March 8, 2012 Newsletter

Dear Friends,

Tangents: Full moon tonight!  Look north and you may be able to see the aurora borealis and the northern lights.  There is a solar storm that is going to occur tonight.

It’s International Women’s Day.

March 8, 1913: Income tax begins for the first time in the US.

March 8, 1917: Russian Revolution begins…

March 8, 1983: President Ronald Reagan calls USSR an “evil empire.”

photos of the day

March 8, 2012

Hindu priest Babulal jumps out of a fire to signify the burning of the demoness Holika during a ritual to mark the first day of the Holi spring festival at village Phalen, India. Holi in Phalen starts on the first day of the full moon where a Hindu mythological story will be re-enacted to symbolize the victory of good over evil.

Adnan Abidi/Reuters

Secretary of State Hillary Rodham Clinton (r.) and first lady Michelle Obama present the 2012 International Women of Courage Award to Safak Pavey of Turkey on the 101st Anniversary of International Women’s Day at the State Department in Washington. Pavey, the first disabled woman elected to the Turkish Parliament, is being recognized for her work championing the rights of vulnerable populations.

Market Closes for March 8, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Matt Walcoff

March 8 (Bloomberg) — Canadian stocks rose the most in two weeks as commodities gained with the euro and banks advanced on speculation Greece will complete a debt swap.

Royal Bank of Canada, the country’s largest lender by assets, advanced 2.3 percent. Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.6 percent as crude oil gained. Goldcorp Inc., the world’s second-biggest gold producer by market value, rallied 1.1 percent as the U.S. dollar dropped the most intraday against the euro since Jan 17.

The S&P/TSX Composite Index gained 111.77 points, or 0.9 percent, to 12,461.93.

“The market has really figured it out,” Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about

C$200 million ($200 million). “The banks are in shape for this large swap. They have to go along with it.”

After closing at an almost six-month high on Feb. 28, the index fell 3.1 percent through yesterday as raw-materials and energy companies dropped on concern Greece might not get enough bondholders to participate in the debt exchange. The industries make up 47 percent of Canadian stocks by market value.

Holders of about 85 percent of the Greek bonds eligible for the swap agreed to take part, according to a banking official in Athens who declined to be identified. The country had set a minimum of 75 percent participation. The deal would reduce Greece’s outstanding privately held debt by 53.5 percent.                       4

Banks in the S&P/TSX gained the most since Jan 23. Royal Bank advanced 2.3 percent to C$56.93. Toronto-Dominion Bank, its biggest domestic rival, rose 1.7 percent to C$81.70.

Regional lender Canadian Western Bank rallied after Sumit Malhotra, an analyst at Macquarie Group Ltd., boosted his rating on the shares to outperform from neutral. An outperform rating means Macquarie expects the stock to return at least 5 percentage points more than its benchmark over the next 12 months. The company’s net interest margin has probably bottomed, Malhotra wrote in a note to clients.

The shares climbed 2.8 percent to C$29.09.

Crude oil advanced on the New York Mercantile Exchange after Barclays Plc said international sanctions have reduced Iranian oil shipments by 300,000 to 400,000 barrels a day.

Suncor increased 1.6 percent to C$34.27. Cenovus Energy Inc., Canada’s fifth-largest energy company, climbed 3.4 percent to C$37.89.

PetroBakken Energy Ltd., a western Canadian oil and gas producer, rose 6.3 percent to C$17.43 to extend its two-day surge to 16 percent. At least five analysts boosted their price forecasts on the shares today, a day after the company reported fourth-quarter cash flow that beat the average analyst estimate in a Bloomberg survey by 15 percent. Petrobank Energy & Resources Ltd., which owns a majority stake in PetroBakken, jumped 8 percent to C$16.60.

Oil and gas company NAL Energy Corp. rallied 5.1 percent to

C$7.63 after Travis Wood, an analyst at Toronto-Dominion Bank, raised his rating on the shares to buy from hold. In a note to clients, Wood said the company is cheaper than its peers based on its price, debt and forecast cash flow. NAL Energy had declined six straight days through yesterday, its third streak of that length this year.

Gold futures gained the most in two weeks on the Comex in New York. Goldcorp advanced 1.1 percent to C$47.12. Yamana Gold Inc., Canada’s third-largest company in the industry by market value, increased 2.6 percent to C$16.98. Dundee Precious Metals Inc., which operates in Bulgaria, Armenia and Namibia, climbed

5.7 percent to C$10.02.

Base-metals producers rose after Germany reported a 1.6 percent increase in industrial production for January, beating the median economist forecast of 1.1 percent growth.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 2 percent to C$20.55 after plunging 14 percent in the previous four days. Coal and base-metals company Sherritt International Corp. surged 7.5 percent to C$5.88.

HudBay Minerals Inc., which mines copper, zinc and precious metals, advanced 4.9 percent to C$11.67 after reporting quarterly earnings that beat the average analyst estimate in a Bloomberg survey by 40 percent, excluding certain items.

US

By Rita Nazareth

March 8 (Bloomberg) — U.S. stocks rallied, giving the Standard & Poor’s 500 Index its biggest two-day advance of the year, as Greece moved closer to completing its debt swap.

Banks had the biggest increase in the S&P 500 among 24 groups. Wells Fargo & Co. and JPMorgan Chase & Co. rose at least

1.2 percent. Alcoa Inc. and Caterpillar Inc. added more than 1.8 percent to pace gains among the biggest companies. Coach Inc., the largest U.S. luxury handbag maker, climbed 4.6 percent after saying its business continues to be “strong” in China.

McDonald’s Corp. lost 3.2 percent as sales trailed estimates.

The S&P 500 rose 1 percent to 1,365.91 at 4 p.m. New York time, adding 1.7 percent in two days. The Dow Jones Industrial Average rose 70.61 points, or 0.6 percent, to 12,907.94. The Russell 2000 Index of small companies gained 1.3 percent to 806.34. About 6.1 billion shares changed hands on U.S. exchanges today, or 8.8 percent below the three-month average.

“Greece has no choice and the bondholders have no choice,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees $10.5 billion. “They’re both in the mud. The swap will go through.

That will cause a moderate sigh of relief in the market. How long it will extend? That’s the big question mark.”

Stocks gained as Greece’s government got about 85 percent of bondholders to tender their holdings of the country’s debt for new securities in the biggest restructuring in history. A final result will be released tomorrow at 8 a.m. in Athens, a government official said. Finance Minister Evangelos Venizelos will hold a press conference at 1 p.m. Athens time.

With Greece again the focus of the euro-area debt crisis now in its third year, the goal of the exchange is to reduce the

206 billion euros of privately held Greek debt by 53.5 percent.

Together with a 130 billion-euro second Greek aid package, the writedown is a key element in European leaders’ efforts to turn the tide against the crisis.

“They’ve bought themselves some time,” Alan Brown, the London-based group chief investment officer at Schroders Plc, said in a telephone interview. His firm oversees $283.9 billion.

“Reducing Greek debt is all well and good, but it doesn’t do anything to restore Greece’s competitiveness. This problem is likely to resurface and the question is when.”

Today’s rally in stocks extended the S&P 500’s gain in 2012 to 8.6 percent. The index has risen amid better-than-estimated economic data and expectations Europe would tame its debt crisis. Technology and financial shares had the biggest gains among 10 groups this year, adding at least 13 percent.

The KBW Bank Index advanced 1.4 percent today as 21 of its

24 stocks climbed. Wells Fargo climbed 3.3 percent to $31.40.

JPMorgan increased 1.2 percent to $40.44.

Investors also watched economic data as the number of Americans filing claims for jobless benefits rose to 362,000 last week, a level consistent with an improving labor market.

The Labor Department will report monthly jobs data tomorrow, which economists forecast will show an increase of 225,000 private jobs and total non-farm payrolls growth of 210,000.

The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 1.8 percent. The Dow Jones Transportation Average rallied 1.4 percent. A measure of homebuilders in S&P indexes increased 3.6 percent. Commodity and industrial shares had the biggest gains in the S&P 500 among 10 groups. Alcoa, the largest U.S. aluminum producer, rallied 2.3 percent to $9.77.

Caterpillar, the world’s biggest maker of construction and mining-equipment, rose 1.9 percent to $110.28.

Coach advanced 4.6 percent to $76.79. Analysts’ estimates are likely to increase because of a boost in revenue and gross margins, Stifel Nicolaus & Co. said.

Monster Worldwide Inc. surged 3.4 percent to $8.61. The online recruiting service that has lost almost 90 percent of its value is poised to extract a record takeover premium for investors. Chief Executive Officer Salvatore Iannuzzi said last week he is weighing options to boost the company’s shares after Monster traded as low as 0.67 times the value of its net assets.

competitor, said Matrix Asset Advisors Inc.

“It should wrest a high premium,” said David Katz, chief investment officer at New York-based Matrix Asset Advisors Inc., which oversees about $935 million and owned Monster shares as of February. Acquirers would still be “getting it at a steal.”

McDonald’s lost 3.2 percent, the most in the Dow, to $96.96. The restaurant chain said sales at stores open at least

13 months rose 7.5 percent worldwide last month, trailing analysts’ estimates for the first time since August, as consumers cut spending in Europe.

American International Group Inc. slumped 3.9 percent to $28.31. The U.S. Treasury Department is selling $6 billion in shares of AIG, the insurer rescued in 2008 after it suffered losses tied to wrong-way bets on the mortgage market.

Exxon Mobil Corp. slid 1.2 percent to $84.83. The company expects its natural-gas and oil production to drop 3 percent in 2012. Exxon’s forecast is based on an average price of $111 a barrel for Brent crude, it said in a slide presentation at an investor meeting today.

Dendreon Corp. tumbled 7 percent to $10.12. The shares had the biggest decline in the Russell 1000 Index. The maker of the prostate cancer drug Provenge slumped after Johnson & Johnson said its rival product, Zytiga, performed better than a placebo in a trial.

Apple Inc. gained 2.1 percent to $541.99. The shares closed almost unchanged yesterday after the company unveiled a new version of its iPad tablet computer. Apple took over from Wells Fargo as the stock most often in the top 10 holdings of the 50 largest mutual funds in the fourth quarter, and widened its lead among the biggest hedge funds, Citigroup Inc. said.

Apple, based in Cupertino, California, was a top-10 holding for 18 of the 50 largest U.S. mutual funds in the period, Tobias Levkovich, Citigroup’s chief U.S. equity strategist, wrote in a note yesterday. Wells Fargo, based in San Francisco, and Microsoft Corp. are in the top 10 holdings of 17 of the mutual funds. Apple gained 6.2 percent in the quarter, while the S&P

500 rallied 11 percent. Wells Fargo rose 14 percent and Microsoft added 4.3 percent.

“The 30 most held stocks for hedge funds shifted more heavily” to technology, Levkovich said in the report. “Apple remains the most-held stock for both growth and value hedge funds as well as for growth mutual funds while Wells Fargo remains the most owned for value oriented mutual funds.”

The decreasing number of industry groups in “uptrends”

may foreshadow a retreat by the U.S. stock market, according to Craig W. Johnson, a technical market strategist at Piper Jaffray in Minneapolis.

The amount of industries trending higher increased from October through last month to about 95 percent before slipping last week, Johnson said, citing an indicator watched by analysts who use charts to predict market direction. He said the high proportion signaled the market was due for a retreat.

“This advance is getting tired,” Johnson said in a phone interview yesterday. “As the market gets to higher and higher levels, you start to see less and less participation,” he said.

“100 percent of the stocks up, 100 percent of the groups up”

all the time isn’t possible.

Have a wonderful evening everyone.

Be magnificent!

What we are about to undertake is an expedition together, a journey of discovery

into the most secret recesses of our consciousness.

And for such an adventure we must travel light, we cannot burden ourselves

with opinions, prejudices, conclusions that is, with all the baggage that we have collected

over the past two thousand years or more.  Forget everything you know about yourself;

forget everything that you have thought about yourself;

we are going to set off as if we know nothing.

-Krishnamurti, 1895-1986

As ever,

Carolann

Each instant is a place we’ve never been.

-Mark Strand, 1934-

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

Senior Vice-President &

Senior Investment Advisor