March 25th, 2011 Newsletter
Dear Friends,
It’s official – the Harper government has fallen. The minority government of Stephen Harper has been defeated in a non-confidence vote. MPs voted 156-145 in favour of a Liberal motion today citing Stephen Harper’s minority Tories for contempt of Parliament and expressing non-confidence in the government. The markets took it in stride – they actually gained and the dollar hardly noticed.
I had an e-mail from a client today describing another type of fall that took place on this day in 1944 – falling from a parachute. He wrote:
I’m half drunk Carolann, as I am celebrating day two of, March 25/44 when we parachuted into withering fire across the Rhine at 10:00 hrs .and our plane was hit and on fire and I survived being the second last of 20 to leave “Red Dog” (the Plane’s name). The Jump Master that followed me did not survive.
Even though my jump smock was penetrated by small arms fire I landed safely!. And we succeeded in overwhelming the 2nd Parachute Corps of the 1st German Parachute Army.
Sorry …. Carolann, but today is a big thing for me, and you seemed so understanding in the past!.
It’s CORUBA rum BTW ha ha
Despite me, have a wonderful day
XOXO
This man is one of my heroes – he is one of the most interesting and interested (in everything in the world) persons I’ve ever met. He and his wife have been my clients for well over twenty years and he often sends me the most wonderful photos of this beautiful universe and references to interesting and informative web-sites he has found.
I’m humbled when I think of the courage and sacrifices that are made by such valiant men and women so the world will be a better place, and just maybe one day we will have a world at peace.
A lighter look at the current news:
Jon Stewart:
We’re at war? Again? Don’t we already have two? Wars aren’t like kids, where you don’t have to worry about the youngest one because the other two will take care of it.
Conan:
Libyan dictator Moammar Gadhafi, I think he’s becoming unhinged…(He) gave a rambling speech that lasted nearly three hours….So at least we now know where all of Charlie Sheen’s coke went.
David Letterman:
How about that Al Qaeda? They’re publishing a new magazine for women. Isn’t that crazy? They already have one for men. It’s called Car Bomb and Driver.
There are reports that Gadhafi’s son plagiarized his doctoral thesis…Boy, you think you know somebody, then…it’s just like a shot to the solar plexus.
Jay Leno:
They said on the news today 10,000 to 15,000 people each day are coming across the border from Libya into Egypt. Or, as we call it in California, a “trickle.”
Here’s some good news. Life expectancy in the U.S. has risen to a new record of 78.2 years. The bad news? The average age a person has to work to until they retire is 78.3 years.
photos of the day March 25, 2011
A young girl passes the time with her teddy bear at a center for evacuees fleeing leaked radiation from the damaged Fukushima nuclear facilities in Soma, Fukushima Prefecture, Japan. Experts are worried that anxiety caused by the fear of radiation may cause serious health problems for residents in the months and years ahead.
The Cambridge University rowing crew practice on the River Thames in Hammersmith, west London. The rowing crews from Oxford and Cambridge will compete in the 152nd Boat Race between the two universities.
Toby Melville/Reuters
Market Commentary:
Canada
By Matt Walcoff
March 25 (Bloomberg) — Canadian stocks rose to a second straight weekly gain as agriculture companies advanced and energy shares rallied along with natural gas prices.
Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 3 percent after the U.S. Agriculture Department said exporters sold 1.25 million metric tons of corn to unknown buyers. BlackBerry maker Research In Motion Ltd. plunged 11 percent after forecasting a smaller profit than most analysts had estimated. Encana Corp., Canada’s largest natural gas producer, climbed 1.8 percent.
The Standard & Poor’s/TSX Composite Index rose 10.02 points, or 0.1 percent, to 14,039.39. The index gained 1.8 percent this week, the most since Feb. 18.
“People are comfortable taking long positions again,” said Stephen Gauthier, who helps oversee C$600 million ($611 million) as a money manager at Fin-XO Securities in Montreal.
“Ten days ago, the situation in Libya seemed out of control and the situation in Japan seemed out of control.”
The S&P/TSX had slipped 0.8 percent this month through yesterday, reflecting the impact of the March 11 earthquake and tsunami in Japan and the escalation of the Libyan civil war. The equity benchmark hasn’t had a monthly decline since June.
Fertilizer producers rallied. Wheat may rise as dry weather in the U.S. threatens crops, said Mark Schultz, chief analyst at Northstar Commodity Investment Co. in Minneapolis.
Potash Corp. increased 3 percent to C$56.12. Agrium Inc., Canada’s second-largest fertilizer producer, gained 0.9 percent to C$87.77. Viterra Inc., Canada’s biggest grain handler, rallied 3.4 percent to C$11.75.
S&P/TSX energy companies advanced for the first time in four days as natural gas climbed to a seven-week high on forecasts for unseasonably cold weather in the eastern U.S.
Encana increased 1.8 percent to an eight-month high of C$34.04. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, rose 2.6 percent to C$23.80. Enbridge Inc., the country’s largest pipeline company, climbed 1.5 percent to a record C$59.70.
RIM sank 11 percent in Toronto Stock Exchange trading, the most in nine months, to C$55.78. The company forecast first- quarter earnings of $1.47 a share to $1.55 a share, excluding certain items. Analysts had estimated the company would earn $1.66 a share.
“Time is not on RIM’s side,” Brian Modoff, an analyst at Deutsche Bank, said in a note to clients. “We think this quarter was just a taste of what lies in store for the company.”
Directory publisher Yellow Media Inc. increased 4 percent to C$5.50 after agreeing to sell its Trader Corp. unit to Apax Partners for C$745 million. Trader Corp. publishes about 160 publications and 22 websites.
Imax Corp., the maker of giant-screen movie-projection systems, climbed 6.6 percent to C$31.15 after Aravinda Galappatthige, an analyst at Canaccord Financial Inc., raised his rating on the shares to “buy” from “hold.” Imax soared 12 percent to a 10-year high yesterday after announcing plans to open 75 new theaters in China.
US
By Rita Nazareth and Lu Wang
March 25 (Bloomberg) — U.S. stocks advanced, giving the Standard & Poor’s 500 Index its biggest weekly rally since February, after Oracle Corp.’s profit forecast beat analyst estimates and the rate of economic growth was revised higher.
Oracle, the world’s top supplier of database software, climbed 1.6 percent. U.S. shares of Accenture Plc, the world’s second-largest technology-consulting firm, rallied 4.5 percent after its sales forecast beat analyst’s projections. Bristol- Myers Squibb Co. advanced 3.3 percent after the pharmaceutical company won U.S. approval a melanoma drug.
The S&P 500 gained 0.3 percent to 1,313.80 at 4 p.m. in New York. The gauge climbed 2.7 percent this week. The Dow Jones Industrial Average advanced 50.03 points, or 0.4 percent, to 12,220.59 today. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell 0.5 percent to 17.91, extending its retreat since March 16 to 39 percent.
“Corporations are making money amid this pace of economic growth,” said Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., which has about $90 billion in client assets. “We saw a solid GDP number. The fact that Oracle reported a decent forecast would be consistent with that trend. As long as the data is supporting the recovery, the S&P 500 can get to $100 a share of earnings over the next year and a half. That means the index rising to 1,500.”
U.S. stocks rose yesterday, recouping losses that followed Japan’s March 11 earthquake, as corporate profits beat estimates and a government report showed a decline in jobless claims. The S&P 500 has advanced 4.5 percent in 2011, extending last year’s 13 percent rally, amid government stimulus measures and an eighth straight quarter of higher-than-estimated earnings.
The U.S. economy grew at a 3.1 percent annual rate in the fourth quarter, led by a jump in consumer spending that will be hard to match early in the year as energy prices surge. The revised increase in gross domestic product compares with a 2.8 percent estimate issued last month, figures from the Commerce Department showed today in Washington.
Stocks rose even as the Thomson Reuters/University of Michigan final index of consumer sentiment decreased to 67.5 from 77.5 in February. The preliminary estimate issued earlier this month was 68.2. The median forecast of 67 economists surveyed by Bloomberg News projected a reading of 68.
European Union leaders at a two-day meeting in Brussels agreed to cut the startup capital for the future euro emergency aid mechanism, while Portugal continued to rule out a rescue after the parliament’s rejection of budget cuts led Prime Minister Jose Socrates to offer to quit.
A bailout may total as much as 70 billion euros ($99 billion), two European officials with direct knowledge of the matter said, as credit-rating cuts threatened to deepen Portugal’s debt woes.
“The market has digested a lot of uncertainties in the past couple of weeks, with the tragedy in Japan and the unrest in Libya,” said Charles Stamey, who helps manage $42 billion at Manning & Napier Advisors Inc. in St. Petersburg, Florida. “I certainly think the market is looking for some good news and this is a bit of it,” he said of Oracle’s forecast.
Oracle climbed 1.6 percent to $32.64 after the company late yesterday forecast profit excluding acquisition costs and some other expenses of 69 cents to 73 cents this quarter, beating the average analyst estimate of 66 cents. Earnings on that basis were 54 cents a share in the period that ended Feb. 28, also exceeding analysts’ projections.
Accenture added 4.5 percent to $54.29. Third-quarter net revenue, or sales before reimbursements, will grow to a range of $6.3 billion to $6.5 billion, the Dublin-based company said. The average analyst estimate in a Bloomberg survey was $6.08 billion. The company also increased forecasts for full-year net revenue growth to a range of 11 percent to 14 percent, from 8 percent to 11 percent, and for earnings per share to $3.22 to $3.30, from $3.08 to $3.16.
“Very robust results from enterprise bellwethers Oracle and Accenture will reassure people that the enterprise capex cycle remains a powerful tailwind,” London-based analysts Jonathan Tseng and Andrew Griffin at BofA Merrill Lynch Global Research wrote in a report to clients.
Bristol-Myers Squibb rose 3.3 percent to $27.29. The pharmaceutical company won U.S. approval for ipilimumab, the first drug in a new family of medicines to treat advanced melanoma, the most deadly form of skin cancer.
Smithfield Foods Inc. gained 2 percent to $24.44. The world’s biggest pork processor said it sees no “backup” in Japanese orders and that the nation is shifting to fresh pork, according to a Barclays Plc presentation.
Research In Motion Ltd. slumped 11 percent to $56.89 after the maker of the BlackBerry smartphone forecast first-quarter revenue and profit that trailed estimates. Earnings will be $1.47 to $1.55 a share as the company spends more on research and steps up marketing for its PlayBook tablet and new smartphones, RIM said late yesterday. Analysts had predicted profit of $1.66 on average, excluding some costs.
Have a wonderful weekend everyone. Be magnificent!
If you are in the moment, you are in the infinite. -Swami Prajnanpad,1891-1974
As ever,
Carolann
The one thing that doesn’t abide by majority rule is a person’s conscience. -Harper Lee, 1926-