February 10, 2012 Newsletter

Dear Friends,

Tangents:

I love the feedback I get from all of you.  After I mentioned the new Leonard Cohen CD in my newsletter last night, one of my clients sent this to me:

Carolann –

This is a stream of Leonard Cohen’s new album – maybe pass along – pretty cool…

http://www.guardian.co.uk/music/musicblog/2012/jan/23/leonard-cohen-old-ideas-stream?INTCMP=ILCNETTXT3487

photos of the day

February 10, 2012

Marco Pichlmayer of Austria soars through the air during official training ahead of the Nordic Combined World Cup in Almaty, Kazakhstan.

Shamil Zhumatov/Reuters

Devotees walk around candles stuck to jars of honey, forming a Holy Cross shape, during mass for the ‘sanctification of honey’ at the Presentation of the Blessed Virgin church in the town of Blagoevgrad, Bulgaria. Honey and beehives are sanctified by performing a ritual for health and rich harvest, marking the day of St. Haralampus, Orthodox patron saint of bee-keepers.

Valentina Petrova/AP

Market Closes for February 10, 2012:

North American Markets

Market Commentary:

Canada

By Katia Porzecanski

Feb. 10 (Bloomberg) — Canadian stocks fell, completing the first weekly decline this year, as oil and metals slumped on concern that plans to help Greece avoid default were unraveling.

Suncor Energy Inc., Canada’s largest oil and gas producer, fell 2.1 percent as oil dropped from a three-week high. Teck Resources Ltd., Canada’s largest base-metals and coal company, sank 1.4 percent and Barrick Gold Corp., the world’s largest gold producer, lost 1.3 percent as the U.S. dollar strengthened, curbing demand for commodities. Manulife Financial Corp., the country’s biggest insurer, fell 1.1 percent after an analyst recommended selling the shares.

The Standard & Poor’s/TSX Composite Index lost 108.52 points, or 0.9 percent, to 12,389.42 in Toronto, for its first weekly decline since Dec. 16 with a loss of 1.5 percent.

“The fear of the market is that this is the first time you’ve heard something about a strong pushback from the Greek side,” Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview.

The firm oversees about C$1.7 billion ($1.7 billion). “The market seems to worry that this could be the start of a whole bunch of negative news coming out.’

Canadian raw materials and energy companies fell earlier this week as China said industrial production growth is likely to slow this quarter and the U.S reported a bigger-than-forecast increase in gasoline supplies. The index had capped its longest streak of weekly gains since April 2009 on Feb. 3, as falling U.S. unemployment signaled Canada’s biggest trade partner was weathering the European debt crisis.

Global equities fell today as emergency talks of euro-area finance chiefs broke up with Luxembourg Prime Minister Jean- Claude Juncker saying Greece must turn its budget cuts into law, flesh out 325 million euros in spending reductions and get the endorsement of major party leaders. George Karatzaferis, the leader of one of the three parties backing interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures.

Mining companies fell as gold and copper retreated. Copper shipments to China fell for the first time in eight months in January, while inventories monitored by the Shanghai Futures Exchange advanced to a record after rising for a ninth straight week.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, declined 2.5 percent to C$21.28. Romarco Minerals Inc., which is developing a gold project in South Carolina, lost 2.6 percent to C$1.14. Barrick fell 1.3 percent to C$48.25. Teck Resources fell 1.4 percent to C$40.24.

Copper and zinc producer Inmet Mining Corp. fell 2.5 percent to C$68.02 after reporting earnings that missed analysts’ estimates.

Energy companies sank for a fifth day, the longest losing streak since Nov. 25, as oil dropped from a three-week high on concern that the European debt crisis will reduce fuel demand.

Suncor lost 2.1 percent to C$33.87. Petrobank Energy and Resources Ltd., the majority owner of PetroBakken Energy Ltd., fell 3.5 percent to C$14.74. Canadian Oil Sands Ltd., the largest partner in Syncrude Canada Ltd., dropped 2.7 percent to C$22.

Manulife lost 1.1 percent to C$11.75. Ohad Lederer, an analyst at Veritas Investment Research, cut the shares to ‘‘sell” from “buy.”

SNC-Lavalin Group Inc., Canada’s largest construction and engineering company, sank 5 percent to C$50.90 after the departure of two executives who were linked in a report in the Globe & Mail to the family of deposed Libyan dictator Muammar Qaddafi.

Fibrek Inc. surged 17 percent to C$1.32 after Mercer International Inc. agreed to purchase the pulp maker for C$1.30 in a board-supported takeover bid.

Thomson Reuters Corp. fell 2.6 percent to C$26.66. The provider of news and information services was lowered to “buy” from “action list buy” by Vince Valentini, an equity analyst at TD Newcrest Inc., with a 12-month price target of C$33.

Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.

US

By Rita Nazareth

Feb. 10 (Bloomberg) — U.S. stocks fell, snapping a five- week-rally for the Standard & Poor’s 500 Index, on concern that plans to help Greece avoid default were unraveling and as confidence among American consumers dropped more than forecast.

Citigroup Inc. and Bank of America Corp. retreated more than 1.3 percent to pace declines among financial companies.

Commodity producers slumped as Freeport-McMoRan Copper & Gold Inc., Alcoa Inc. and Halliburton Co. decreased at least 1.9 percent. First Solar Inc., the biggest maker of thin-film solar panels, tumbled 10 percent after permitting issues delayed a U.S. loan guarantee for a power plant in California.

The S&P 500 declined 0.7 percent to 1,342.64 as of 4 p.m.

New York time, the most since Dec. 28. The benchmark gauge has fallen 0.2 percent since Feb. 3, snapping the longest weekly rally since January 2011. The Dow Jones Industrial Average decreased 89.23 points, or 0.7 percent, to 12,801.23 today.

“We’ve had a flip-flop that triggered global selling,” Frederic Dickson, who helps oversee $28 billion as chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, said in a telephone interview. “Investors are responding to the sudden change in direction or the lack of resolution of the Greek/European problem that they felt was resolved.”

Global equities tumbled after George Karatzaferis, who heads one of the three parties supporting interim Prime Minister Lucas Papademos, said he wouldn’t support austerity measures worked out for a rescue. He spoke hours after German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece was missing deficit targets. S&P downgraded 34 Italian banks after reducing the nation’s grade last month.

Stocks extended losses as the Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to 72.5 from 75 in January. The median estimate in a Bloomberg News survey called for 74.8. The gauge averaged 89 in the five years leading to the 18-month recession that ended in June 2009.

Today’s slump followed a three-day rally that yesterday put the S&P 500 less than 1 percent away from its peak nine months ago of 1,363.61, which was the highest level since June 2008.

The benchmark gauge is up 6.8 percent this year as companies reported earnings that beat analysts’ estimates while better- than-expected data on manufacturing and employment bolstered optimism about the world’s largest economy.

The Morgan Stanley Cyclical Index dropped 1.2 percent amid concern about global economic growth. The Dow Jones Transportation Average lost 1 percent. All 10 groups in the S&P 500 fell as commodity, financial and industrial shares had the biggest declines.

The KBW Bank Index slid 1.3 percent as all of its 24 stocks retreated. Citigroup sank 2.2 percent to $32.93. Bank of America lost 1.3 percent to $8.07.

Concern that Europe’s debt crisis may curb global economic growth also drove energy and raw material producers lower.

Copper shipments to China fell in January, the first drop in eight months, while inventories monitored by the Shanghai Futures Exchange advanced for the ninth straight week to a record.

Freeport-McMoRan, the world’s largest publicly traded copper producer, sank 3.2 percent to $44.94. Alcoa erased 3.3 percent to $10.29. Halliburton fell 1.9 percent to $36.06.

First Solar tumbled 10 percent, the most in the S&P 500, to $43.91. Exelon Corp. purchased the 230-megawatt Antelope Valley Solar Ranch One for $75 million in September, and the Tempe, Arizona-based solar company will have to buy it back if the project cannot win final construction permits and qualify for the $646 million U.S. Energy Department loan guarantee, First Solar said yesterday in a regulatory filing.

“First Solar will not be able to recognize revenues from AVSR construction unless a sale is completed and funded,” Dan Ries, an analyst at Collins Stewart, said today in a note to clients. He reduced his rating to “neutral” from “buy.”

Apollo Global Management LLC dropped 6.1 percent to $14.40.

The private equity firm that went public last year said fourth- quarter profit fell 66 percent as market swings hurt its private equity holdings.

NYSE Euronext rose 4.5 percent, the biggest gain in the S&P 500, to $28.94. Excluding some items, fourth-quarter earnings were 50 cents a share, beating the 48-cent average estimate of 16 analysts surveyed by Bloomberg. The operator of the New York Stock Exchange is preparing to discuss its standalone strategy with shareholders after being blocked last week from merging with Deutsche Boerse AG.

LinkedIn Corp. surged 18 percent to $89.96. The biggest professional-networking website reported quarterly sales that more than doubled and forecast higher 2012 revenue, buoyed by advertising and subscriptions.

BlackRock Inc.’s Laurence D. Fink, who urged investors this week to put all their money in equities, said his call was aimed at getting cash back into the capital markets.

“It’s important to get cash off the sidelines and back into the markets so people can get the returns they need and we can get our economies moving again,” Fink, chief executive officer of the world’s largest asset-management firm, told BlackRock employees in Beijing yesterday. “Obviously, everyone needs a portfolio tailored to their risk-tolerance and goals; one size doesn’t fit all,” Fink said, according to a transcript of the comments obtained by Bloomberg News.

Comments by Fink that yields from traditional bonds are too low to provide meaningful returns for investors have been echoed by billionaire investor Warren Buffett, who said yesterday that bonds are among the “most dangerous of assets.” The Federal Reserve has kept borrowing costs near zero, and said last month that economic conditions may warrant “exceptionally low” interest rates through 2014.

“Too many people are underweight equities, and one of things I’m trying to do is to get people to think about the opportunities they’re missing, with valuations at these levels,” Fink said in Beijing.

Have a wonderful weekend everyone.

Be magnificent!

Man falls from the pursuit of the ideal of plain living and high thinking

the moment he wants to multiply his daily wants.  Man’s happiness really lies in contentment.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Travel is fatal to prejudice, bigotry, and narrow-mindedness

and many of our people need it sorely on these accounts.

Broad, wholesome, charitable views of men and things

cannot be acquired by vegetating in one little corner of the

earth all one’s lifetime.

-Mark Twain, 1835-1910

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

Senior Vice-President &

Senior Investment Advisor