April 20th, 2011 Newsletter

Dear Friends,

 To all the hockey fans out there~ One big cheer for Game 5 tonight “Vancouver Canucks” Vs “Chicago BlackHawks”. Goooooooo Canucks!

Market Commentary:

 Canada

By Matt Walcoff

 April 20 (Bloomberg) — Canadian stocks rose for a second day as companies including Intel Corp. and Freeport-McMoRan Copper & Gold Inc. topped analysts’ earnings forecasts and oil and metals gained on a weaker U.S. dollar.

Suncor Energy Inc., Canada’s largest oil and gas producer, advanced 2.8 percent after the U.S. government reported a decline in crude inventories. Toronto-Dominion Bank increased 1.4 percent after at least 20 S&P 500 companies reported profit that surpassed their average analyst estimate. Barrick Gold Corp., the largest producer of the metal, climbed 1.3 percent as the U.S. dollar retreated against 15 of 16 other major currencies.

 The Standard & Poor’s/TSX Composite Index gained 164.89 points, or 1.2 percent, to 13,901.72 at 1:46 p.m. in Toronto, the biggest gain in four weeks. “It’s an earnings- and growth-driven rally today,” said Blair Falconer, who manages C$800 million ($839 million) at HSBC Securities (Canada) Inc. in Toronto. “The scare stories about growth, whether it’s the issues with European debt or the issues with inflation, all those risk factors really seem to have abated in the last couple of days.”

 The S&P/TSX had fallen 2.7 percent this month before the market opened, more than every other developed-market benchmark gauge except Greece’s. Banks and energy companies dropped after the International Monetary Fund cut its growth forecast for the U.S. and Standard & Poor’s lowered its outlook on U.S. sovereign credit ratings.

 Topping Estimates

Intel, the world’s biggest chipmaker, forecast second- quarter sales that may top analysts’ estimates. Oil and metals rallied as the U.S. dollar declined to a 16-month low against a basket of world currencies.

 Crude increased as much as 3.3 percent in New York. U.S. supplies fell by 0.6 percent last week. Eleven of 13 analysts in a Bloomberg survey had forecast an increase. Suncor climbed 2.8 percent to C$42.52. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, rose 2.2 percent to C$44.16.

Petrominerales Ltd., which produces oil and gas in Colombia, rallied 5.9 percent to C$36 after Natalia Agudelo, an analyst at Celfin Capital, began coverage of the company with a “buy” rating. In a note to clients, Agudelo cited the company’s “aggressive exploration program” and “proven and experienced” management.

The S&P/TSX Financials Index gained the most in three weeks. TD advanced 1.4 percent to C$82.72. Bank of Nova Scotia, Canada’s third-largest lender by assets, increased 1.4 percent to C$57.31. Manulife Financial Corp., North America’s fourth- biggest insurer, climbed 1.6 percent to C$16.78.

Record Gold

Precious-metals producers advanced as gold touched a record $1,506.50 an ounce in New York.

Barrick gained 1.3 percent to C$52.47. Kinross Gold Corp., Canada’s third-biggest gold producer, increased 1.2 percent to C$14.70. Semafo Inc., which produces gold in Africa, rallied 4.7 percent to C$8.26.

 Sulliden Gold Corp. jumped 10 percent to C$2.13, extending a 9.7 percent gain from yesterday, when it released drilling results. All 16 S&P/TSX base-metals and coal producers gained after Freeport, the largest publicly traded copper producer, raised its 2011 sales forecast. Copper advanced the most in four weeks.

 “Miners in Canada are starting to forecast much-stronger revenue and earnings growth for the rest of 2011,” Falconer said.

 Teck, First Quantum

 Teck Resources Ltd., the country’s largest base-metals and coal producer, increased 1.9 percent to C$52.59. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 5.4 percent to C$126.95. Copper Fox Metals Inc., which owns a base- and precious-metals project in British Columbia, surged 12 percent to C$2.58.

Quadra FNX Mining Ltd., which mines copper in the U.S., Canada and Chile, soared 12 percent, the most since May, to  C$15.46 after analysts at Royal Bank and TD raised their ratings on the shares to “outperform” and “buy,” respectively.In a note to clients, Greg Barnes, an analyst at TD, cited a higher net asset value estimate for Quadra FNX’s Victoria project in Ontario. Magna International Inc., Canada’s largest auto-parts maker, rose 5.8 percent to C$46.54. Herbert Demel, an executive vice president, told a Shanghai auto forum that the company forecasts emerging markets will account for 15 percent of sales by 2013, up from 10 percent now.

MagIndustries Corp., which is developing a potash mine in the Republic of Congo, surged 50 percent to 22.5 Canadian cents after agreeing to be bought by Shanghai-based Evergreen Industries Group for 25 Canadian cents a share in cash.The shares soared as much as 57 percent, the most intraday since October 2008.

US

By Stephen Kirkland and Rita Nazareth

April 20 (Bloomberg) — Global stocks staged the biggest rally of 2011 and the Dow Jones Industrial Average reached an almost three-year high amid better-than-estimated results at companies from Intel Corp. to United Technologies Corp. and L’Oreal SA. Gold jumped to a record as the dollar slid.

The MSCI World Index jumped 2 percent at 4 p.m. in New York, the biggest increase since Nov. 4, and emerging-market shares rallied the most in 10 months. The Standard & Poor’s 500 Index climbed 1.4 percent. The U.S. currency weakened versus all 16 major peers, dragging the Dollar Index to the lowest level since November 2009. Ten-year U.S. Treasury yields rose four basis points to 3.41 percent. Sugar and nickel led commodities higher and gold traded above $1,500 an ounce for a second day.

 Technology shares led gains after Intel said late yesterday revenue may top analysts’ estimates in the second quarter.

L’Oreal SA, the world’s largest cosmetics maker, reported sales climbed 9.3 percent and South Korea’s LG Chem Ltd. posted a 27 percent jump in profit. Earnings-per-share exceeded predictions for 76 percent of the 59 companies in the S&P 500 that reported results since April 11, helping revive investor confidence after S&P cut its rating outlook for U.S. debt on April 18.

 “The risk-on trade is in full-blown mode,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $53 billion. “The surprise factor was sort of being lost in the market. The good corporate earnings across the board reinforce the idea that the global recovery is in place. As a consequence, equities and commodities are feeling the benefits of that.”

 April 18 Plunge Erased

 The S&P 500 climbed for the fifth time in six days and erased its 1.1 plunge on April 18. Intel surged 7.8 percent, the most in two years. Yahoo! Inc. climbed 4.7 percent as the most- visited U.S. Web portal had first-quarter sales that topped estimates. Apple Inc., the maker of the iPhone that is scheduled to report results after markets close today, climbed 1.4 percent. United Technologies, maker of Carrier air conditioners and Pratt & Whitney engine parts, surged 4.3 percent to $85.90, its highest close since at least 1980.

 Intel and United Technologies led the Dow up 186.79 points, or 1.5 percent, to 12,453.54, its highest closing level since June 2008.

 Stocks extended gains after sales of previously owned U.S. homes increased 3.7 percent to a 5.1 million annual rate in March, exceeding the 5 million median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed. The median price declined from a year earlier, and 40 percent of the sales were distressed properties.

 European Stocks

 The Stoxx Europe 600 Index advanced 1.7 percent, the most in a month. STMicroelectronics NV, Europe’s biggest chipmaker, climbed 5 percent and ASML Holding NV, the largest semiconductor-equipment maker, jumped 5.3 percent. L’Oreal SA rose 3.2 percent. PSA Peugeot Citroen gained 4.7 percent as Europe’s second-biggest automaker posted a 10 percent increase in first-quarter revenue.

 The MSCI Emerging Markets Index jumped 2.5 percent, the steepest gain since June. A measure of technology stocks in the gauge rallied 3.7 percent for the biggest gain since May 2009.

South Korea’s Kospi Index jumped 2.2 percent to a record, while Taiwan’s Taiex Index increased 2 percent. Russia’s benchmark stock index rose 1.6 percent on higher oil, while benchmarks in Poland, Hungary and South Africa rallied at least 1.3 percent.

 Commodities Rally

 The S&P GSCI index of 24 commodities climbed 1.8 percent.Raw sugar rose 4 percent, nickel climbed 4.3 percent and crude oil jumped 2.9 percent to $111.45 a barrel in New York.

 Gold for June delivery rallied as much as 0.8 percent to a record $1,506.50 an ounce.

 The Dollar Index, which tracks the currency against six major peers, tumbled 0.9 percent to 74.351, the lowest since November 2009.

The euro strengthened 1.2 percent to $1.4511, its highest level since January 2010. The pound weakened 0.7 percent versus the euro after minutes from the Bank of England showed policy makers voted 6-3 to keep interest rates on hold this month as the majority said that data on the economy over the previous month had “probably been to the downside.”

Canada’s dollar touched the highest level against its U.S. counterpart since November 2007 as gains in stocks and commodities boosted demand for currencies most-linked to economic growth. The loonie, as the currency is nicknamed, pared gains before a report tomorrow forecast to show the nation’s retail sales rose in February.

The Swedish krona advanced 0.3 percent against the euro after the central bank raised its benchmark repo rate for the sixth time since July, and kept a forecast for coming increases unchanged. Thailand’s baht strengthened 0.4 percent versus the dollar after the Bank of Thailand increased the one-day bond repurchase rate for a third time this year.

 U.S., Europe Bonds

 Treasuries fell, snapping a three-day gain, with the five- year note yield advancing five basis points to 2.11 percent. Thirty-year U.S. bond yields increased three basis points to 4.46 percent. Today’s rally in stocks came even amid linger concern about Europe’s government-debt crisis.The yield on Irish 10-year debt jumped 26 basis points to 10.07 percent, increasing for the sixth day, the longest run of gains since Feb. 15. The Portuguese 10-year yield advanced 19 basis points, climbing for the seventh day, with the Greek yield up 27 basis points.

 The cost of insuring debt sold by Greece and Portugal rose to records, according to traders of credit-default swaps.Contracts on Greece jumped 62 basis points to 1,303 basis points according to closing prices in London, signaling a 67 percent chance of default within five years. Portugal climbed 24 basis points to 636.

 Have a wonderful evening everyone.

 I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.  –Nelson Mandela

Be magnificent!

As ever,

Nishma for Carolann

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

Senior Vice-President &

Senior Investment Advisor