given that everyone assumed for the worst. It’s not a matter of if, it’s just a matter of when the industry recovers.”

The KBW Bank Index rallied 6.1 percent as all of its 24 stocks advanced. The gauge slumped 3.9 percent yesterday.

Bank of America rose 10 percent to $6.64. The provision for loan losses dropped to $3.4 billion from $5.4 billion a year earlier as credit improved in the card unit and commercial lending, the bank said. The card unit swung to a profit in the quarter, while income rose at the deposit unit, global wealth and investment management, and global commercial banking.

State Street Corp. gained 11 percent to $37.49. The custody bank under pressure from activist investor Nelson Peltz to increase profitability said third-quarter profit rose a stronger-than-expected 11 percent as custody assets increased.

Goldman Sachs Group Inc. added 5.5 percent to $102.25 even after reporting its second quarterly loss in 12 years as the firm lost money on investments and revenue declined from trading, asset management and securities underwriting.

“It’s time to get less bearish,” David Kelly, chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “Investors ought to be able to look forward and recognize that the economy does muddle through. There’s a better underlying story for banks and also there’s housing. There’s a realization that at some stage this thing is going to turn.”

 International Business Machines Corp. tumbled 4.1 percent to $178.90. The biggest computer-services company missed sales estimates for the first time in five quarters. Revenue showed slowing growth in IBM’s software, hardware and services businesses.

 Nasdaq-100 Index futures lost 0.9 percent to 2,342.50 at 5:05 p.m. after the close of regular trading. Apple retreated 5.9 percent to $397.15 as profit missed estimates as the company sold fewer iPhones than analysts’ projected.

Intel Corp. also reported results after the market close.

The shares gained 4.4 percent to $24.43, after rising 0.5 percent in regular trading. The chipmaker forecast fourth- quarter sales that exceeded some analysts’ estimates, citing strong demand for laptop computers in emerging markets.

 The S&P 500 may rise about 4 percent this week before the gain ends, according to Tom DeMark, the creator of indicators meant to identify turning points in the price of securities.

DeMark, whose prediction last month that the S&P 500’s decline would stop at 1,076 proved prescient when the index bottomed at 1,074.77, said the rally that lifted the benchmark as much as 14 percent since then will fizzle. The S&P 500 will rise as high as 1,254 before falling at least 5.6 percent, he wrote in an e-mail today.

Have a wonderful evening everyone.

Be magnificent!

An eye for an eye only end up making the whole world blind.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Never let your sense of morals

keep you from doing what is right.

          -Isaac Asimov, 1920-1992

 

 

Dear Friends,

 Tangents:

 Milestones: October 17^th, 1989 – San Francisco earthquatke.

October 17^th, 1970 – Laporte’s Body Found near Montreal.  The Globe & Mail reminds us today that this was the day that Quebec cabinet minister Pierre Laporte’s body  was found in the trunk of a Chevy belonging to the FLQ cell leader, Paul Rose, in an airport parking lot southeast of Montreal.  I was a kid growing up in Montreal when this happened and I remember vividly when Pierre Trudeau  triggered the War Measures Act.  There were military personnel in uniform patrolling the streets of the city – thousands of soldiers in the streets and the  arrest of 497 citizens.

 “Outrage turned the province’s independence movement firmly onto a peaceful, democratic path.”  -Les Perreaux.

 Interesting 60 Minutes show last night on Van Gogh’s possible (probable?) demise – murdered by a bullying youth, not suicide.  It is the culmination of the research of two authors with a new book on the subject. 

New Van Gogh biography: Painter did not commit suicide, was shot

                                                                                              -by Igor I. Solar.

 

Vincent Van Gogh would have died from an accidental shooting by a teenager in the countryside of the French town of Auvers-sur-Oise, according to a new biography of the artist, calling into question the theory of his suicide.

After studying thousands of documents and books related to the painter, Steven Naifeh and Gregory White Smith, authors of “Van Gogh, the Life”, a new biography of the Dutch post-Impressionist artist concluded that, contrary to what has been believed, Van Gogh did not commit suicide, but he was accidentally hit by a bullet shot by a youngster he met at the time he was at a wheat field where he used to paint. The biographers presume that the shooter was known to the painter.

According to the book, René Secrétan, a 16-year-old vacationer, a fan of Wild West adventures, was dressed as a cowboy when he hit the artist in the chest by accident with a .380 calibre weapon.

According to the biography, after being hurt, the artist staggered back to the Ravoux Inn where he was staying. When someone there asked him if he had tried to kill himself, the artist vaguely replied, “I guess so”. He died 30 hours later after pronouncing his last words:

“The sadness will last forever.”

The authors believe that the artist made that statement in order to protect René Secrétan and his brother Gaston, who was also present at the time of the shooting.

According to the authors of the biography, the suicide theory does not fit with the view that the painter had about “causing one’s own death”; he had referred to suicide as “immoral and indecent” and “an act of cowardice”. Additionally, the direction of the bullet in his chest was oblique and it is supposed that if he had shot himself the direction of the bullet would have been straight into his heart. Furthermore, the weapon was never found. Also missing where the easel, paint and brushes he supposedly had brought with him to the countryside on that day, July 27, 1890.

Naifeh and White Smith claim in their book that the Dutch painter, who died at age 37 after several years of frequent bouts of mental illness including anxiety, increasing frustration and severe fits of depression and hallucinations, shortly before his death was extremely sad, lonely and psychologically tormented, thus he may have received and consider death a relief to his endless despair.

However, experts at the Van Gogh Museum remain unconvinced. Leo Jansen, curator at the Museum and editor of the artist’s letters, calls the biography a “great book,” but has doubts about the authors’ theory of the Dutch master’s death.

“We cannot yet agree with their conclusions because we do not think there is enough evidence yet,” said Jansen.

Ethnic Dong minority women wear traditional costumes and accessories during a Kam Grand Choir gathering in Tongguan village, Guizhou province, China. Villagers wear their traditional costumes for choir practice whenever they are free from farming duties. Practice usually occurs twice a week during the day and almost every evening. Sheng Li/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Oct. 17 (Bloomberg) — Canadian stocks retreated after their biggest weekly surge in two years as optimism faded for a quick fix to Europe’s debt crisis and Sun Life Financial Inc. reported it had a net loss in the third quarter.

Sun Life, Canada’s third-largest insurer, dropped 9 percent. Teck Resources Ltd., the country’s biggest base-metals and coal producer, declined 3.8 percent as copper slipped from a two-week high. Suncor Energy Inc., Canada’s largest oil and gas producer, decreased 3 percent as the fuels declined.

The Standard & Poor’s/TSX Composite Index lost 158.69 points, or 1.3 percent, to 11,923.04 after Group of 20 finance ministers and central banks set an Oct. 23 deadline for delivery of a plan to avoid a Greek default, bolster banks and curb contagion.

“When Europe puts on a deadline date, it makes people extremely nervous and very jumpy,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview.

Michael’s firm oversees C$1 billion ($983 million). “Europe is quite important, and you don’t want 17 nations going in 17 different directions.”

The S&P/TSX rallied 4.3 percent last week, the most in two years, as energy and raw-materials stocks climbed on speculation the European Union, G-20 and International Monetary Fund were making progress toward a plan to prevent sovereign-debt issues from weakening the continent’s banks.

European leaders won’t have a complete fix for the debt crisis at their Oct. 23 summit in Brussels, Steffen Seibert, German Chancellor Angela Merkel’s chief spokesman, said in a briefing in Berlin today.

The Federal Reserve Bank of New York said its regional manufacturing index fell more last month than economists in a Bloomberg survey had forecast.

Sun Life said it had a C$621 million loss in the third quarter due in part to declines in equities and low interest rates. The insurer was expected to have adjusted net income of C$260.6 million, or 38 cents a share, in the third quarter, according to Bloomberg estimates.

Sun Life slumped 9 percent, the most since August 2009, to C$24.07. Manulife Financial Corp., North America’s fourth- largest insurer, decreased 4.6 percent to C$12.34.

Precious-metals companies fell as the U.S. Dollar Index rebounded from a four-week low. Barrick Gold Corp., the world’s largest gold producer, slipped 1 percent to C$48.28. Agnico- Eagle Mines Ltd., Canada’s fifth-biggest company in the industry by market value, dropped 2.3 percent to C$58.48.

Lake Shore Gold Corp., which mines in Canada, sank 10 percent to C$1.47 after Wendell Zerb, an analyst at Canaccord Financial Inc., cut his 12-month price estimate on the shares to C$2 from C$2.35.

PMI Gold Corp., which is developing a mine in Africa, soared 17 percent to C$1.21 after Nana Sangmuah, an analyst at Clarus Securities Inc., gave the company a “buy” rating in new coverage. The shares jumped 78 percent Oct. 14 after the company reported a tripling of reserves.

Silver Quest Resources Ltd., which explores for precious metals in Canada, surged 28 percent, the most since September 2009, to C$1.11 after New Gold Inc. agreed to buy it in a deal the companies valued at at least C$156 million.

 Base-metals and coal producers in the S&P/TSX fell after jumping 20 percent in the previous two weeks.

Teck dropped 3.8 percent to C$35.29. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, decreased 6 percent to C$16.07. Grande Cache Coal Corp., which mines in Alberta, tumbled 11 percent to C$4.69.                    

The S&P/TSX Energy Index retreated with oil and gas futures after gaining the most since May 2009 last week. Suncor lost 3 percent to C$29.76. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, decreased 2.2 percent to C$32.20. Western Canadian oil producer PetroBakken Energy Ltd. plunged 5.4 percent to C$8.01 after soaring 23 percent last week.

Trican Well Service Ltd., Canada’s largest oilfield- services company, slumped 7 percent to C$17.80 after Andrew Bradford, an analyst at Raymond James Financial Inc., cut his rating on the stock to “outperform” from “strong buy.” The European debt crisis may keep oil prices from rising next year, Bradford wrote in a note to clients.

BlackBerry maker Research In Motion Ltd. sank 5.6 percent to C$22.90 after rival Apple Inc. sold more than 4 million iPhone 4S devices in their first three days on sale.

Finning International Inc., the world’s largest Caterpillar dealer, rallied 6.4 percent to C$21.33 after Cherilyn Radbourne, an analyst at Toronto-Dominion Bank, raised her rating on the company to “buy” from “hold.” The company’s difficulties obtaining parts for its Canadian operations should be resolved by year end, Radbourne wrote in a note to clients.

Prime Restaurants Inc., the franchiser of the East Side Mario’s and Casey’s chains in Canada, surged a record 39 percent to C$6.74 after agreeing to be bought by Cara Operations Ltd. for C$7 a share.

US

By Rita Nazareth

Oct. 17 (Bloomberg) — U.S. stocks declined, after the biggest weekly gain in the Standard & Poor’s 500 Index since 2009, as financial shares slumped and the German government damped optimism of a quick fix to Europe’s debt crisis. Banks in the S&P 500 tumbled 6.3 percent as a group.

Citigroup Inc. and Wells Fargo & Co. slipped at least 1.6 percent as revenue dropped amid economic weakness and market turmoil linked to Europe. Alcoa Inc. and Caterpillar Inc. retreated more than 3 percent to pace losses among companies most-tied to the economy. Gannett Co. sank 8.7 percent after profit fell as newspaper advertising declined.

The S&P 500 decreased 1.9 percent to 1,200.86 at 4 p.m. New York time. The benchmark gauge for American equities rallied 6 percent last week. The Dow Jones Industrial Average retreated 247.49 points, or 2.1 percent, to 11,397 today.

“European leaders want to strike the right tone that they will fix things, but not create too much expectations,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which manages $3.4 billion, said in a telephone interview. “If we don’t have a healthy financial system, it’s going to be difficult for there to be a sustainable economic recovery. In addition, the market is selling off because we got near the top of the trading range.”

The S&P 500 rose last week amid optimism over corporate earnings and steps by European leaders to support the region’s banks. It surged 11 percent from Oct. 3, its lowest close in more than a year, through Oct. 14. The rebound brought the gauge close to the top of a price range between 1,074.77 and 1,230.71, where it’s traded for more than two months.

Germany said European Union leaders won’t provide the complete fix to the euro-area debt crisis that global policy makers are pushing for at an Oct. 23 summit. Group of 20 finance ministers and central bankers concluded weekend talks in Paris endorsing parts of an emerging plan to avoid a Greek default, bolster banks and curb contagion.

“There’s not going to be a quick fix to the problems in Europe,” Brian Jacobsen, chief portfolio strategist at San Francisco-based Wells Fargo Funds Management, which oversees $215 billion, said in a telephone interview. “This economic recovery will be uneven in terms of geography and the sectors that are really benefiting from the slow growth.”

U.S. equity futures fell before the open of regular trading as data showed that manufacturing in the New York region contracted in October at a faster pace than forecast. Separate figures showed that industrial production in the U.S. advanced in September.                      

The Morgan Stanley Cyclical Index of companies most-tied to the economy lost 3.1 percent. The Dow Jones Transportation Average, a proxy for the economy, retreated 2.8 percent. Alcoa, the largest U.S. aluminum producer, slumped 6.6 percent to $9.58. The shares had the biggest decline in the Dow. Caterpillar retreated 3.1 percent to $81.52.

The KBW Bank Index decreased 3.9 percent as 23 of its 24 stocks fell. The index jumped 6.9 percent last week.

Wells Fargo dropped 8.4 percent to $24.42. Investors shrugged off the record profit posted by Wells Fargo today and focused on a 6 percent decline in revenue to $19.6 billion. That missed the $20.2 billion estimate of analysts as low interest rates cut into profit on loans. Chief Executive Officer John Stumpf is focusing on costs as the 9.1 percent U.S. jobless rate and slow economy keep borrowers on the sidelines.

“The economic recovery has been more sluggish and uneven than anyone anticipated,” Stumpf said in a statement. “We can’t change the economic environment, yet we have worked hard to control the variables we can.”                    

Citigroup retreated 1.7 percent to $27.93, even as its quarterly profit beat analysts’ estimates, helped by an accounting gain and a reduction in losses tied to soured loans. Excluding the accounting adjustment, revenue fell 8 percent.

Gannett slumped 8.7 percent to $9.99. The owner of 82 newspapers and 23 television stations reported third-quarter profit decreased 1.6 percent as publishing revenue, including advertising and circulation, declined 5.3 percent.

American Airlines parent AMR Corp. dropped 6.1 percent to $2.76, after falling as much as 11 percent today, triggering a brief halt in trading. American Airlines said it recessed negotiations with its pilots union today after making “significant progress” toward a contract that would end more than five years of talks.

Halliburton Co., the world’s second-largest oilfield services provider, fell 7.9 percent to $34.48 on concern about oil-price volatility and the slower-than-expected growth in its international business.                          

El Paso Corp. surged 25 percent, the most since 2002, to $24.45, as Kinder Morgan Inc. agreed to buy the company for $21.1 billion. The cash and stock offer is valued at $26.87 per El Paso share, or 37 percent more than the Oct. 14 closing price, Houston-based Kinder Morgan said in a statement yesterday.

Utility, telephone and consumer staples providers, which are least-tied to the economy, outperformed the S&P 500 today.

 Stock market bulls and bears agree on at least one thing. The highest valuations for makers of household goods since 2008 signal the best is over after the industry rose more than any other group this year.

Bears say the easy money has been made in so-called defensive shares should the world slip into a recession. Bulls favor companies with faster earnings growth and cheaper valuations. The last time household-goods producers were this expensive versus the MSCI World, stocks were about to begin an advance in which bank, mining and industrial stocks jumped more than 137 percent, while consumer staples rose 76 percent.

“You’ve got too much money that has been bet that we’re going into a recession,” said Jeffrey Saut, who helps oversee $300 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida. “If we don’t go into a recession, you’ll get a whole rotation out of these highly valued defensive stocks into more aggressive stocks.”

Barton Biggs, who bought stocks when the market bottomed in March 2009, boosted bullish bets on equities in his Traxis Global Equity Macro Fund on improving U.S. economic data. The fund’s net long position rose to 65 percent from 40 percent about a month ago, according to Biggs, the founder of Traxis Partners LP, in an interview with Betty Liu on Bloomberg Television’s “In the Loop” program. Biggs said on Sept. 22 that bullish bets at all Traxis funds had fallen to 20 percent.

“I’m inclined to stay where I am, which is moderately, cowardly bullish,” Biggs said. “The thing that makes me want to hang in there is that the high frequency economic news from the U.S. has definitely improved. It’s gotten pretty good.”

Have a wonderful evening everyone.

Be magnificent!

Facts are not frightening.

But if you try to avoid them, turn your back and run, then that is frightening.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

What saves a man is to take a step.  Then another

step.  It is always the same step, but you have

to take it.

         -Antoine de Saint-Exupéry, 1900-1944 

 

 

Dear Friends,

Tangents:

Birthday: Paul Simon, born October 13, 1941.

October
O hushed October morning mild,
Thy leaves have ripened to the fall;
To-morrow’s wind, if it be wild,
Should waste them all.
The crows above the forest call;
To-morrow they may form and go.
O hushed October morning mild,
Begin the hours of this day slow,
Make the day seem to us less brief.
Hearts not averse to being beguiled,
Beguile us in the way you know;
Release one leaf at break of day;
At noon release another leaf;
One from our trees, one far away;
Retard the sun with gentle mist;
Enchant the land with amethyst.
Slow, slow!
For the grapes’ sake, if they were all,
Whose leaves already are burnt with frost,
Whose clustered fruit must else be lost–
For the grapes’ sake along the wall.

                        -Robert Frost, 1915

Photos of the day 

October 13, 2011

Queen Jetsun Pema and King Jigme Khesar Namgyal Wangchuck pose after they were married at the Punakha Dzong in Punakha, Bhutan. The 31-year-old reformist monarch of the small Himalayan Kingdom wed his commoner bride in a series of ceremonies. Kevin Frayer/AP.

Nona Moumani fixes globes in a display at a booth at the Book Fair in Frankfurt. The world’s largest book fair runs until Sunday. Michael Probst/AP.

Market Commentary:

Canada

By Matt Walcoff

Oct. 13 (Bloomberg) — Canadian stocks fell, breaking a two-day winning streak, as oil and metals prices dropped after lower-than-estimated Chinese exports spurred concern about the global economy.

Barrick Gold Corp., the world’s largest gold producer, fell 2 percent as the metal slipped. Suncor Energy Inc., Canada’s largest oil and gas producer, lost 1.6 percent as crude declined for a second day. Royal Bank of Canada, the nation’s biggest lender, lost 2.1 percent after JPMorgan Chase & Co. reported a slump in investment banking and trading.

The Standard & Poor’s/TSX Composite Index dropped 118.07 points, or 1 percent, to 11,911.89. It’s gained or lost at least 100 points on six straight days, the longest streak since October 2009.

“You had some key import/export data out of China that were somewhat discouraging,” Brian Huen, a money manager at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees C$54 million ($53 million). “If the Chinese economy slows down, demand for commodities like copper, oil, zinc and nickel and all the other stuff we export will be impacted.”

The index gained 7.6 percent in the previous five days after closing at a 14-month low on Oct. 4. During the same period, copper advanced 9.3 percent and crude rallied 13 percent as the U.S. dollar declined. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.                       

Chinese exports increased 17 percent in September from last year, and imports climbed 21 percent. Both figures trailed the median estimates of economists in Bloomberg surveys. The U.S.

Dollar Index rebounded from a three-week low. Gold producers in the S&P/TSX dropped for a second day. Barrick declined 2 percent to C$48. Goldcorp Inc., the world’s second-largest producer of the metal by market value, lost 1.5 percent to C$47.90. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, decreased 4.4 percent to C$31.89 as silver retreated 3.4 percent.

Premier Gold Mines Ltd., which explores in Ontario and Nevada, plunged 7.2 percent to C$5.30 after saying it will raise C$30.5 million in an equity offering. Volta Resources Inc., which explores for gold in Africa, surged 15 percent, the most since June 2010, to C$1.32 after reporting drilling results.

Copper fell 2.5 percent after rallying 3.1 percent yesterday. First Quantum Minerals Ltd., the country’s second- largest publicly traded copper producer, declined 4.2 percent to C$16.48 after a 31 percent surge in the previous six days. Teck Resources Ltd., Canada’s largest base-metals and coal producer, dropped 1.6 percent to C$35.44. Quadra FNX Mining Ltd., which operates in the U.S., Canada and Chile, slumped 7.2 percent to C$10.22.

West Fraser Timber Co., Canada’s largest forestry company, rallied 6.2 percent to C$39.28 after Paul Quinn, an analyst at Royal Bank of Canada, raised his rating on the shares to “outperform” from “sector perform.”

Crude futures lost 1.6 percent on the New York Mercantile Exchange. Suncor decreased 1.6 percent to C$29.14. Cenovus Energy Inc., the country’s fifth-largest energy company, retreated 1.6 percent to C$34.26. Athabasca Oil Sands Corp., PetroChina Co.’s partner in oil-sands development, fell 3.8 percent to C$12.12 after jumping 17 percent Oct. 11 and yesterday.                        

 Oil-sands developer Ivanhoe Energy Ltd. soared 24 percent, the most since December 2008, to C$1.45. Hilary McMeekin, a company spokeswoman, said she was unaware of the reason for the jump in a telephone interview.

 All S&P/TSX banks and all S&P/TSX insurance stocks retreated. Royal Bank of Canada lost 2.1 percent to C$47.82. Bank of Nova Scotia decreased 1.9 percent to C$52.18. Manulife Financial Corp., North America’s fourth-largest insurer, fell 3 percent to C$12.46.

Magna International Inc., Canada’s biggest auto-parts maker, dropped 4.6 percent to C$37.18 after saying the U.S.

Justice Department has requested documents from Magna’s Cosma International unit as part of an antitrust investigation of the industry. The company is cooperating with the government, Magna said in a statement.

US

By Rita Nazareth

Oct. 13 (Bloomberg) — U.S. stocks fell, paring gains from the best Standard & Poor’s 500 Index rally over seven days since 2009, amid lower earnings from JPMorgan Chase & Co. and concern equities rose too much on optimism about Europe’s debt crisis.

Stocks trimmed losses as chipmakers in the S&P 500 added 1.9 percent and Yahoo! Inc. rose as much as 3.8 percent after people with knowledge of the matter said KKR & Co. and Blackstone Group LP are among firms considering bids for the company. JPMorgan dropped 4.8 percent after reporting a 33 percent profit decline, excluding a $1.9 billion accounting benefit, as investment banking and trading income slumped.

The S&P 500 retreated 0.3 percent to 1,203.66 at 4 p.m. New York time, paring its loss from 1.4 percent. It had rebounded 9.8 percent from a 13-month low on Oct. 3 through yesterday. The Dow Jones Industrial Average decreased 40.72 points, or 0.4 percent, to 11,478.13 today. The Nasdaq Composite Index climbed 0.6 percent, rallying a fourth straight day.

“It’s hard to find a port in the storm,” Barry James, who helps oversee $2.5 billion as president of James Investment Research in Xenia, Ohio, said in a telephone interview. “The announcement today doesn’t make it any better for the banks. We keep getting this back-and-forth in Europe. We’ve had a nice run in stocks and people are taking a bit off the table.”

The S&P 500 rose 4.5 percent over the previous three days after German Chancellor Angela Merkel said European leaders would do “everything necessary” to ensure banks have adequate capital. The rebound had yet to bring the gauge out of a price range where it’s traded for more than two months. The index has fluctuated between 1,074.77 and 1,230.71 since Aug. 5.                       

Technology shares in the S&P 500 rose 1 percent. At 4:29 p.m., following the close of exchanges, Google Inc. added 5.4 percent and Nasdaq-100 Index futures climbed 1.3 percent after the world’s most-popular search engine beat profit estimates.

Yahoo added 1 percent to $15.93 during the regular trading session. KKR and Blackstone may become part of a consortium that would pool the financing needed for a bid, said the people, who asked not to be identified because the review is preliminary and the firms may decide not to make an offer.

“We’re in a bottoming process,” Bruce McCain, who helps oversee $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a phone interview. “The question becomes: Do I risk sitting on the sidelines as this thing begins to take off on me?”

U.S. equities followed European stocks lower as the European Central Bank said the involvement of the private sector in euro-area bailouts through enforced investor losses is a risk to financial stability and would have “direct negative effects” on the banking sector. Pacific Investment Management Co. Chief Executive Officer Mohamed A. El-Erian said European leaders are beginning to recognize the need for Greek bondholders to take bigger losses than previously agreed.

“There’s no way to sugarcoat this,” Daniel Genter, who oversees about $3.7 billion as president of RNC Genter Capital Management in Los Angeles. “It’s going to take some pretty severe medicine to solve Europe’s debt crisis.”

The KBW Bank Index slumped 2.9 percent. JPMorgan fell 4.8 percent to $31.60 after revenue at its investment-banking unit fell 13 percent from the second quarter as concern that Greece would default and U.S. lawmakers would fail to raise the debt ceiling roiled markets during the third quarter. The firm said the division will face similar market conditions for the rest of the year.                       

Bank of America Corp., the largest U.S. lender by assets, dropped 5.5 percent to $6.22. Citigroup Inc. declined 5.3 percent to $27.64.

The Morgan Stanley Cyclical Index of companies most-tied to the economy declined 0.9 percent. The Dow Jones Transportation Average retreated 0.6 percent. FedEx Corp. lost 1.7 percent to $73.87. General Electric Co. decreased 1.1 percent to $16.22.

The threat of a bear market is receding after the S&P 500 rallied the most in 31 months, leaving the gauge about 1 percent away from a level where two advances have stopped since August.

The measure climbed 1 percent yesterday. Gains were reduced in the last hour of trading yesterday after the S&P 500 climbed past 1,220, just above levels reached on Sept. 16 and Aug. 31 when declines began.

The lowest prices relative to earnings since 2009 and a shortage of better investment options have boosted equities, according to David Spika, who helps oversee $14 billion as an investment strategist at Westwood Holdings Group Inc. in Dallas.

“It wasn’t going to take much good news to drive the market higher,” Spika said yesterday in a telephone interview.

“You had 30-year Treasuries yielding less than 3 percent, 10- year Treasuries yielding less than 2 percent, and stocks trading at 11 times earnings. You have to believe that at some point it’s not going to take much for investors to get back.”

Have a wonderful evening everyone.

Be magnificent!

 

Nations cohere because there is mutual regard among

individuals composing them.

Some day we must extend the national law

to the universe,

even as we have extended the family law

to form nations – a larger family.

 

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Exaggeration is a department of lying.

        -Baltasar Gracian, 1601-1658 

 

 

Tangents:

 

Birthday: Luciano Pavarotti, born October 12^th, 1935.

Milestone: October 12^th, 1999 ~ world population reaches 6 billion.  We’ve now surpassed 7 billion!

 

I want to share with you a wonderful read which I recently came across and thoroughly enjoyed. It is entitled La Seduction (Times Books, Henry Holt & Co. New York, 2011) and it is written by Elaine Sciolino who is a Paris correspondent and former Paris bureau chief for The New York Times. She previously served as the newspaper’s chief diplomatic correspondent and UN bureau chief.  Impressively, in 2010, she was decorated a chevalier of the Legion of Honor.  She still lives in Paris with her husband.  Being an unabashed Francophile, I found her book to be an insightful consideration on the allure of the French way of life. The first chapter opens with a quote by Edith Wharton from French Ways and Their Meaning, “Le plaisir…is something so much more definite and more evocative than what we mean when we speak of pleasure….To the French it is part of the general fearless and joyful contact with life.”

 

She writes in the first chapter about the ritual of the baisemain, a kiss of the hand: 

 

“The first time my hand was kissed à la française was in the Napoléon III salon of the Élysée Palace.  The one doing the kissing was the president of France. 

  In the fall of 2002, Jacques Chirac was seven years into his twelve-year presidency.  The Bush administration was moving toward war with Iraq, and the relationship between France and the United States was worse than it had been in decades…” 

 

The epilogue is the unfolding of a wonderful dinner party and the perceptions of the French guests assembled on La Seduction. 

 

Photos of the day

October 12, 2011

 

Novice monks at the Dechen Phrodrang Buddhist monastery look down from a hilltop in Bhutan’s capital, Thimphu. Adrees Latif/Reuters.

A full moon shines at dusk above the Swayambhu Nath stupa, a world heritage site in Katmandu, Nepal. Laxmi Prasad Ngakhusi/AP.

Market Commentary:

Canada

By Matt Walcoff

Oct. 12 (Bloomberg) — Canadian stocks rose for a second day, led by energy and financial shares, after European Commission President Jose Barroso’s call for a coordinated response to the continent’s debt crisis spurred optimism about the global economy.

Suncor Energy Inc., the nation’s largest oil and gas producer, gained 2.6 percent after the commission released a so- called road map to address Greek debt, European lenders and the economy. Manulife Financial Corp., North America’s fourth- largest insurer, increased 4 percent. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, jumped 6.2 percent as the U.S. dollar dropped against six major counterparts.

The Standard & Poor’s/TSX Composite Index rose 154.41 points, or 1.3 percent, to a three-week high of 12,029.96. The S&P/TSX rebounded 7.6 percent in five days after closing at a 14-month low on Oct. 4 as optimism European officials will aid the continent’s banks led to gains in the euro and a weaker U.S. dollar.

“The global mindset had been very negative, very focused on worst-case scenarios,” David Baskin, president of Baskin Financial Services Inc., said in a telephone interview from Toronto. The firm oversees C$400 million ($393 million). “That doesn’t seem to be happening, so there’s a sigh of relief.”

Crude oil futures surged 13 percent and copper rallied 6 percent from Oct. 4 to yesterday, boosting energy and raw- materials stocks. Companies in those industries make up 47 percent of Canadian stocks by market value, according to Bloomberg data.                        

The euro advanced 1.1 percent against the U.S. dollar today, extending its climb since Oct. 3 to 4.7 percent.

Fifty-nine of 66 S&P/TSX energy companies rose. Suncor increased 2.6 percent to C$29.61. Crescent Point Energy Corp. rallied 4.9 percent to C$41.91 as oil and gas producers with operations in western Canada climbed a day after China Petrochemical Corp. agreed to buy Daylight Energy Ltd. for C$2.2 billion. Athabasca Oil Sands Corp., an oil-sands developer that began trading in April 2010, soared 8.15 percent to C$12.60 after advancing a record 8.17 percent yesterday.

Trican Well Service Ltd., the country’s biggest oilfield- services company, gained 8.8 percent, the most since September 2009, to C$18.56. The shares rallied for a second day after New Orleans-based Superior Energy Services Inc. agreed to buy Houston-based Complete Production Services Inc. for about $2.6 billion in cash and stock.

All S&P/TSX banks and insurers advanced. Manulife climbed 4 percent to C$12.85. Sun Life Financial Inc., Canada’s third- biggest insurance company, climbed 3.7 percent to C$26.45. Royal Bank of Canada, the country’s largest lender by assets, gained 1.8 percent to C$48.83.                     

Copper futures increased 3.1 percent on the Comex in New York as Asian inventories shrank. First Quantum Minerals surged 6.2 percent to C$17.21. Teck Resources Ltd., the country’s biggest base-metals and coal producer, rose 2.1 percent to C$36.03. Quadra FNX Mining Ltd., which operates in the U.S., Canada and Chile, climbed 5 percent to C$11.01.

Extorre Gold Mines Ltd., which explores in Argentina, gained for a second day after reporting high-grade drilling results, advancing 13 percent to C$8.89. The shares jumped 9 percent yesterday.

BlackBerry maker Research In Motion Ltd. retreated 3.5 percent to C$24.27 after service outages spread to North America and South America. Disruptions continued in Europe, the Middle East and Africa for a third day.

The S&P/TSX has increased at least 150 points four of the past five days. That has happened only once before, when the index climbed at least 150 points five times in a six-day period in December 2008 and January 2009.

US

By Rita Nazareth

 Oct. 12 (Bloomberg) — U.S. stocks rose, briefly erasing the Dow Jones Industrial Average’s 2011 loss, as European leaders provided a road map to tame the debt crisis and the Federal Reserve said it discussed further asset purchases.

Financial and industrial shares rose the most among 10 groups in the Standard & Poor’s 500 Index. JPMorgan Chase & Co. and Bank of America Corp. jumped at least 2.7 percent, following a rally in European lenders. General Electric Co. and 3M Co. added more than 1.6 percent to pace gains among companies most- reliant on economic growth. PepsiCo Inc., the largest snack-food maker, increased 2.9 percent as profit beat analysts’ estimates.

The S&P 500 advanced 1 percent to 1,207.25 at 4 p.m. New York time, rallying 4.5 percent in three days. The index rose as much as 2.1 percent earlier before paring gains in the final hour of trading. The Dow climbed 102.55 points, or 0.9 percent, to 11,518.85. The 30-stock gauge is down 0.5 percent for 2011.

“The market doesn’t want to turn back lower,” Liam Dalton, chief executive officer of Axiom Capital Management Inc., in New York, which oversees $1.8 billion, said in a telephone interview. “The process in Europe is likely to be resolved. There are a lot of things that can go right or wrong. Still, we’re building off of what looks like an oversold low.”

The Dow has gained 8.1 percent since reaching this year’s closing low on Oct. 3 amid optimism European leaders will tame the region’s debt crisis and after American economic data improved. Before that, the gauge had slumped as much as 17 percent from this year’s high on April 29 amid concern that Europe’s crisis would slow down the economic recovery.                      

The S&P 500 had the biggest rally over seven days since March 2009, climbing 9.8 percent. The rebound has yet to bring the S&P 500 out of a trading range it’s been stuck in for more than two months. The benchmark index for U.S. stocks has fluctuated between 1,074.77 and 1,230.71 since Aug. 5 as investors remained cautious toward riskier assets amid speculation Greece will default on its debt.

“It feels like Charlie Brown and Lucy every time she put a football in front of him,” James Dunigan, who helps oversee $109 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. Cartoon character Charlie Brown is a perpetual loser in football and other pursuits. “Maybe the worst case scenario is off the table in Europe. Still, the question is — whatever they do, will it be enough? I’m not sure I’m ready to declare victory yet.”               

Global stocks rose today as European Commission President Jose Barroso called for a reinforcement of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to master Europe’s debt woes. Barroso urged a “coordinated approach” to deliver a “significantly higher capital ratio of highest quality capital” for banks, while offering government funds only as a last resort.

Some Federal Reserve officials last month wanted to keep further asset purchases as an option to boost the economy as policy makers saw “considerable uncertainty” that U.S. growth will pick up, the Fed said today in minutes of the Sept. 20-21 session. The debate culminated in the Federal Open Market Committee’s decision to replace $400 billion of Treasuries in the central bank’s portfolio with longer-term debt to reduce borrowing costs.

“We’re believers that we’re probably going to avoid a recession,” Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles & Co. in Boston, which manages $150 billion, said in a telephone interview. “If people come to realize that economic growth isn’t as poor as sentiment or as stock prices have indicated, we probably could create some type of bottom.”

The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 2 percent. The Dow Jones Transportation Average rose 1.3 percent. The KBW Bank Index gained 3.3 percent.

Bank of America added 3.3 percent to $6.58. JPMorgan gained 2.8 percent to $33.20. GE increased 1.6 percent to $16.40. 3M rallied 2.5 percent to $78.36.

PepsiCo jumped 2.9 percent to $62.70 after saying third- quarter profit rose 4.1 percent as sales of Frito-Lay products increased. Chief Executive Officer Indra Nooyi created a council in September to better coordinate sales of snacks and beverages after the company reduced its full-year profit forecast.

“The reason we’re bullish and why we’re having a different view of the market is because we’ve had a lot more faith in the ability of U.S. corporations and the U.S. economy to still navigate through a U.S. expansion, despite what looks like very, very scary headlines,” Thomas Lee, the chief U.S. equity strategist at JPMorgan, said in an interview on Bloomberg Television “In the Loop” with Betty Liu.                    

Liz Claiborne Inc. surged 34 percent, the most since 1987, to $6.84 after agreeing to sell its namesake and Monet brands to J.C. Penney Co. and its Kensie line to Bluestar Alliance as the company works to reduce debt. The transactions and the completion of the sale of Dana Buchman brand to Kohl’s Corp. are worth a total of $328 million in cash.

Alcoa Inc. fell 2.4 percent to $10.05. The first company in the Dow to report earnings this quarter posted profit that trailed estimates, saying European customers “dramatically” cut orders on economic uncertainty. Alcoa is grappling with rising production costs while the price of aluminum on the London Metal Exchange has fallen in the past two months.

Earnings per share for the S&P 500, excluding financial companies, rose 14 percent in the third quarter, according to analysts’ estimates compiled by Bloomberg. Still, it’s the smallest gain since the end of 2009, the data showed.

UBS AG raised its 2011 earnings forecast for companies in the S&P 500, citing stronger-than-forecast U.S. economic data.

Thomas Doerflinger, a New York-based strategist, raised his profit estimate for the benchmark index to $96.64 a share from $95, saying earnings in the second half of the year will reflect higher economic growth expectations after U.S. manufacturing, auto sales, construction and payrolls data beat forecasts.

Have a wonderful evening everyone.

Be magnificent!

Give with faith, and never without faith.

Give with dignity.  Give with humility.  Give with joy.

And give with the understanding of the effects of your gift.

 

Taittiriya Upanishad

 

As ever,

Carolann

Few things are harder to put up with than

the annoyance of a good example.

         -Mark Twain, 1835-1910 

 

Dear Friends,

 

Tangents:

 

Full moon tonight =). 

Just returned from my annual trek to the World Business Forum….more to share with you on that later.

Birthday: Eleanor Roosevelt, writer and first Lady, born October 11^th, 1884.  Among her many words of wisdom, “Do what you feel in your heart to be right – for you’ll be criticized anyway.  You’ll  be damned if you do, and damned if you don’t.”

I was pleased to learn that Swedish poet, Tomas Transtromer won this year’s Nobel prize in literature. 

From “The Great Enigma: New Collected Poems,” translated by Robin Fulton, New Directions Publishing, 2006:

 

National Insecurity

The Under Secretary leans forward

  and draws an X

and her ear-drops dangle

  like swords of Damocles.

As a mottled butterfly is invisible

  against the ground

so the demon merges

  with the opened newspaper.

A helmet worn by no one

  has taken power.

The mother-turtle

  flees flying under the water.

             -Tomas Transtromer

 

Photos of the day

October 11, 2011

A marigold flower is reflected on a dew drop on the leaf of a paddy in Lalitpur, Nepal. Navesh Chitrakar/Reuters.

 Visitors pass huge screens which are part of an exhibition booth of Iceland, the guest of honor at this years’ book fair in Frankfurt. The book fair will be opened later today and runs until Sunday with its focal theme on the literature of Iceland. Kai Pfaffenbach/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Oct. 11 (Bloomberg) — Canadian stocks rose, led by energy companies and banks, in the first day of trading since the leaders of France and Germany said they will have a response to Europe’s bank crisis by the end of the month.

Oil and gas producer Daylight Energy Ltd. soared 110 percent after agreeing to be bought by China Petrochemical Corp.

Royal Bank of Canada, the country’s largest lender by assets, gained 1.4 percent after German Chancellor Angela Merkel said European leaders will do “everything necessary” to ensure banks have adequate capital. Potash Corp. of Saskatchewan Inc. advanced 6.6 percent after Barron’s said agriculture companies may benefit from rising food demand.

The Standard & Poor’s/TSX Composite Index increased 287.19 points, or 2.5 percent, to 11,875.55. Ninety-one percent of S&P/TSX stocks climbed. Canadian markets were closed yesterday for the country’s Thanksgiving holiday.

“The hope is the Europeans are going to get their act together,” David Cockfield, a money manager at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees C$225 million ($219 million). “They seem to be moving toward some kind of accommodation of the Greek problem. That’s encouraged everybody.”

The S&P/TSX dropped 18 percent in the six months ending Oct. 7 as world equities declined on concern the European sovereign debt crisis may threaten banks and the global economy may enter a recession. The MSCI World Index climbed 2.7 percent yesterday, a day after the pledge from Merkel and French President Nicolas Sarkozy.

Energy stocks in the S&P/TSX climbed 3.1 percent as crude oil rose for a fifth day on the New York Mercantile Exchange. Daylight Energy surged 110 percent to C$9.64 after agreeing to a C$10.08-a-share takeover offer from the Chinese state-owned company known as Sinopec Group.

NAL Energy Corp., which, like Daylight Energy, produces natural gas in western Canada, soared 15 percent, the most since October 2008, to C$7.61. Advantage Oil & Gas Ltd., which is developing a natural gas project in Alberta, rallied 8.5 percent, the most since July 2009, to C$4.49. Athabasca Oil Sands Corp., PetroChina Co.’s parter in oil-sands development, advanced 8.2 percent, the most since its April 2010 initial public offering, to C$11.65.

Trican Well Service Ltd., the country’s biggest oilfield- services company, increased 7.1 percent to C$17.06 after New Orleans-based Superior Energy Services Inc. agreed to buy Houston-based Complete Production Services Inc. for about $2.6 billion in cash and stock.                         

Among other energy companies, Suncor Energy Inc., Canada’s largest oil and gas producer, gained 2.8 percent to C$28.85. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, advanced 3.3 percent to C$31.21.

PetroFrontier Corp., which explores for oil in Australia, plunged 25 percent to C$1.68 after reporting drilling delays due to an “unexpected fault.” The shares tumbled the most since they began trading in July 2010.

All S&P/TSX banks and seven of eight insurance stocks rose. Royal Bank gained 1.4 percent to C$47.95. Bank of Nova Scotia, Canada’s third-largest lender by assets, advanced 1.8 percent to C$52.72. Manulife Financial Corp., North America’s fourth- biggest insurer, increased 4 percent to C$12.36.

 Potash Corp. and Agrium Inc. advanced after Barron’s said they may be undervalued. Lars Kjellberg, an analyst at Credit Suisse Group AG, told clients in a note that shares of industry companies “look highly compelling.”                      

Potash Corp., the world’s largest fertilizer producer by market value, increased 6.6 percent to C$49.44. Agrium Inc., a fertilizer producer and farm retailer, climbed 5.7 percent, the most in a year, to C$75.19.

Other raw-materials producers rose a day after the U.S. Dollar Index, which measures the currency against six major peers, lost 1.6 percent, the most since May 2009. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, gained 4.9 percent to C$35.29. Barrick Gold Corp., the world’s largest gold producer, advanced 1.8 percent to C$49.32 as the metal touched a two-week high.

Gold company Banro Corp. surged 9.4 percent to C$4.54 after saying production has begun at its Twangiza mine in the Democratic Republic of Congo.

B2Gold Corp., which explores in Latin America, decreased 5.2 percent to C$3.30 after saying it will buy Auryx Gold Corp., the operator of a mine in Namibia. The companies valued the cash-and-stock offer at about C$160 million.

Exploration Orbite VSPA Inc., which is developing an alumina project in Quebec and extraction technology, climbed 21 percent to C$2.43 after saying it has increased production.

Power producer Western Wind Energy Corp. jumped 58 percent, the most in 10 years, to C$2.10 after saying it received an unsolicited takeover offer of C$2.50 a share from Algonquin Power & Utilities Corp. Western Wind called the bid “extremely low-ball” in a statement.

US

By Rita Nazareth

     Oct. 11 (Bloomberg) — Most U.S. stocks advanced, following the biggest rally since August for the Standard & Poor’s 500 Index, as optimism about third-quarter corporate earnings overshadowed concern about Europe’s debt crisis.

Alcoa Inc., the biggest U.S. aluminum producer, gained 2.6 percent ahead of its results. Apple Inc., Bank of America Corp. and Caterpillar Inc. added at least 2 percent to pace gains among companies most-tied to the economy. Mosaic Co. jumped 4.4 percent as Credit Suisse Group AG said valuations for fertilizer shares are attractive. AMR Corp. rose 6.7 percent as American Airlines joined its bigger U.S. peers with deeper seating cuts.

About seven stocks rose for every five that fell on U.S. exchanges at 3:46 p.m. New York time. The S&P 500 rose 0.1 percent to 1,196.40. The Dow Jones Industrial Average lost 17.41 points, or 0.2 percent, to 11,415.77.

“The markets have shrugged off some of the pessimism,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview. “There’s a bit of catch-up going on. We’re seeing a recovery in groups that have really taken it on the chin. Beginning with Alcoa today, only time will tell if earnings won’t be quite as bad as we all feared.”

The S&P 500 last week rose from the threshold of a bear market on optimism Europe will tame its debt crisis. The measure was up 5.6 percent this month through yesterday as gains were led by commodity, consumer discretionary, industrial and technology companies. Before October, the index had fallen for five straight months.                       

Earnings per share for the S&P 500, excluding financial companies, rose 14 percent in the third quarter, according to analysts’ estimates compiled by Bloomberg. Still, it’s the smallest gain since the end of 2009, the data showed.

Alcoa is the first company of the Dow to report results for the third quarter. The largest U.S. aluminum producer may report a slowdown in its earnings recovery after the lightweight metal used in beverage cans and aircraft erased all this year’s price gains. The European debt crisis and doubts about global economic growth have reduced aluminum demand growth and suppressed prices, Lloyd O’Carroll, an analyst at Davenport & Co. in Richmond, Virginia, said in a Sept. 21 note.

Alcoa climbed 2.6 percent to $10.35 today. The shares lost 34 percent in 2011 through yesterday, the worst performer in the Dow after Bank of America Corp. and Hewlett-Packard Co.

Stocks fell earlier after European Central Bank President Jean-Claude Trichet said the debt crisis threatens the financial system. “Sovereign stress has moved from smaller economies to some of the larger countries,” Trichet told European lawmakers in Brussels today. “The crisis is systemic and must be tackled decisively.”                         

The message comes as Slovakian lawmakers were preparing to vote on the euro region’s retooled bailout fund. Slovak Finance Minister Ivan Miklos said lawmakers should back the European Financial Stability Facility, the euro region’s enhanced bailout fund, this week. Slovakia is the only country in the euro area that hasn’t ratified the measure.

European Union and International Monetary Fund officials indicated Greece will get an 8 billion-euro ($11 billion) loan next month under a 110 billion-euro bailout. The team of officials from the EU, IMF and ECB said Greece has made “important progress” in fiscal consolidation, according to an e-mailed statement today upon completion of a review in Athens.

Have a wonderful evening everyone.

Be magnificent!

 

Whenever I see an erring man, I say to myself, I have also erred;

when I see a lustful man I say to myself, so was I once;

and in this way I feel kinship with everyone in the world

and feel that I cannot be happy without the humblest of us being happy.

 -Mahatma Gandhi, 1869-1948

 

As ever,

Carolann

A fanatic is one who can’t change his mind

and won’t change the subject.

          -Winston Churchill, 1874-1965

 

 

Dear Friends,

 

Tangents:

 

“…Thanksgiving like contentment is a learned attribute. The person who hasn’t learned to be content will not be thankful, for he lives with the delusion he deserves more or something better…” – Robert Flatt

 

 Photo of the Weekend:

President Obama, center, with daughters Malia, far right, Sasha, second from the right, pardoning the National Thanksgiving Turkey, Courage, in a ceremony at the White House with the chairman of the National Turkey Federation, in 2009. (AP Photo by Pablo Martinez Monsivais)  October 7^th, 2011

Market Commentary:

Canada

By Matt Walcoff

Oct. 7 (Bloomberg) — Canadian stocks fell, wiping out the week’s gain, as raw-materials and energy shares dropped after Fitch Ratings downgraded the government debt of Spain and Italy.

Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, declined 4 percent as natural gas futures retreated. Goldcorp Inc., the world’s second-biggest gold producer by market value, lost 2.3 percent as precious metals slipped. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 4.1 percent after a Citigroup Inc. analyst said U.S. ethanol legislation may weaken grain prices.

The Standard & Poor’s/TSX Composite Index fell 191.71 points, or 1.6 percent, to 11,588.36 at the close in Toronto for a weekly retreat of 0.3 percent. “In the last few days, the markets had a bit of an upside, but the cloud on Europe continues to be there,” Sadiq S. Adatia, chief investment officer at Sun Life Financial Inc.’s Sun Life Global Investments unit, said in a telephone interview. The unit oversees C$3.2 billion ($3.1 billion) for clients. “I don’t think anyone is holding stocks for the long term. They’re all worried about what’s going on in the economy.”

The index jumped 5.4 percent during the previous two days, the most in a similar period since May 2009. Stocks rose from a 14-month low after the Institute for Supply Management’s monthly index of the U.S. service industry fell less than most economists in a Bloomberg survey had forecast and investors speculated European officials will reach an agreement to aid the continent’s banks.

Debt Downgrades

Fitch reduced its ratings on Spain to AA- from AA+ and cut Italy to A+ from AA-. The agency cited the vulnerability of the countries to the European debt crisis. The S&P/TSX Energy Index retreated for the first time in four days as natural gas dropped to an 11-month low on speculation U.S. inventories will approach a record.

Canadian Natural declined 4 percent to C$30.20. Encana Corp., the country’s largest natural gas producer, lost 4.6 percent to C$19.71. Oil-sands developer MEG Energy Corp. decreased 6.6 percent to C$37.74 after jumping 16 percent in the previous two days.

Gold and silver retreated as investors sold precious metals to cover losses in other assets, Adatia said. Goldcorp dropped 2.3 percent to C$48.12. Barrick Gold Corp., the world’s largest producer of the metal, lost 2.1 percent to C$48.44. San Gold Corp., which mines in Manitoba, slumped 8.6 percent to C$2.12 after reporting third-quarter production that trailed the estimate of Andrew Kaip, an analyst at Bank of Montreal.

‘Clear Negative’

Fertilizer producers fell after David Driscoll, an analyst at Citigroup, said bills in Congress to reduce ethanol requirements for gasoline represent “a continued assault on the ethanol industry and a clear negative.” Corn futures also fell on forecasts for warm, dry weather in the U.S. Midwest.

Potash Corp. declined 4.1 percent to C$46.40 after surging 11 percent in the previous two days. Agrium Inc., a fertilizer producer and farm retailer, lost 3.5 percent to C$71.16. A gauge of base-metals and coal producers in the S&P/TSX retreated 4.6 percent after soaring 24 percent, the most since January 2009, in the previous three days. Teck Resources Ltd., Canada’s largest company in the industry, decreased 4.7 percent to C$33.65. Inmet Mining Corp., a copper and zinc producer, dropped 6.5 percent to C$49.21. Uranium One Inc., a mining company controlled by Moscow-based ARMZ Uranium Holding, lost 6.6 percent to C$2.11.

Financials Retreat

The S&P/TSX Financials Index declined. Royal Bank of Canada, the country’s largest lender by assets, slipped 1.4 percent to C$47.30. Bank of Nova Scotia, the country’s third- biggest bank, fell 1.4 percent to C$51.78. Manulife Financial Corp., North America’s fourth-biggest insurer, retreated 2.9 percent to C$11.88.

BlackBerry maker Research In Motion Ltd. dropped 4.3 percent to C$24.30 after soaring 19 percent from a seven-year low in the previous four days. Microsoft Corp. is unlikely to buy RIM, as Microsoft is reluctant to acquire a hardware business and RIM’s chiefs would oppose a deal, Pierre Ferragu, an analyst at Sanford C. Bernstein & Co., said in a note to clients.

US

By Rita Nazareth and Cordell Eddings

Oct. 7 (Bloomberg) — U.S. stocks fell, halting a three-day rally, and the euro reversed earlier gains versus the dollar after Fitch Ratings cut debt ratings on Spain and Italy. Treasuries slid, sending the 30-year yield above 3 percent.

The Standard & Poor’s 500 Index slipped 0.8 percent to close at 1,155.46 after rebounding more than 8 percent from a one-year intraday low on Oct. 4. The euro lost 0.4 percent to $1.3388, erasing a gain of as much as 0.7 percent. Ten-year Treasury note yields rose nine basis points to 2.08 percent and climbed 16 points in five days, its biggest weekly increase since July. Oil capped its largest weekly gain in seven months.

Early gains in U.S. equities faded today as faster- than- forecast growth in jobs was overshadowed by concern Europe’s debt crisis will worsen. Italy had its foreign and local currency long-term issuer default ratings cut to ‘A+’ from ’AA- ,’ while Spain had the same set of ratings cut to ‘AA-’ from ‘AA+.’ The outlook for both is negative.

“We’re still going to get a bad event in Europe,” Michael Strauss, who helps oversee about $27 billion as chief investment strategist at Commonfund in Wilton, Connecticut, said in a telephone interview. “What took the wind out of the stock market was the variety of downgrades.” The jobs data showed “it’s not an economic recession, but it’s slow growth.”

Stocks started the session higher after government data showed payrolls climbed by 103,000 workers, topping the median forecast in a Bloomberg News survey of economists for a rise of 60,000. The data followed reports earlier this week showing faster-than-estimated growth in manufacturing, construction and service industries and improving retail sales.

Swinging Between Gains, Losses

The S&P 500 then turned lower before staging a rally late in the day, reversing its loss and climbing as much as 0.4 percent, before finally giving up gains and closing lower.

Losses were led by smaller U.S. companies and banks, with the Russell 2000 Index slumping 2.6 percent today after surging 11 percent in the previous three sessions for the its strongest rally in more than two years.

The S&P 500 Financials Index lost 3.7 percent after climbing 8.8 percent over the previous three days. The group of banks, insurers and investment firms is up 4.8 percent after sinking to a two-year low on Oct. 3.

Bank of America Corp., JPMorgan Chase & Co., Travelers Cos. and American Express Co. lost more than 2.2 percent for the biggest declines in the Dow Jones Industrial Average, which slipped 0.2 percent to 11,103.12. Sprint Nextel Corp. tumbled 20 percent, the biggest loss in the S&P 500, after saying it needs to raise additional capital as it spends on a network upgrade and new handsets.

Rebound

The S&P 500 ended the session up about 7.5 percent from a one-year intraday low on Oct. 4 and capped a 2 percent weekly gain. The benchmark index sank 14 percent in the third quarter and this week came within 1 percent of extending its decline from its April peak to 20 percent on a closing basis, the common definition of a bear market. The slump pushed the index to 12 times reported earnings, the cheapest valuation level since 2009, according to data compiled by Bloomberg.

Alcoa Inc., the largest U.S. aluminum producer, will mark the unofficial start of the earnings-reporting season when it reports results on Oct. 11. Third-quarter profits for S&P 500 companies are projected to have grown 12 percent, according to analyst forecast compiled by Bloomberg, down from an estimate of

17 percent when the index traded at a three-year high at the end of April.

Jobs Revision

The government jobs data also showed hours and earnings both increased and revisions to previous reports added a total of 99,000 jobs to payrolls in July and August after last month’s jobs report showed no gain in non-farm payrolls for August. “This is yet another data point suggesting that the U.S. is not moving toward recession any time soon,” Richard Skaggs, senior equity strategist at Loomis Sayles & Co. in Boston, which manages more than $150 billion, said in a telephone interview. The revisions to prior months “were significant,” he said. “Last month, the unchanged number really sent stocks for a loop.”

The rate by which data on the economy has been trailing forecasts has been decreasing since June, according to the Citigroup Economic Surprise Index. The U.S. gauge, which fell below zero on April 29 as the S&P 500 was peaking, has climbed from a low of minus-117.2 on June 3 to minus-7.5.

The 30-year Treasury bond’s yield climbed six basis points to 3.01 percent increased 10 points this week, the biggest increase since August. Two-year yields climbed three basis points to 0.29 percent, up five points on the week.

‘Positive Surprise’

“We saw a positive surprise in payrolls and the market has to respect that and push yields higher on the optimism, but no one is too excited about the data given the uncertainty in Europe,” said Suvrat Prakash, an interest-rate strategist in New York at BNP Paribas SA, one of the 20 primary dealers obliged to participate in U.S. debt offerings. “The uncertainty isn’t going away anytime soon.”

The Stoxx Europe 600 Index rose 0.8 percent to extend its weekly gain to 2.6 percent. Gauges of energy producers and auto companies climbed more than 1.7 percent to lead gains among 19 industries.

European markets closed before Fitch downgraded Italy and Spain.

The yield on 10-year Italian bonds rose seven basis points to 5.49 percent. The nation said it plans to sell securities maturing between 2016 and 2025 on Oct. 13. Spanish yields fell two points to 4.95 percent.

Greece Talks

German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Berlin on Oct. 9 to discuss Greece’s debt problems as the nation edges closer to default. It will be their eighth one-on-one summit in 20 months.

The MSCI Emerging Markets Index climbed 2.1 percent, extending its rebound from a two-year low on Oct. 4 to 6.1 percent. The BSE India Sensitive Index, or Sensex, added 2.8 percent after Citigroup raised its rating on the nation to “neutral.” The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong advanced 3.7 percent. Benchmark indexes gained more than 2.5 percent in Russia and South Korea.

Crude oil for November delivery rose 39 cents to settle at $82.98 a barrel on the New York Mercantile Exchange and rallied 4.8 percent this week, the most since March.

Among commodities tracked by the S&P GSCI Index, zinc and sugar rose more than 2 percent to lead gains and coffee and natural gas dropped more than 3 percent for the biggest losses.

Have a wonderful Thanksgiving long weekend everyone!

 

As Always,

 

Kyle,

 

For Carolann.

 

Dear Friends,

 

 

 

Tangents:

 

 

R.I.P. Steve Jobs

 

     1955-2011

 

 

Apple co-founder Steve Jobs, who changed the daily habits of millions by reinventing computing, music and mobile phones, died on Wednesday at the age of 56.

Apple loses a visionary leader who inspired personal computing and iconic products such as the iPod, iPhone and iPad, which made Jobs one of the most significant industry leaders of his generation.

His death after a long battle with pancreatic cancer sparked an outpouring of tributes as world leaders, business rivals and fans alike lamented his premature passing and celebrated his monumental achievements. (Reuters)

 

 

 

Photo of the Day:

 

October 6^th, 2011

Nineteen-year-old Jonathan Mak, a student at Hong Kong’s Polytechnic University School of Design, came up with the idea of incorporating Steve Jobs’ silhouette into the bite of the Apple logo, symbolizing both Jobs’ departure and lingering presence at the core of the company.

Market Commentary:

Canada

By Chris Fournier

Oct. 6 (Bloomberg) — Canada’s dollar fell versus a majority of its major peers before domestic and U.S. jobs data that may show the North American economy is faltering.

The loonie, as the Canadian currency it’s nicknamed, touched the lowest level in more than a year against its U.S.

counterpart this week on concern a slowing American economy will crimp the nation’s exports of raw materials. The currency underperformed its commodity-linked peers of Australia and New Zealand, which rallied along with stocks.

“Investors are very cautious ahead of dual payroll numbers and expectations are sliding lower for both reports,” said Blake Jespersen, director of foreign exchange in Toronto at Bank of Montreal, by e-mail. “I don’t think the Canadian dollar selling is overdone. I think it will slide lower.”

The Canadian currency was little changed at $1.0391 per U.S. dollar at 3:09 p.m. in Toronto, compared with C$1.0402 yesterday. It touched C$1.0658 on Oct. 4, the weakest level since August 2010. One Canadian dollar buys 96.25 U.S. cents.

BMO’s Jespersen predicted the currency would hit a floor at around C$1.12. Canadian employers added 15,000 jobs in September after cutting 5,500 positions in August, according to the median of 25 estimates compiled by Bloomberg. That would mean employers added 16,500 jobs in the third quarter, compared with 109,000 in the second quarter and 82,800 in the first three months of the year. Statistics Canada is due to report the employment data tomorrow at 7 a.m. in Ottawa.

Jobs

U.S. businesses added 90,000 workers to payrolls in September, according to the median forecast of economists surveyed by Bloomberg. The unemployment rate was 9.1 percent for a third consecutive month, the survey showed.

The loonie fell today against its commodity-linked peers as investors sold the loonie to buy the dollars of Australia and New Zealand amid gains in stocks and oil.

“Canada is the low-beta currency within the commodity block so as risk appetite emerges, investors tend to go long the higher-beta currencies and sometimes fund it out of the lower- beta currencies,” said Paresh Upadhyaya, head of Americas G-10 currency strategy at Bank of America Corp. in New York, in a telephone interview today. Beta refers to a currency’s sensitivity to changes in another variable. The currency extended losses after the European Central Bank failed to cut borrowing costs and domestic building permits unexpectedly fell.

‘Massive Threat’

“The underlying sentiment is: global economy slowing, central banks struggling to find further measures to ease and the global financial system is a massive threat to the global economy and nobody has done anything to stabilize it,” said Kit Juckes, head of foreign-exchange research in London at Societe Generale SA, by phone from London.

European Central Bank officials left their benchmark rate at 1.5 percent, as predicted by 41 of 52 economists in a Bloomberg News survey. ECB President Jean-Claude Trichet said the region’s economy is facing “intensified downside risks,” and said the central bank will resume covered-bond purchases and reintroduce year-long loans for banks as the sovereign debt crisis threatens to freeze money markets.

Government bonds fell, pushing the 10-year yield seven basis points higher to 2.21 percent. The yield touched a record low 1.994 percent on Oct. 4.

‘Wouldn’t Buy

Canadian building permits fell for a second consecutive month in August. The value of municipal permits fell 10.4 percent to a seasonally adjusted C$5.9 billion ($5.7 billion), following a revised 0.4 percent decline in July, Statistics Canada said today in Ottawa. The drop was larger than any of the

12 responses to a Bloomberg survey of economists, which had a median forecast for a 0.3 percent advance.

“I wouldn’t buy the Canadian dollar” at these levels, Societe Generale’s Juckes said. “You wouldn’t want to own the Canadian dollar until you had some comfort that the global risk environment was improving or the global economy wasn’t getting worse.”

US

By Michael P. Regan and Rita Nazareth

Oct. 6 (Bloomberg) — U.S. stocks rallied for a third day, commodities gained and Treasuries slid as European officials detailed plans to tame the sovereign debt crisis and reports on retail sales and jobless claims bolstered optimism in the economy. The euro erased an earlier drop versus the dollar.

The Standard & Poor’s 500 Index gained 1.8 percent to 1,164.94 according to preliminary closing figures at 4 p.m. New York. The Russell 2000 Index extended its three-day advance to 11 percent, its biggest since March 2009. The Stoxx Europe 600 Index surged 2.7 percent. Ten-year Treasury yields increased 10 basis points to 1.99 percent. The euro strengthened 0.7 percent to $1.3442 after losing as much as 0.8 percent. The S&P GSCI Index of commodities jumped 2.5 percent as oil increased 3.7 percent to $82.59 a barrel.

American equities extended a global rally after European Central Bank President Jean-Claude Trichet said the ECB will resume covered-bond purchases and reintroduce yearlong loans for banks, while defying calls for an interest-rate cut and acknowledging “downside risks” to the economy have intensified. The European Commission is pushing for a coordinated capital injection for banks to shield them from the fallout of a potential Greek default.

“People have priced in a Lehman II type of situation,” Brian Barish, Denver-based president of Cambiar Investors LLC, which oversees about $8 billion, said in a telephone interview. “You start to hear some credible stuff on European bank recapitalization. They will do what they’ve got to do to prevent a Lehman from happening. There’s a good chance we might had a bottom in stocks.”

Covered Bonds

The 2.5 trillion-euro market for covered bonds — assets backed by mortgages or public-sector loans — underpins much of Europe’s real estate lending, which almost ground to a halt in the wake of Lehman Brothers Holdings Inc.’s collapse in September 2008.

U.S. stocks also climbed after claims for unemployment benefits rose less than forecast last week to a level that shows the pace of dismissals may be slowing. Applications for jobless benefits rose by 6,000 to 401,000, Labor Department figures showed. Economists projected 410,000 claims, according to the median estimate in a Bloomberg News survey. The monthly average dropped to the lowest level since the end of August. Government data tomorrow is forecast to show employers added 55,000 jobs last month and the unemployment rate held at 9.1 percent, according to the median estimates of economists.

Bear Market Averted

The S&P 500 has rebounded 6 percent since Oct. 3, when it closed within 1 percent of a level that would have marked a bear-market plunge of 20 percent from its April peak. The S&P GSCI Index of commodities is up more than 5 percent in two days, trimming its drop from this year’s high to 20 percent. Treasury yields have increased after demand for safer assets dragged the 10-year note’s rate to a record low of 1.67 percent on Sept. 23.

The Dollar Index has slipped about 1.3 percent since Oct. 4, when it reached the highest level since January.

Financial, commodity and consumer companies helped lead gains in the S&P 500 today. Bank of America Corp. and Alcoa Inc. were among the top gains in the Dow Jones Industrial Average.

Target Corp., Limited Brands Inc. and Saks Inc. climbed after reporting September sales that surpassed analysts’

projections. Apple Inc. shares swung between gains and losses during the day after co-founder Steve Jobs died.

The cost to protect the debt of Morgan Stanley and Citigroup Inc. declined amid growing speculation Europe’s leaders will be able to prevent the debt crisis from infecting bank balance sheets.

Bank CDS Tightens

Credit-default swaps on Morgan Stanley, the owner of the world’s biggest retail brokerage, fell 40 basis points to 490 and those on Citigroup slid by 34 basis points to 311, the biggest one-day decline since May 2009, according to data provider CMA. Swaps on Goldman Sachs Group Inc. eased 16 basis points to 380, the data show.

Wall Street strategists say the S&P 500 will post the biggest fourth-quarter rally in 13 years even after they cut forecasts at a rate exceeded only during the credit crisis.

The benchmark index for U.S. stocks will climb 14 percent from yesterday to end 2011 at 1,300, according to the average estimate of 12 strategists surveyed by Bloomberg. The last time they were this bullish in October was 2008, when the group predicted a 27 percent gain and the index lost 18 percent.

Trading Range

Excluding its dip to a 13-month closing low of 1,099.23 on Oct. 3, the S&P 500 has mostly traded between about 1,120 and 1,220 for the past two months. Following 14 periods since 1990 when the index was stuck in a range, more than 75 percent resulted in gains in the next one, three and six months, according to Birinyi Associates Inc., the Westport, Connecticut- based money management and research firm. The average trading range studied lasted about seven months, with the shortest beginning in March 1998 and lasting three months, Birinyi data show.

“We’ll need clear economic data or policy movements out of Europe to break out of that range,” Wasif Latif, vice president of equity investments at USAA Investment Management Co. in San Antonio, which oversees about $50 billion, said in a telephone interview.

Earnings Season

Alcoa Inc., the largest U.S. aluminum producer, will mark the unofficial start of the earnings-reporting season when it reports results on Oct. 11. Third-quarter profits for S&P 500 companies are projected to have grown 13 percent, according to analyst forecast compiled by Bloomberg, down from an estimate of 17 percent when the index traded at a three-year high at the end of April.

Among European stocks, BNP Paribas SA, Credit Agricole SA and Natixis surged at least 5.3 percent after Le Figaro said the French government is working on a contingency plan to take stakes in the country’s lenders. BHP Billiton Ltd., the world’s biggest mining company, rallied 5.9 percent as metal prices increased. SABMiller Plc surged 7 percent after a report by Brazilian news website IG said the brewer is in talks to be bought by Anheuser-Busch InBev NV. Spokespeople for both companies declined to comment.

Ten-year Spanish and Italian bond yields decreased seven basis points each, while rates on U.K., French and German debt rose at least four points. The dollar weakened against 14 of 16 major peers today, with the Brazilian real surging 2.7 percent to lead gains after higher-than-forecast inflation spurred bets the central bank may slow the pace of interest-rate cuts.

Copper futures climbed 4.5 percent to $3.2465 a pound in New York and rallied 5.9 percent in London to lead gains in 19 of 24 commodities tracked by the S&P GSCI Index. The MSCI Emerging Markets Index of stocks surged 3.8 percent, extending its rebound from a two-year low on Oct. 4. Benchmark indexes in South Korea, Brazil and Chile climbed at least 2.6 percent.

Be Magnificent!

 

 

Have a Wonderful Evening Everyone!

As Always,

 

Kyle,

 

For Carolann.