April 24, 2012 Newsletter

Dear Friends,

Tangents:

On this day in:

1961 – President Kennedy takes sole responsibility for the failed Bay of Pigs Invasion of Cuba

1968 – Leftist Students take over Columbia University in protest over the Vietnam War
1981 – The IBM Personal Computer is introduced
1953 – Winston Churchill is knighted by Queen Elizabeth
1948 – The Berlin Airlift begins to relieve the surrounded city

Nobody sees a flower – really – it is so small it takes time – we haven’t time – and to see takes time, like to have a friend takes time.  ~Georgia O’Keeffe

photos of the day

April 24, 2012

Antique busts reflect in a glass case during the reopening of the collection of antiques at the Friedrich Schiller University in Jena, central Germany. More than 2,000 original sculptures and plaster casts are seen in the new showrooms.

Jens Meyer/AP

Nitoru, a nine-month-old toy poodle, rides a radio control toy car operated by its owner in Tokyo during lunch time.

Itsuo Inouye/AP

Market Closes for April 24, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

April 24 (Bloomberg) — Canadian stocks fell for a third day after reports that U.S. home purchases declined in March and Canadian retail sales fell for the first time in seven months in February.

Enbridge Inc., Canada’s largest pipeline company, decreased

1.1 percent after saying it will send divers to determine whether one of its two natural-gas pipelines 99 miles off the Louisiana coast is leaking. Potash Corp. of Saskatchewan Inc.

dropped 0.9 percent, leading material producers lower. Property- services company FirstService Corp. plunged 7.5 percent after missing analyst first-quarter earnings estimates. Celestica Inc.

increased 5.9 percent after beating analyst projections.

The Standard & Poor’s/TSX Composite Index decreased 8.85 points, or 0.1 percent, to 11,980.10 in Toronto.

“We need some strength out of China to get the materials space going,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.6 billion). “At the end of the day, the Canadian market is just a derivative play on China.”

The S&P/TSX had its first weekly gain in almost two months in the five days ending April 20, snapping its longest losing streak since 2008. Canadian stocks rallied after the International Monetary Fund and the Bank of Canada said economic growth would be faster than previously forecast. The index had its worst decline in a week on April 23, after manufacturing shrank in Europe and China.

U.S. houses sold at a 328,000 annual rate, down from an upwardly revised 353,000 pace in February that was the highest in two years, according to Commerce Department data issued today in Washington. Canadian retail sales decreased 0.2 percent to

C$38.9 billion, according to Ottawa-based Statistics Canada, which also reduced its January sales-growth estimate to 0.2 percent from 0.5 percent.

Energy companies declined, driven by Enbridge’s investigation of the potential pipeline leak. Enbridge decreased

1.1 percent to C$39.07. Canadian Natural Resources Ltd., the country’s third-largest energy company, fell 0.6 percent to C$31.30.

Potash Corp., the world’s largest fertilizer producer by market value, fell 0.9 percent to C$42.03. Agrium Inc., a fertilizer producer and farm retailer, declined 1.1 percent to C$84.14.

FirstService plunged 7.5 percent to C$28.16 after posting a first-quarter loss of 10 Canadian cents a share. The average analyst estimate was for a profit of 18 Canadian cents.

Industrial stocks in the S&P/TSX increased, driven by analyst upgrades for Canadian National Railway Co, which climbed

2.3 percent to C$81.24. The company was raised to buy from hold at Canaccord Financial Inc., which projects 2012 earnings per share growth of 14 percent, higher than that company forecast of

10 percent. Raymond James Financial Inc., National Bank of Canada and Bank of Montreal also increased their ratings.

Canadian Pacific Railway Ltd., the country’s second-largest railroad, gained 2.1 percent to C$75.78. Calgary-based carrier WestJet Airlines Ltd. added 1.9 percent to C$14.14.

Celestica Inc., which makes electronics for companies including Research In Motion Ltd., increased 5.9 percent to

C$8.85 after reporting first-quarter adjusted earnings per share of 25 Canadian cents, beating the average analyst estimate of 22 Canadian cents.

US

By Rita Nazareth

April 24 (Bloomberg) — U.S. stocks advanced, following yesterday’s decline in the Standard & Poor’s 500 Index, amid better-than-estimated earnings at companies from AT&T Inc. to 3M Co. and as data indicated the housing market is stabilizing.

AT&T, the largest U.S. telephone company, and 3M, the maker of Post-it Notes, rose at least 1.5 percent. International Business Machines Corp. added 0.7 percent after the company boosted its buyback plan by $7 billion and raised its dividend.

Juniper Networks Inc. increased 7.2 percent as revenue beat analysts’ projections. Apple Inc. jumped 7.5 percent at 5 p.m.

New York time as profit almost doubled last quarter.

The S&P 500 rose 0.4 percent to 1,371.97 at 4 p.m. New York time. The Dow Jones Industrial Average added 74.39 points, or

0.6 percent, to 13,001.56. The Nasdaq Composite Index lost 0.3 percent to 2,961.60. About 6.2 billion shares changed hands on U.S. exchanges, or 7.8 percent below the three-month average.

“Stocks have room to move higher,” said David Kelly, who helps oversee about $394 billion as chief market strategist at JPMorgan Funds in New York. “Earnings are healthy. The bar has been lowered so far that you can just walk over it. Housing is on the mend. A sign of a market top is when people are exuberant. There’s no exuberance as witnessed yesterday.”

Equities rebounded from yesterday’s slump, extending this year’s rally in the S&P 500 to 9.1 percent. Earnings per share beat forecasts at 82 percent of S&P 500 companies that reported results since April 10, according to data compiled by Bloomberg.

Per-share profits grew 3.3 percent in the first-quarter, Bloomberg data show. That’s up from the 0.8 percent growth projection before the earnings season started.

Economic optimism helped fuel gains today as new home sales data indicated that cheaper borrowing costs are helping stabilize the real estate market. Federal Open Market Committee members began a two-day meeting today and tomorrow will probably repeat their plan to keep the benchmark interest rate low at least through late 2014, economists say.

A gauge of homebuilders in S&P indexes jumped 2.4 percent.

D.R. Horton Inc., the largest U.S. homebuilder by volume, rose

3.2 percent to $15.54. KB Home added 4.5 percent to $7.91.

Phone shares had the biggest gain among 10 S&P 500 groups, rallying 2.8 percent. AT&T added 3.6 percent to $31.72. Earnings beat estimates on lower smartphone upgrade costs and an increase in wireless data sales related to Apple’s iPad.

3M increased 1.6 percent to $88.49. The U.S. market drove sales at the industrial and transportation unit, the largest division at the St. Paul, Minnesota-based company.

IBM gained 0.7 percent to $200. The quarterly payout will rise 10 cents to 85 cents a share. IBM had $5.7 billion remaining from a previous buyback plan, bringing the total available for repurchases to $12.7 billion.

Technology companies are approaching consumer staples as the largest dividend payers, according data compiled by Howard Silverblatt, S&P’s New York-based senior index analyst. The technology group contributes about 14 percent of the S&P 500’s dividends, up from 5.1 percent in 2004. Consumer staples companies account for almost 15 percent.

Apple gained 7.5 percent to $602.25 after the close of regular trading. Net income in the fiscal second quarter climbed to $11.6 billion, or $12.30 a share, as revenue increased 59 percent to $39.2 billion. Analysts had predicted profit of

$10.02 a share on revenue of $36.9 billion.

Chief Executive Officer Tim Cook is increasingly relying on regions outside the U.S. for sales growth. That helped make up for sales declines from the previous quarter at the top U.S.

mobile-phone carriers, Verizon Wireless and AT&T. It also quelled speculation that Apple’s growth pace may slacken.

“China has been a very fast-growing region for them,”

said Abhey Lamba, an analyst at Mizuho Securities USA Inc. in New York. “There’s more disposable income, strong demand for high-end products and their penetration has been very low in that market. They have been highlighting that region as one of their focus areas.”

The company’s shares slumped 2 percent to $560.28 today, dropping for a fifth straight day. Motorola Mobility Holdings Inc. won a partial U.S. International Trade Commission judge’s ruling in its bid to block imports of Apple’s devices including the iPhone and iPad tablet computer.

Juniper Networks climbed 7.2 percent to $21.63. Results suggest that demand from cable companies and other Internet service providers for Juniper’s switches and routers may be improving, said Brian Marshall, an analyst at ISI Group.

Wal-Mart Stores Inc. slumped 3 percent to $57.77. The shares dropped 7.5 percent in two days, the most since January 2009. The retailer is investigating allegations that executives in Mexico paid more than $24 million in bribes to speed expansion there. The company also is the subject of a U.S.

Justice Department criminal investigation, a person familiar with the probe said yesterday.

Big Lots Inc. plunged 24 percent, the biggest decline in the S&P 500, to $34.71. The discontinued-merchandise retailer with more than 1,400 U.S. stores reduced its fiscal first- quarter sales forecast amid lower demand for electronics.

Netflix Inc. tumbled 14 percent to $87.68. The world’s largest video-subscription service projected a slowdown in growth of U.S. streaming customers.

Coach Inc. lost 4.3 percent to $71.87. The largest U.S.

luxury handbag maker reported fiscal third-quarter sales that beat analysts’ estimates by the smallest margin in 11 quarters.

Companies’ failure to boost forecasts for future profits and sales will weigh on the S&P 500 as investors project slower growth, according to Barclays Plc’s Barry Knapp.

Knapp predicts the S&P 500 will end the year at 1,330, 4 percent below the average forecast of 11 strategists surveyed by Bloomberg as of April 16. He forecasts combined profit by S&P

500 companies will be $103 a share this year. Analysts that cover companies in the index estimate earnings of $104.86 in

2012 and $118.06 in 2013, according to data compiled by Bloomberg.

“Guidance is not moving higher and as a result, even where companies are beating estimates, the stocks still aren’t going up,” Knapp, the New York-based head of equity strategy at Barclays, said in a radio interview on “Bloomberg Surveillance” with Tom Keene. “If the guidance doesn’t move up, if the revenue’s missed, really what you’re discounting in terms of the growth outlook is not all that great.”

Have a wonderful evening everyone.

Be magnificent!

To know our soul apart from our ego

is the first step toward accomplishing the supreme deliverance.

It is necessary that we know with absolute certainty that in essence we are spirit.

And we can only arrive at this knowledge if we render ourselves masters of our ego,

if we rise above all pride, all appetite, all fear, by knowing that material losses and the

death of the body can never take away the truth and the greatness of our soul.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

A garden is always a series of losses set against

a few triumphs, like life itself.

-May Sarton, 1912-1995

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

Senior Vice-President &

Senior Investment Advisor