April 11th, 2011 Newsletter

Dear Friends,

 A poem I came across today:

 WHY THE WINDOW WASHER READS POETRY

(for Michael, who carried poems in his work shirt pocket)

 He lowers himself on a seat they call a cradle, rocking in harnesses strung long-armed from the roof.

Swiping windows clean he spends his day outside looking in.

Mirrors refract light into his eyes telescopes point down photographs face away, layers of dust unifying everything.

Tethered and counterbalanced these sky janitors hang, names stitched on blue shirts for birds to read.

Squeegees in hand they arc lightly back and forth across the building’s eyes descend a floor, dance again.

While the crew catches up he pauses, takes a slim volume from his pocketand balancing there, 36 stories above the street, reads a poem or two in which the reader is invariably placed inside looking out.

 -Laura Grace Weldon

photos of the day

April 11, 2011

Luna Lutz visits a tree with 9,800 Easter eggs in the garden of pensioner couple Christa and Volker Kraft in Saalfeld, Germany. The Kraft family have decorated their tree for Easter for more than 40 years.

Jens Meyer/AP

The Boeoegg, a snowman made of wadding and filled with firecrackers, explodes atop a bonfire in Sechselaeuten Square in Zurich,Switzerland. As the bells of St. Peter’s church chime six o’clock, the bonfire below the ‘Boeoegg’ is set alight and mounted guildsmen gallop around the pyre to the tune of the Sechselaeuten March. The faster the head of the ‘Boeoegg’ – the symbol of winter – catches fire and explodes, the warmer and more beautiful the summer will be.

Arnd Wiegmann/Reuters

Market Commentary:

Canada

By Matt Walcoff

April 11 (Bloomberg) — Canadian stocks fell the most in a month, led by energy producers, after the International Monetary Fund cut its growth forecast for the U.S. and oil and metals prices dropped.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, lost 3.6 percent as crude retreated from a 30-month high. Kinross Gold Corp., Canada’s third-biggest gold producer, decreased 3.3 percent as the metal dropped for the first time in six days. First Quantum Minerals Ltd., the country’s second-largest publicly traded copper producer, slumped 3.7 percent as that metal fell.

The Standard & Poor’s/TSX Composite Index lost 211.57 points, or 1.5 percent, the most since March 10, to 13,996.86.

“Oil is at a pretty high price given the global growth outlook,” said Murray Leith, who helps manage about C$6.5 billion ($6.8 billion) as a money manager at Odlum Brown Ltd. in Vancouver. “You’ve got to expect pullback. There’s fiscal drag now around the world as new stimulus just fades away.”

Coming into this week, the S&P/TSX had gained four straight weeks, the longest streak since October. Over that time, oil surged 12 percent while gold stocks rallied 7.4 percent as the conflict in Libya intensified and the U.S. dollar dropped to a 16-month low against a basket of world currencies.

Higher oil prices will limit U.S. economic growth to 2.8 percent this year, the IMF said in a report today. The organization had earlier forecast 3 percent growth.

Crude declined 2.5 percent in New York, the most since March 15. The S&P/TSX Energy Index tumbled 2.3 percent, the most in eight months.

Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.6 percent to C$43.51. Canadian Natural decreased 3.6 percent to C$45.56. Encana Corp., the country’s biggest natural gas producer, slumped 3.3 percent to C$31.85.                         

 Gold fell from a record after the African Union said Libyan leader Muammar Qaddafi agreed to a cease-fire. All 33 gold companies in the S&P/TSX declined.

 Barrick Gold Corp., the world’s largest producer of the metal, dropped 2.7 percent to C$50.66. Kinross slipped 3.3 percent to C$15.37. Goldcorp Inc., the world’s second-biggest gold-mining company by market value, lost 2.1 percent to C$51.06.

Silver reseller Silver Wheaton Corp. decreased 6.1 percent to C$42.18 as that metal retreated in electronic trading after the close of floor trading in New York. First Majestic Silver Corp., which mines in Mexico, sank 8.1 percent to C$21.64.

Copper dropped for the first time in a week on concern China might raise interest rates. The country, the world’s largest consumer of industrial metals, reported faster growth in exports and imports than most economists had forecast.

First Quantum declined 3.7 percent to C$131.67. Teck Resources Ltd., Canada’s largest base-metals and coal producer, lost 2 percent to C$53.83. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, decreased 2.2 percent to C$26.38.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, retreated 1.6 percent to C$54.72 after the Fertiliser Association of India said that country does not need to import potash for the monsoon season. The shares have fallen for five-straight days.

Lumber producer TimberWest Forest Corp. soared a record 19 percent to C$6.46 after agreeing to be bought by British Columbia Investment Management Corp. and the federal Public Sector Pension Investment Board. The funds will pay C$6.48 in cash for each so-called stapled unit.

Westport Innovations Inc., which makes natural-gas engines, plunged 13 percent to C$22.45 after Ann Duignan, an analyst at JPMorgan Chase & Co., began coverage of the company with a “neutral” rating. The shares had jumped 21 percent this month through April 8 on speculation the U.S. government will provide incentives for vehicles fueled by natural gas.

 US

By Rita Nazareth

April 11 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a third day, after oil dropped from a 30-month high as the International Monetary Fund cut its growth forecast for the world’s largest economy.

Occidental Petroleum Corp. and Anadarko Petroleum Corp. slumped at least 3.1 percent as crude oil fell 2.5 percent.

General Motors Co. retreated 2.4 percent after China said 2011 car sales may trail forecasts. Tyco International Ltd. rise 3.3 percent as three people with knowledge of the matter told Bloomberg News that Schneider Electric SA is weighing a takeover offer for the maker of security systems.

The S&P 500 dropped 0.3 percent to 1,324.46 at 4 p.m. in New York. The benchmark gauge had the longest losing streak in almost a month. The Dow Jones Industrial Average rose 1.06 points, or less than 0.1 percent, to 12,381.11.

“There’s clearly a defensive tone,” said Bruce McCain, who oversees $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “The IMF report got people concerned,” he said. “The stock market is stuck, trying to break the previous high. There’s hope that the first- quarter earnings season will be good and that we’ll see more takeovers. That would be good for stocks.”

The S&P 500 has risen 5.3 percent in 2011 amid government stimulus measures and as corporate profits beat analysts’ estimates for an eighth straight quarter. Earnings for S&P 500 companies rose 12 percent in the first quarter and will increase 17 percent this year, according to analyst estimates compiled by Bloomberg.

Oil fell from a 30-month high after the International Monetary Fund lowered its forecast for U.S. growth this year, predicting higher oil prices and the pace of job gains will restrain the recovery.

The world’s largest economy will expand 2.8 percent this year, down from the 3 percent projected in January, the IMF said today. Global gross domestic product will grow 4.4 percent in 2011, matching the previous estimate, according to the Washington-based lender’s World Economic Outlook report.

Consumer spending, the biggest part of the U.S. economy, faces headwinds from the rising cost of food and gasoline. Federal Reserve officials last month said the expansion is on “firmer footing,” lessening the need to extend a bond purchase program beyond June.

“Recovery in the labor market remains lackluster,” the IMF said in the report. “The drag on 2011 growth from oil price increases largely offsets the boost from the Federal Reserve’s unconventional policies and from stronger net exports.”

Energy shares in the S&P 500 dropped 1.9 percent, the biggest decline among 10 industries. Occidental Petroleum fell 3.2 percent to $100.42. Anadarko Petroleum slumped 4.3 percent to $81.11.

Automakers had the biggest drop in the S&P 500 within 24 industries, falling 2.2 percent. GM, which sold 28 percent of its cars last year in China, slumped 2.4 percent to $30.77.

China’s passenger-car sales may grow at a slower pace this year than was earlier estimated by a group of the nation’s automakers after the government ended incentives for purchases and raised fuel prices.

Sales growth in China this year may fail to reach a previous estimate by the China Association of Automobile Manufacturers for a 10 percent to 15 percent increase, said Dong Yang, vice chairman of the association.                           

“I am concerned about whether our growth rate is too low,” Dong said at a briefing in Beijing yesterday. “Some automakers’ profitability may be undermined this year and some may even face difficulties in their operations.”

Tyco International climbed 3.3 percent to $48.72. Schneider Electric is weighing a takeover offer for Tyco that would make the French company the world’s biggest maker of security systems, said three people with knowledge of the matter.

Schneider is working with bankers to help it assess a potential acquisition of Tyco, said the people, who spoke on condition of anonymity because the matter is private.

Schneider’s efforts are at an early stage and no deal is imminent, the people said. Tyco, based in Schaffhausen, Switzerland, had a market value of $22.3 billion as of April 8.

Alcoa Inc. slumped 0.8 percent to $17.77. After the close of U.S. exchanges, the largest U.S. aluminum producer reported first-quarter profit that beat analysts’ estimates after prices rose for the lightweight metal. The shares lost 2.9 percent to $17.25 at 4:54 p.m. in New York.                          

Investors should buy May S&P 500 puts or put spreads to protect from U.S. stock declines or use straddles or strangles to bet volatility will increase as earnings season begins, UBS AG said. Fewer companies are likely to beat analysts’ estimates for the past quarter while more may cut forecasts, equity derivatives strategist Mitchell Revsine wrote in a report.

Higher commodity prices may cause companies to miss estimates and reduce forecasts, and Japan’s tsunami will cause some to reduce earnings guidance, Revsine wrote.

“Market volatility may increase during earnings season,” the New York-based strategist said. “We recommend investors buy May Index options for exposure to potential increased market volatility through earnings and/or as a portfolio hedge.”

Have a wonderful evening everyone.

Be magnificent!

To expect something is to look for something pleasant.

Searching for the pleasurable is a form of denial.

You cannot expect anything, because the expectation is within you,

and what you are waiting for is dependent on external forces.

-Swami Prajnanpad, 1891-1974

As ever,

 Carolann

 He is indebted to his memory for his jests

and to his imagination for his facts.

   -Richard Brinsley Sheridan, 1751-1816

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

Senior Vice-President & Senior Investment Advisor