October 11, 2011 Newsletter
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 11th, 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