Author: Carolann

Dear Friends,

 

Tangents:

On this day, January 25^th, in 1915, Alexander Graham Bell made the first transcontinental telephone call from New York to San Francisco.

The AT&T long-distance telegraph network begun in 1885 finally reached from New York to San Francisco, allowing Alexander Graham Bell in New York and Thomas J. Watson in San Francisco to participate in the first transcontinental telephone call.

“Four locations participated in the first call. Alexander Graham Bell, inventor of the telephone and co-founder of AT&T, led a group of dignitaries in New York. His one-time assistant Thomas Watson, led a group in San Francisco. AT&T President Theodore Vail spoke from Jekyll Island, Ga. And U.S. President Woodrow Wilson spoke from the White House.

At one point during the call, someone asked Professor Bell if he would repeat the first words he ever said over the telephone. He obliged, picking up the phone and repeating ‘Mr. Watson, come here, I want you.’ To which Watson, in San Francisco, replied, ‘It would take me a week now.’ ”

 

Today:

“E-mail has turned office workers into no more than lab rats desperately craving ‘pellets of social interaction,’ a leading expert has claimed.  Increasing levels of information overload from computer and smart phone screens cause a ‘bottleneck’ in the brain and prevent any deep thought, according to Nicholas Carr, former executive editor of the Harvard Business Review.…The natural impulses that helped early humans find food and avoid predators are causing us to regress to a state no more sophisticated than a rat in a laboratory, he said….For each bit of new information we find our brain releases a dose of dopamine, a pleasure-inducing chemical which has been linked to addictive behavior….’What makes digital messages all the more compelling is their uncertainty.  There’s always the possibility that something important is waiting for us in our inbox,’ Mr. Carr told Esquire magazine.” –fromThe Daily Telegraph

photos of the day

January 25, 2012

A woman walks in a park with a baby in a pram in the southern Russian city of Stavropol.

Eduard Korniyenko/Reuters

Kashmiri boats man paddles his Shikara or traditional gondola in the Dal Lake, on the outskirts of Srinagar, Indian.

Dar Yasin/AP

Market Closes for January 25th, 2012

North American Markets

 

Market Index	Close	Change
Dow Jones	12,758.85	+83.10 +0.66%
S&P 500	1,326.06	+11.41 +0.87%
NASDAQ	2,818.31	+31.67 +1.14%
TSX	12,539.21	+143.97 +1.16%

 

International Markets   Close Change NIKKEI 8,883.69 +98.36 +1.12% HANG SENG 20,110.37 +167.42 +0.84 SENSEX 17,077.18 +81.41 +0.48% FTSE 100 5,723.00 -28.90 -0.50% CAC 40 3,312.48 -10.17 -0.31% DAX 6,421.85 +2.63 +0.04% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.044	2.043
CDN. 30 year bond	2.651	2.646
U.S. 10-year bond	1.9787	1.999
U.S. 30-year bond	3.1346	3.15

 

Currencies

 

BOC Close	Today	Previous
Canadian $	1.0046	1.0108
US $	.9955	.9900

 

Euro  Rate 1 Euro=		Inverse
Canadian $	1.31629	0.75971
US $	1.31029	0.76319

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,711.90	$1,665.10

 

Oil	Close	Previous
WTI Crude Future	$99.82	$99.15

Market Commentary:

Canada

By Matt Walcoff

Jan. 25 (Bloomberg) — Canadian stocks rose the most in three weeks, led by gold producers, after the U.S. Federal Reserve said it will keep its benchmark interest rate at “exceptionally low levels” until at least late 2014.

Barrick Gold Corp., the world’s largest producer of the metal, increased 5.8 percent as the metal advanced. Royal Bank of Canada, the country’s biggest lender by assets, fell 1 percent after the European Central Bank was said to oppose taking losses on its Greek debt holdings. Encana Corp., Canada’s largest natural gas producer, gained 10 percent as the fuel rose for a fourth day.

The S&P/TSX Composite Index climbed 143.97 points, or 1.2 percent, to a four-month high of 12,539.21.

“Gold is always an alternative to the paper currency, and when you’re going to debase and devalue your own currency by cheap, cheap money, all of a sudden people look for another store of value,” Tony Demarin, chief investment officer at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$335 million ($333 million).

The S&P/TSX dropped 1 percent yesterday, its biggest decline this month, as talks to determine how much in losses holders of Greek debt will accept reached a stalemate. The index gained 4.7 percent this month through Jan. 23 as improving employment and manufacturing data in the U.S. overshadowed the European debt crisis.

The U.S. central bank extended its pledge to keep rates low from its previous end of the middle of 2013, citing “low rates of resource utilization and a subdued outlook for inflation.”

The U.S. Dollar Index fell and precious metals rallied after the Fed released its statement. The S&P/TSX Gold Index surged the most since Nov. 30.

Barrick gained 5.8 percent, the most since December 2009, to C$48.60. Goldcorp Inc., the world’s second-largest producer of the metal by market value, advanced 6.4 percent to C$47.71.

Tahoe Resources Inc., which explores for silver in Guatemala, soared 13 percent to C$21.49. Iamgold Corp., which mines in West Africa, South America and Quebec, jumped 9.6 percent, the most since May 2010, to C$17.04.

The eight lenders in the S&P/TSX each dropped after two people familiar with the stance of the ECB’s Governing Council said the central bank is opposed to joining private-sector investors in accepting losses on Greek debt. The people declined to be identified because the matter is confidential.

Royal Bank lost 1 percent to C$53.23. TD, its biggest domestic rival, dropped 0.7 percent to C$78.73. Canadian Imperial Bank of Commerce, the country’s fifth-largest lender by assets, slipped 1 percent to C$76.88.

Mutual-fund company AGF Management Ltd. slumped 4.4 percent to C$16.15 after reporting fourth-quarter earnings that trailed the average analyst in a Bloomberg survey by 23 percent.

Natural gas futures on the New York Mercantile Exchange extended their four-day gain to 18 percent. The fuel has rebounded from the lowest price since 2002 as Chesapeake Energy Corp., the second-largest U.S. producer, said it will cut production and reduce spending Jan. 23.

Encana Corp., the country’s largest natural gas producer, rallied 10 percent, the most since November 2008, to C$20.75.

Enbridge Inc., Canada’s biggest pipeline company, climbed 1.4 percent to C$37.21. Tourmaline Oil Corp., which produces oil and gas in Canada, advanced 6.8 percent to C$24.95 after increasing its production forecast for 2012.

BCE Inc., Canada’s largest phone company, decreased 1.5 percent to C$40.95 after Drew McReynolds, an analyst at Royal Bank, cut his rating on the stock to “sector perform” from “outperform.” Some other telecommunications and media companies in Canada cost less relative to earnings and will grow as fast or faster than BCE, McReynolds said in a note to clients.

BlackBerry maker Research In Motion Ltd. rebounded 8.1 percent to C$16.40 on speculation its 15 percent plunge in the previous three days was overdone. Chief Executive Officer Thorsten Heins, who replaced Jim Balsillie and Mike Lazaridis Jan. 22, said the following day he plans no “drastic change”

at the Waterloo, Ontario-based company.

US

By Rita Nazareth

Jan. 25 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to the highest level since May, as the Federal Reserve signaled low rates through at least late 2014 and didn’t rule out bond purchases to bolster the economy.

A measure of commodity shares in the Standard & Poor’s 500 Index added 1.6 percent after gold rallied as record-low rates may boost its appeal as a hedge against inflation. Banks had the biggest drop in the S&P 500 among 24 groups as the industry may face pressure on margins from the Fed’s policy on rates. Apple Inc. climbed 6.2 percent to an all-time high as profit more than doubled. Textron Inc., the maker of Cessna planes, surged 15 percent after forecasting higher-than-estimated earnings.

The S&P 500 added 0.9 percent to 1,326.06 at 4 p.m. New York time, after dropping 0.5 percent earlier. The Dow gained

83.10 points, or 0.7 percent, to 12,758.85. The Nasdaq-100 Index rose 1.3 percent to 2,465.66, the highest since 2001.

“The Fed is saying that money will stay easy and the cost of money will stay low,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “The ability for businesses to find the money they need to grow and for consumers to find the money they need to buy things is going to be easier. That makes the growth path a little simpler.”

Benchmark gauges reversed losses as the Fed extended its previous pledge to keep rates low at least until the middle of

2013 as more than two years of economic growth have failed to push unemployment below 8.5 percent. Fed Chairman Ben S.

Bernanke said central bankers are still debating additional asset purchases.

Investors also watched earnings reports. Of the 112 S&P 500 companies that reported results since Jan. 9, 74 posted per- share earnings that beat projections, according to data compiled by Bloomberg. Earnings probably grew 3.4 percent for S&P 500 companies in the fourth quarter, the data show. The projection has fallen from 6.2 percent at the end of last year.

The Morgan Stanley Cyclical Index of companies most- dependent on economic growth added 1 percent. The Dow Jones Transportation Average advanced 1.5 percent. All 10 groups in the S&P 500 gained.

Gold producers rallied as the metal climbed to a six-week high. Newmont Mining Corp., the largest U.S. gold producer, jumped 4.8 percent to $60.25. Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, climbed 4.8 percent to $46.08.

Apple rallied 6.2 percent, the most since May 2010, to $446.66. The company sold 37 million iPhones in the period ended Dec. 31, with customers snapping up the new 4S model that went on sale in October, a week after the death of co-founder Steve Jobs. Record revenue vaulted Apple ahead of Hewlett-Packard Co.

as the world’s biggest computer maker by sales and quelled concern that the company’s allure may dim as it embarks on a new era with Chief Executive Officer Tim Cook at the helm.

Textron surged 15 percent, the most in the S&P 500, to $24.76. Chief Executive Officer Scott Donnelly is working to leverage the company’s businesses with measures such as having Cessna and Bell share overseas service centers and sales forces.

Textron is winding down its finance unit, which struggled during the recession.

The Bloomberg U.S. Airlines Index of 11 companies jumped

4.5 percent. Delta Air Lines Inc. and US Airways Group Inc.

reported fourth-quarter profits that topped analysts’

projections. Delta Air climbed 6.2 percent to $9.96. US Airways rallied 17 percent to $7.52.

Illumina Inc. surged 46 percent to $55.15. Roche Holding AG offered $5.7 billion in a hostile bid for Illumina to bolster sales of gene-mapping equipment and services. Roche proposed paying $44.50 a share, 18 percent more than yesterday’s close.

Walter Energy Inc. gained 3.9 percent to $70.14. The company may finally lure buyers willing to bet on a recovery in coal prices with the industry’s cheapest stock. After losing almost half its value in the past year, the producer of steelmaking coal sold for 9.3 times earnings this week, according to data compiled by Bloomberg. That was less than any North American coal-mining company with $1 billion in market capitalization.

Walter Energy, which bought Western Coal Corp. for $5.3 billion in April, is an attractive target because it produces high-grade steelmaking coal, Brean Murray Carret & Co. said. A buyer could spend double Walter Energy’s closing price of $67.54 a share yesterday and still get the company for less relative to earnings than any coal takeover in the past year, data compiled by Bloomberg show.

Banks had the biggest decline in the S&P 500 among 24 industries, falling 0.3 percent. Bank of America Corp. and Citigroup Inc. are among lenders that may find it harder to boost profits and capital after the Fed’s pledge on low rates.

Bank of America rose 0.8 percent to $7.35. Citigroup added 0.2 percent to $29.96.

“This is a very dovish Fed,” David Kelly, who helps oversee $394 billion as chief market strategist for JPMorgan Funds in New York, said in a telephone interview. “It’s an attempt to push down long-term interest rates. They are pushing the rates down to a level where consumers should find them very attractive, but banks will find them very unattractive.”

Corning Inc. tumbled 11 percent, the biggest decline in the S&P 500, to $13.05. The largest maker of glass for flat-panel televisions said glass prices contributed to a 53 percent drop in fourth-quarter profit and are still sinking.

Xerox Corp. slumped 9.9 percent to $7.81. The provider of printers and business services gave earnings forecasts that trailed some analysts’ estimates as Europe weakens.

WellPoint Inc. decreased 4.8 percent to $66.10. The largest U.S. health insurer by enrollment forecast 2012 earnings and reported fourth-quarter profit that were less than analyst estimates on higher medical costs.

“It’s going to be a mediocre earnings season,” Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., said in a phone interview. His firm oversees $3.5 trillion as the world’s largest asset manager. “We’re not going to see robust growth this year and this is being reflected in corporate outlooks.”

 

Have a wonderful evening everyone.

 

Be magnificent!

At our first meeting with beauty, we see it in its gaudy faded finery jarring us with its garish tones,

its frills and flounces, even its deformed shapes.  But when we get to know it better,

the apparent discord reveals itself to us as rhythmic modulation.

At first, we isolate beauty from all that is around it; we detach it from the rest;

but in the end, we understand its harmony with the whole.

-Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the

big choices in life.  Because almost everything, all external expectations, all pride, all fear of embarrassment

or failure – these things just fall away in the face of death, leaving only what is truly important.

Remembering that you are going to die is the best way I know to avoid the trap of thinking you have

something to lose.  You are already naked.  There is no reason not to follow your heart.

-Steve Jobs, 1955-2011, Stanford commencement speech, June 2005

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

Tangents:

–from Globe Life:

Return of the gladiators

“Accountants and bank clerks in Germany’s oldest city have decided to forsake their familiar beer and sausages for tunics and swords instead and have joined the country’s latest sports craze – gladiator dueling….This is no mere re-enactment.  Many of those joining in the fun in Trier’s 2,000-year-old Roman arena end up with bruises and some with a broken nose.  Courses at the gladiator school in the city have been devised with the help of historians to come as close as possible to the practices of ancient Rome.  They combine martial arts training with the wielding of battle axes, swords, spears, daggers and casting nets.  At the beginner’s level, the participants use wooden weapons.  These are replaced with real, albeit blunt ones when the participants have acquired enough skill to prevent serious injuries.”

 

A poem,

 

Memorial

He who was so boastful and anxious

And used to nip home deafened by weapons

To stand in full armour in the doorway

Like a man rushing in leaving his motorbike running

All women loved him

His wife was Andromache

One day he looked at her quietly

He said I know what will happen

And an image stared at him of himself dead

And her in Argos weaving for some foreign woman

He blinked and went back to his work

Hector loved Andromache

But in the end he let her face slide from his mind

He came back to her sightless

Strengthless expressionless

Asking only to be washed and burned

And his bones wrapped in soft cloths

And returned to the ground

 

Extract from ‘Memorial’ by Alice Oswald

photos of the day

January 24th, 2012

Artist Frank Buckley poses in the house he has built out of 1.4 billion euros in decommissioned euro notes from the Irish Central Bank’s mint, in Dublin. Bricks of money make up the walls and shredded bills carpet the ground on the first floor of the empty office building for let on Coke Lane in Smithfield where Buckley has set up camp. He has been building for 12 hours every day, and living on-site since Dec. 1, 2011.

Cathal McNaughton/Reuters

A spider silk shawl, designed by Simon Peers and Nicholas Godley, is seen on display at the Victoria and Albert Museum in London. The shawl is woven and embroidered in Madagascar and is made from the silk of more than a million female Golden Orb Weaver spiders collected in the highlands of Madagascar. The hand-woven textile is naturally golden in color and took over four years to create.

Sang Tan/AP

Market Closes for January 24th, 2012

North American Markets

 

Market Index	Close	Change
Dow Jones	12,675.75	-33.07 -.26%
S&P 500	1,314.63	-1.37 -0.10%
NASDAQ	2,786.64	+2.47 +0.09%
TSX	12,395.24	-126.4660 -1.01%

 

International Markets   Close Change NIKKEI 8,785.33 +19.43 +0.22% HANG SENG 20,110.37 +167.42 +0.84 SENSEX 16,995.77 +244.04 +1.46% FTSE 100 5,751.90 -30.66 -0.53% CAC 40 3,322.65 -15.77 -0.47% DAX 6,419.22 -17.40 -0.27% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.082	2.085
CDN. 30 year bond	2.665	2.665
U.S. 10-year bond	2.0564	2.0511
U.S. 30-year bond	3.1419	3.1297

 

Currencies

 

BOC Close	Today	Previous
Canadian $	1.0108	1.00897
US $	.9900	.99.111

 

Euro  Rate 1 Euro=		Inverse
Canadian $	1.31563	0.76009
US $	1.3025	0.76775

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,665.10	$1,679.20

 

Oil	Close	Previous
WTI Crude Future	$99.15	$99.93

Market Commentary:

Canada

By Matt Walcoff

Jan. 24 (Bloomberg) — Canadian stocks fell for the first time in five days, led by banks, as talks between European finance ministers and holders of Greek debt reached a stalemate.

Toronto-Dominion Bank, the country’s second-largest lender by assets, declined 1.2 percent. Canadian National Railway Co., the country’s largest railroad, dropped 3.9 percent after forecasting a smaller earnings increase this year than most analysts in a Bloomberg survey had estimated. Semiconductor designer Gennum Corp. soared 119 percent after agreeing to be bought by Semtech Corp. for about C$500 million ($494 million).

The S&P/TSX Composite Index slipped 134.15 points, or 1.1 percent, to 12,387.55 at 1:45 p.m. Toronto time after closing at a four-month high yesterday.

“The clock is really ticking for the Greeks,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees about C$1.7 billion. “If it’s finally confirmed that one of the euro members actually defaults, the next question is, ‘Who’s next?’”

The index gained 4.7 percent this month through yesterday as improving employment and manufacturing data in the U.S. overshadowed the European debt crisis. The S&P/TSX slumped 11 percent in 2011 as concern the crisis would hamper global growth led to declines in commodity producers’ shares.

European finance ministers refused to increase their offer of 130 billion euros ($169 billion) in public funds for a second Greek debt program. They sought to make bondholders accept lower interest rates on new bonds than the investors want.

The S&P/TSX Financials Index declined for the first time in seven days. TD lost 1.2 percent to C$79.19. Royal Bank of Canada, its bigger rival, slipped 0.7 percent to C$53.89. Bank of Nova Scotia, Canada’s third-largest lender by assets, decreased 1.3 percent to C$53.85.

Canadian National retreated 3.9 percent to C$76.50 after forecasting earnings of as much as C$5.32 a share, excluding certain items, in 2012. Analysts had estimated profit of C$5.39, according to the average estimate in a Bloomberg survey.

Barrick Gold Corp., the world’s largest gold producer, fell 2.5 percent to C$46.10 after Stephen D. Walker, an analyst at Royal Bank, cut his rating on the shares to “sector perform” from “outperform.” Walker had had an “outperform” rating on Barrick since June 2009.

Alacer Gold Corp., which mines in Turkey, tumbled 7.3 percent to C$10.10 after issuing a 2012 production forecast that trailed the estimate of David Haughton, an analyst at Bank of Montreal.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, dropped 2.6 percent to C$44.73 after Jeffrey Zekauskas, an analyst at JPMorgan Chase & Co., reduced his rating on the stock to “neutral” from “overweight.” In a note to clients, Zekauskas cited the 18 percent gain in the company’s U.S.-traded shares from Dec. 19 to yesterday and a preference for shares of Agrium Inc.

Gennum surged 119 percent, the most since at least 1987, to C$13.44 after Camarillo, California-based Semtech agreed to buy it for C$13.55 a share. Last month, Sterling Partners bought Ottawa-based Mosaid Technologies Inc., which licenses semiconductor patents, for about C$590 million.

Westport Innovations Inc., which develops natural-gas engine technology, rallied 6.4 percent to C$38.15 after closing at a 10-year high yesterday. U.S. President Barack Obama may call for a goal for natural gas production in his State of the Union address today, the Wall Street Journal reported, citing unnamed people familiar with the plans.

US

By Rita Nazareth

Jan. 24 (Bloomberg) — U.S. stocks retreated, ending a five-day advance in the Standard & Poor’s 500 Index, amid a stalemate between European finance ministers and Greek bondholders over how to resolve the nation’s debt crisis.

Travelers Cos., the only insurer in the Dow Jones Industrial Average, sank 3.8 percent as earnings fell.

McDonald’s Corp. slid 2.2 percent as the restaurant chain said foreign-currency fluctuations will cut 2012 profit. Verizon Communications Inc. lost 1.6 percent after the phone company reported a loss. Peabody Energy Corp., the biggest U.S. coal producer, dropped 1.7 percent as earnings missed estimates.

The S&P 500 fell 0.1 percent to 1,314.63 at 4 p.m. New York time, after rising 2.1 percent over the previous five days. The Dow lost 33.07 points, or 0.3 percent, to 12,675.75.

“It’s all about the negotiations of Greek debt,” Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas, said in a telephone interview. His firm oversees $715 billion. “There’s concern that, if it spills over, it undermines some of the progress being made. I’m still not convinced that they solved all of their problems. The next question, of course, is how deep of an impact that will have on corporate earnings and how the markets price that in.”

Global stocks slumped as European finance ministers pushed bondholders to provide greater debt relief for Greece, spurring concern the nation may fail to make a March 20 bond payment. The International Monetary Fund cut its forecast for the global economy. President Barack Obama tonight will lay out what he calls a “blueprint” for revitalizing the economy in his third State of the Union address before a joint session of Congress.

The Federal Reserve began a two-day policy meeting.

The S&P 500 yesterday capped its longest rally since December as data bolstered confidence in the economy and most quarterly reports exceeded forecasts. Of the 74 companies in the S&P 500 that reported results since Jan. 9, 48 posted per-share earnings that beat projections, Bloomberg data show.

Travelers retreated 3.8 percent, the most in the Dow, to $58. The insurer said fourth-quarter profit fell on lower investment income and a smaller reserve benefit, capping the company’s least profitable year since 2004.

McDonald’s declined 2.2 percent to $98.75. The company, which gets about 60 percent of its revenue outside the U.S., said profit may be trimmed as the European debt crisis sinks the region’s currency. Foreign-exchange fluctuations may cut 2012 profit by as much as 18 cents a share and first-quarter earnings by as much as 3 cents, Chief Financial Officer Peter Bensen said today on a conference call.

A measure of phone companies had the biggest loss in the S&P 500 among 10 groups, slumping 1.3 percent. Verizon slid 1.6 percent to $37.79. The second-largest U.S. phone company reported a fourth-quarter loss after booking a pension charge and having higher subsidy costs for rising iPhone sales. On a conference call, Verizon gave a 2012 earnings-forecast range whose bottom trailed analysts’ estimates. AT&T Inc. lost 1 percent to $30.09.

Peabody retreated 1.7 percent to $36.86. The coal producer reported fourth-quarter profit that missed analysts’ estimates because of lower output at its Australian operations.

Zions Bancorporation had the biggest loss in the S&P 500, falling 7.6 percent to $17.15. The Salt Lake City-based bank was cut to “hold” from “buy” at Stifel Nicolaus & Co. after reporting fourth-quarter earnings that missed the average analyst estimate.

Coach Inc. jumped 5.8 percent to $67.97. The largest U.S. luxury handbag maker reported a 15 percent increase in quarterly profit that topped analysts’ estimates, driven by holiday sales in North America as consumer confidence rose to an eight-month high in December.

EMC Corp. advanced 7.3 percent to $25.14 after reporting a 32 percent increase in fourth-quarter earnings as data growth spurs demand for its products and software from majority-owned VMware Inc.

Waters Corp. soared 8 percent, the most in the S&P 500, to $85.04. The maker of laboratory products and instruments posted quarterly profit and sales that beat analysts’ estimates.

Earnings probably grew 3.4 percent for S&P 500 companies in the fourth quarter, according to a Bloomberg survey of analysts.

The projection has fallen from 6.2 percent at the end of last year. The global economy is forecast to grow 2.3 percent in 2012, according to the median projection in a survey of economists, down from the estimate of 3.4 percent in July.

“The market is not terribly disappointed by what appear to be soft earnings compared to where we’ve been,” David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., said in a telephone interview. His firm oversees $600 billion. “There’s a creeping sense of optimism that things are going to improve. That lessens the fear that along with softness in Europe we’ll have a global recession.”

Collective Brands Inc. rallied 6.4 percent to $15.89. The company may extract the biggest takeover premium of any apparel retailer in the world as the maker of Saucony and Sperry Top- Sider shoes lures private equity buyers.

Collective Brands, which said in August it was reviewing options to boost shareholder value, may attract interest from buyout firms and rivals such as Wolverine World Wide Inc. when bids are due next week, according to people familiar with the process. The company, which also owns the Payless ShoeSource chain, could be worth as much as $27 a share based on the value of its separate businesses, Morningstar Inc. said.

While the 87 percent premium would be the largest of any deal in the industry worth at least $100 million, it still allows acquirers to get Collective Brands at half the price of its competitors relative to sales, according to data compiled by Bloomberg. In a breakup, an apparel company could keep the wholesale brands, which boosted sales by 25 percent in the first nine months of 2011, while a private equity firm would run the Payless chain for its cash flow, Auriga USA LLC said.

“On the retail side of the business, this seems like almost a perfect set-up for a private equity company,” R.J. Hottovy, director of consumer research at Chicago-based Morningstar, said in a telephone interview. “The wholesale brands alone would be an attractive acquisition target for any of the major branded footwear players.”

 

Have a wonderful evening everyone.

 

Be magnificent!

A man is a universe in miniature, and the universe, a giant living body;

the cosmos is similar to a large man,

and a man is similar to a small cosmos; so say the Sufis.

-Kabir, 1440-1518

As ever,

 

Carolann

 

Anxiety is the dizziness of freedom.

-Soren Kierkegaard, 1813-1855

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

Went to see the movie The Iron Lady on the weekend.  Meryl Streep’s acting as Margaret Thatcher now, in her advance years wrestling with dementia, and when she was younger, as a politician, and eventually Prime Minister, is just amazing.  She should win another Oscar for this role.

In the Globe & Mail today, there was an article on exercising and the brain.   It is becoming increasingly clear that exercise can prevent Alzheimer’s especially if you’re predisposed to the disease.

It would appear that exercising can also help memory.  Dave McGinn writes,

“The effect of exercise on the brain has become a hot topic in research circles.  Many recent studies have revealed a link between active living and improved memory.

How can exercise improve memory?  Irish scientist may have come up with the answer in a study published last fall in the journal Physiology & Behavior.  Male college students took a memory test and then one half of the volunteers rode an exercise bike until they were exhausted, while the other half sat idle.  Both groups took the test again.  The bike riders did much better, while those who rested showed no improvement.  Those who exercised were found to have increased levels of a protein called brain-derived neurotrophic factor, which promotes the health of nerve cells.

In a 2010 study published in the Proceedings of the National Academy of Sciences, researchers from the University of Cambridge and the National Institute on Aging in Baltimore, Md., found that mice that had access to a running wheel performed nearly twice as well on memory tests than mice with no access.

Moreover, the running mice were found to have grown an average of 6,000 new brain cells per cubic millimeter in the hippocampus, which researchers hypothesized was due to the fact exercise increases blood flow to the brain.”

photos of the day

January 23, 2012

A performer dressed in traditional costume and wearing make-up prepares to take part in Chinese new year celebrations at the 700-year-old Dongyue Temple in Beijing. The temple is the largest of its kind in northern China for the Zhengyi school of Taoism, and was originally built by Taoist monks in the 14th century. The Lunar New Year, or Spring Festival, begins on Jan. 23 and marks the start of the Year of the Dragon, according to the Chinese zodiac.

David Gray/Reuters

Japan Aerospace Exploration Agency astronaut Soichi Noguchi dives in a space suit during a refresher training exercise at the Cosmonaut training center at Star City, outside Moscow.

Sergei Remezov/Reuters

 

Market Closes for January 23rd, 2012

North American Markets

 

Market Index	Close	Change
Dow Jones	12,708.82	-11.66 -.09%
S&P 500	1,316.00	+0.62 +0.05%
NASDAQ	2,784.17	-2.53 -0.09%
TSX	12,521.70	+124.60 +1.01%

 

International Markets   Close Change NIKKEI 8,765.90 -0.46 -.01% HANG SENG Closed SENSEX 16,751.73 +12.72 +0.08% FTSE 100 5,782.56 +54.01 +0.94% CAC 40 3,338.42 +16.92 +0.51% DAX 6,436.62 +32.23 +0.50% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.085	2.064
CDN. 30 year bond	2.665	2.628
U.S. 10-year bond	2.0511	2.0263
U.S. 30-year bond	3.1297	3.1006

 

Currencies

 

BOC Close	Today	Previous
Canadian $	1.00897	1.0126
US $	.99111	.98756

 

Euro  Rate 1 Euro=		Inverse
Canadian $	1.31197	0.76221
US $	1.30031	0.76905

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,679.20	$1,660.60

 

Oil	Close	Previous
WTI Crude Future	$99.93	$98.46

Market Commentary:

Canada

By Matt Walcoff

Jan. 23 (Bloomberg) — Canadian stocks rose to a four-month high, led by energy producers and banks, as oil and gas futures gained and European finance ministers gathered in Brussels to discuss new budget rules and a Greek debt swap.

Encana Corp., the country’s largest gas producer, advanced 7.4 percent as the price of the fuel jumped after Chesapeake Energy Corp. announced immediate output cuts. Minefinders Corp., which produces gold and silver in Mexico, soared 22 percent after agreeing to be bought by Pan American Silver Corp. for C$1.5 billion ($1.49 billion). BlackBerry maker Research In Motion Ltd. declined 9.1 percent after new Chief Executive Officer Thorsten Heins said he doesn’t plan “drastic change.”

The S&P/TSX Composite Index increased 124.60 points, or 1 percent, to 12,521.70 at 4 p.m. Toronto time, the highest level since Sept. 8.

“Natural gas did a 360 today,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview.

The firm oversees about C$1 billion. “You got the first of production cuts. You start to get that people are a little more adventuresome.”

The index climbed each of the last five weeks, the longest streak since October 2010, as U.S. data indicated strengthening employment and manufacturing in the country that bought 75 percent of Canada’s exports in 2010.

Crude oil gained 1.3 percent on the New York Mercantile Exchange after settling at a one-month low Jan. 20. Natural gas rallied the most in two years after Chesapeake said it will “immediately curtail” output of 500 million cubic feet a day and will cut planned spending in gas fields by 70 percent from 2011 levels to $900 million.

Encana advanced 7.4 percent to C$19. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, increased 3.2 percent to C$40.21. PetroBakken Energy Ltd., an oil and gas producer with operations in Canada, climbed 3.4 percent to C$16.28 after saying it received a C$150 million increase to its credit facility.

Pan Orient Energy Corp., which produces oil and gas in Thailand, surged 27 percent to C$3.43 after reporting exploration results. Ithaca Energy Inc., which explores in the North Sea, rallied 14 percent to C$2.84 after saying it received a confidential, non-binding takeover offer.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, advanced 1.4 percent to C$45.93. Some nitrogen fertilizers produced by competitors require natural gas to manufacture. Corn and wheat futures climbed on the Chicago Board of Trade.

The S&P/TSX Financials Index rose for a sixth day, the longest streak in 11 months. Royal Bank of Canada, the country’s biggest lender by assets, gained 1.8 percent to C$54.82.

Toronto-Dominion Bank, its largest domestic rival, advanced 1.3 percent to C$80.17. Manulife Financial Corp., North America’s fourth-biggest insurer, increased 0.9 percent to C$12.76 to extend its monthly rally to 18 percent.

Minefinders surged 22 percent, the most since November 2008, to C$14.06 after Pan American Silver agreed to buy the Vancouver-based company for cash and shares. Pan American slumped 10 percent to C$22.40. Fortuna Silver Mines Inc., which operates in Peru, climbed 11 percent to C$6.28.

B2Gold Corp., which mines in Nicaragua, rose 6.4 percent to C$3.49 after saying production may increase as much as 11 percent this year.

Augusta Resource Corp., which is developing a copper project in Arizona, sank 11 percent, the most since Sept. 30, to C$2.89 after the U.S. Environmental Protection Agency called for a review of the project’s draft Clean Water Act permit.

RIM tumbled 9.1 percent to C$15.67 after Heins announced no significant strategy changes on a conference call. Heins replaced former co-CEOs Jim Balsillie and Mike Lazaridis today after shares of the Waterloo, Ontario-based company plunged 75 percent last year.

US

By Rita Nazareth

Jan. 23 (Bloomberg) — The Standard & Poor’s 500 Index rose for a fifth day, capping its longest rally since December, as energy and bank shares advanced and investors weighed developments in Europe’s efforts to tame its debt crisis.

Chesapeake Energy Corp. surged 6.3 percent, pacing gains in energy companies, as the second-largest U.S. natural-gas producer said it will cut production and reduce spending. Bank of America Corp. added 2.6 percent as Chief Executive Officer Brian T. Moynihan said the lender may reduce annual costs by as much as an additional $3 billion. Procter & Gamble Co. slumped

1.9 percent after Stifel Nicolaus & Co. cut its recommendation for the largest consumer-products company.

The S&P 500 added 0.1 percent to 1,316 at 4 p.m. New York time, gaining 2.1 percent in five days. The Dow Jones Industrial Average declined 11.66 points, or 0.1 percent, to 12,708.82, after earlier rising above the highest closing level since May.

“The bulls were able to flex their muscles a bit and the bears can’t really point to a whole lot of tangible news that’s really going to change matters much,” Hayes Miller, who helps oversee about $43 billion as the Boston-based head of asset allocation in North America at Baring Asset Management Inc., said in a telephone interview. “There’s a general relief about U.S. growth and Europe’s ability to solve its debt crisis. I don’t really buy into the overbought argument that much.”

The S&P 500 rose all four days U.S. exchanges were open last week as data bolstered confidence in the economy and companies from Goldman Sachs Group Inc. to Union Pacific Corp.

topped analysts’ income projections. Of the 52 companies in the S&P 500 that reported results since Jan. 9, 34 posted per-share earnings that beat projections, Bloomberg data show.

Equities turned lower early today after the S&P 500 reached 1,322.28, a level close to a downward trendline connecting the index’s all-time high in 2007 with its peak last year in April and its May and July highs, according to Ari Wald, a New York- based technical strategist at Brown Brothers Harriman & Co.

The index’s 14-day relative strength index, which measures the degree that gains and losses outpace each other, has stayed above 65 since Jan. 17, matching the longest streak since February, according to Bloomberg data. Some technical analysts consider RSI readings above 70 a sign that stocks have risen too far, too fast.

Germany and France said talks between Greece and bondholders on negotiations for a debt swap were making progress, while an official in Berlin said Germany may be open to combining Europe’s two bailout mechanisms and boosting their funding limit. Finance ministers meeting in Brussels today agreed on all aspects of the European Stability Mechanism in a deal to be signed on Jan. 30, Martti Salmi, an aide at Finland’s Finance Ministry in Helsinki, said by telephone.

A gauge of energy shares had the biggest gain in the S&P 500 among 10 groups, rising 0.7 percent. Chesapeake plans to cut output, idle drilling rigs and reduce spending in gas fields by 70 percent after prices for the fuel hit a 10-year low. Natural gas soared today, while Chesapeake surged 6.3 percent to $22.28.

Cabot Oil & Gas Corp. increased 6.5 percent to $65.08.

Range Resources Corp. added 9.2 percent to $59. Southwestern Energy Co. jumped 10 percent to $32.46. The oil and gas company was raised to “outperform” from “market perform” at BMO Capital Markets.

Financial stocks in the S&P 500 swung between gains and losses today before closing 0.3 percent higher.

Bank of America jumped 2.6 percent, the biggest gain in the Dow, to $7.25. The lender, which already targeted $5 billion in expense cuts from retail and back-office operations, may reach total savings of $6 billion to $8 billion a year, Moynihan said during a Jan. 19 employee meeting.

Procter & Gamble fell 1.9 percent, the second-most in the Dow, to $65. The company was lowered to “hold” from “buy” at Stifel Nicolaus.

Netflix Inc. sank 6.3 percent to $93.96. The owner of the streaming and DVD-by-mail service is likely to provide a first- quarter forecast that’s “well below” analysts’ estimates, according to Wedbush Securities.

Research In Motion Ltd. tumbled 8.5 percent to $15.56. The BlackBerry maker shook up its top management, replacing co-Chief Executive Officers Jim Balsillie and Mike Lazaridis, who guided the company for two decades and struggled to compete against Apple Inc. Thorsten Heins, a chief operating officer who joined RIM four years ago from Siemens AG, will replace the pair in the CEO post effective immediately.

Trading in U.S. stocks fell to the lowest level since at least 2008 amid mutual fund withdrawals and Wall Street job cuts.

An average of 6.69 billion shares changed hands on U.S. exchanges in the 50 days ended Jan. 18, the fewest on record in Bloomberg data starting three years ago that excludes over-the- counter venues. On the New York Stock Exchange, volume has tumbled to the lowest level since 1999, the data show.

The slowdown in trading shows that investors remain skittish after five years of withdrawals from mutual funds that buy U.S. equities and one of the most volatile years on record for the Standard & Poor’s 500 Index. While the benchmark index is having its best January rally since 1997, securities firms around the world cut more than 200,000 jobs last year.

“Investor confidence is shaky at the very least,” Mark Turner, head of U.S. sales trading at Instinet Inc. in New York, said in a telephone interview on Jan. 20. His firm handles about

4 percent of the total daily U.S. equity volume. “We need to see the U.S. economy improve. We need to see some sort of a plan in place to deal with Europe’s debt crisis before the market gains some confidence. At that point, we’ll start to see an increase in volume.”

 

Have a wonderful evening everyone.

 

Be magnificent!

In this world there are two orders of being,

the perishable and the imperishable.

The perishable is all that is visible.  The imperishable

is the invisible substance of all that is visible.

The Bhagavad Gita

As ever,

 

Carolann

 

 

It’s all trial and error, friends,

Trial and error…

-Sarah Burke, 1982-2012

A tweet on Jan. 6

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

 

The weather has been the hot topic this week.  A friend who lives in West Vancouver told me this morning she was taking the afternoon off to go tobogganing on Grouse Mountain.   Sounds like a great way to spend a Friday afternoon to me.

 

The artist Andrew Millner wrote in Speak for the Trees:

What is “NATURE”?  What is “NATURAL”?  These questions are increasingly more difficult to answer as the borders between the natural and the artificial blur.   In my work I have notated the simple outlines of leaves, branches, and limbs, by hand-drawing their outlines with an electronic pen and tablet.  The drawing is a collection of moments…thousands of casual, quick outlines that transform a botanical world into a mathematical language of line.

The final drawing is culled from looking at the tree in different seasons, at different scales, and from multiple points of view.  These digital tools facilitate greater intimacy and prolonged time for investigation.  Paradoxically, they suggest evidence of our estrangement from the natural.

 

The realm of the born – all that is nature – and the realm of the

made – all that is humanly constructed – are becoming one.

Machines are becoming biological and the biological is becoming

engineered.

-Kevin Kelly

photos of the day

January 20, 2012

A thick coat of ice is seen on tree branches in Tacoma, Wash. Thick ice brought down trees and power lines in the region overnight, following two days of snow and ice storms. A powerful Pacific Northwest storm knocked out power to about 250,000 electric customers around Seattle, Tacoma, and Olympia after it coated much of Washington in ice and swelled Oregon rivers.

Ted S. Warren/AP

A butterfly rests on a flower petal at a park in Hyderabad, India.

Mahesh Kumar A./AP

 

Market Closes for January 20th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	12,720.48	+96.50  +0.76%
S&P 500	1,315.38	+0.88  +0.07%
NASDAQ	2,786.70	-1.63  -0.06%
TSX	12,397.10	+16.41  +0.13%

 

International Markets

 

	Close	Change
NIKKEI	8,766.36	+126.68  +1.47%
HANG SENG	20,110.37	+167.42  +0.84%
SENSEX	16,739.01	+95.27  +0.57%
FTSE 100	5,728.55	-12.60  -0.22%
CAC 40	3,321.50	-7.44  -0.22%
DAX	6,404.39	-11.87  -0.18%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.064	2.008
CDN. 30 year bond	2.628	2.572
U.S. 10-year bond	2.0263	1.9700
U.S. 30-year bond	3.1006	3.0313

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	1.0126	1.0120
US   $	.98756	.98815

 

Euro Rate  1 Euro=		Inverse
Canadian $	1.30919	0.76383
US  $	1.29290	0.77346

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,660.60	$1,655.30

 

Oil	Close	Previous
WTI Crude Future	$98.46	$100.39

Market Commentary:

Canada

By Matt Walcoff

Jan. 20 (Bloomberg) — Canadian stocks rose, completing a fifth-straight weekly gain, as financial companies advanced after the country reported slower inflation.

Royal Bank of Canada, the country’s largest lender by assets, climbed 1.4 percent after the country reported prices climbed less in 2011 than all 23 economists in a Bloomberg survey had forecast. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, decreased 5.7 percent after a private report indicated manufacturing contracted in China.

The S&P/TSX Composite Index increased 16.41 points, or 0.1 percent, to 12,397.10, extending the weekly gain to 1.4 percent.

“All of the news in terms of inflation under control, the general economy getting better, that erases the pressure of lower margins for the banks,” Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview. The firm oversees about C$1.7 billion ($1.7 billion).

The S&P/TSX has posted the longest streak of weekly gains since October 2010 as data have shown stronger employment and manufacturing in the U.S. Seventy-five percent of Canada’s exports went to the U.S. in 2010, according to Statistics Canada.

The S&P/TSX Financials Index rose for a fifth day, the longest streak since July, after Statistics Canada said the country’s year-over-year inflation rate slowed to 2.3 percent in December from 2.9 percent in November. The Canadian dollar fell for the first time this week against the U.S. currency.

Royal Bank increased 1.4 percent to C$53.85. Toronto- Dominion Bank, the country’s second-largest lender by assets, advanced 1.2 percent to C$79.15. Manulife Financial Corp., North America’s fourth-biggest insurer, climbed 2.6 percent to C$12.65 capping its fifth-straight weekly gain.

A purchasing managers’ index released by HSBC Holdings Plc and Markit Economics indicated manufacturing contracted for a third month in China, the world’s largest user of industrial metals. Copper futures fell for the first time this week on the Comex in New York.

Base-metals and coal producers in the S&P/TSX retreated the most this month. First Quantum slumped 5.7 percent to C$22.55.

Lundin Mining Corp., which produces base metals in Europe, declined 4 percent to C$5.09.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 1.8 percent to C$45.28 after Lindsay Drucker Mann, an analyst at Goldman Sachs Group Inc., said a proposed reduction in Indian subsidies may hurt the company. The country’s government plans to reduce payments for potash and phosphorus fertilizers because prices of the nutrients may decline, Hindu Business Line reported Jan. 18 without citing anyone.

B2Gold Corp., which mines in Nicaragua, surged 6.5 percent to C$3.28 after reporting drilling results from its Primavera project.

Niko Resources Ltd., which produces oil and gas in South Asia, rose 5.3 percent to C$53.37 extend its three-day rally to 13 percent. The company said Jan. 17 it signed a $250 million credit facility with Royal Bank and Bank of Nova Scotia.

New Zealand Energy Corp., which explores for oil and gas in that country, soared 18 percent to C$1.71 after Bill Newman, an analyst at Mackie Research Capital Corp., began coverage of the Vancouver-based company with a “speculative buy” rating. The closing price was the highest since the company’s initial public offering in August.

US

By Rita Nazareth

Jan. 20 (Bloomberg) — Most U.S. stocks rose, erasing a loss for the Standard & Poor’s 500 Index in the final minutes of trading, as banks gained and results from International Business Machines Corp. to Intel Corp. boosted technology shares.

JPMorgan Chase & Co. and Bank of America Corp. added at least 1.1 percent. IBM, Intel and Microsoft Corp. rose more than 2.9 percent as results beat projections. General Electric Co.

closed unchanged, rebounding from a 2.5 percent slump, as profit topped estimates while sales were curbed by Europe. Google Inc. tumbled 8.4 percent as earnings missed projections. American Express Co. slid 1.8 percent on lower-than-forecast sales.

Seven stocks gained for every five falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose 0.1 percent to 1,315.38, extending its gain since Jan. 13 to 2 percent. The index rose for a third week, capping the longest streak since October. The Dow Jones Industrial Average climbed 96.50 points, or 0.8 percent, to 12,720.48. IBM, which comprises 11 percent of the share-price weighted Dow, added 60.55 points to the index.

“It’s a mixed bag of earnings,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $85 billion, said in a telephone interview.

“Earnings growth is going to decline, but that’s already built into the market to a certain extent. If earnings don’t collapse, it won’t be a problem.”

S&P 500 companies, which beat profit estimates in the previous 11 quarters, will report a 3.4 percent increase in per- share earnings during the September-December period, analysts’ forecasts compiled by Bloomberg show. Of the 51 companies in the S&P 500 that reported results since Jan. 9, 33 posted per-share earnings that beat projections, Bloomberg data show.

Sales of previously owned U.S. homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum. Greek officials and private creditors entered a third day of negotiations on a debt swap deal that’s crucial to lowering the country’s borrowings and freeing up a second round of international aid.

Financial shares had the biggest gain among 10 S&P 500 groups, adding 0.7 percent. JPMorgan rose 1.2 percent to $37.36.

Bank of America advanced 1.6 percent to $7.07.

“The upturn is around the corner,” Chris Hyzy, the New York-based chief investment officer at U.S. Trust Co., which oversees about $325 billion, said in a telephone interview. The rebound in banks “is a good sign. The financials have become a more stable sector. That’s the first sign that within six to nine months you could start to see the turnabout in the financial sector.”

IBM gained 4.4 percent to $188.52 after forecasting 2012 earnings that beat analysts’ estimates as fourth-quarter profit rose 4.4 percent because of rising software demand.

Intel increased 2.9 percent to $26.38. The chipmaker predicted first-quarter revenue that may top analysts’ estimates, signaling that the shortage of disk drives that throttled personal computer production may be ending.

Microsoft added 5.7 percent to $29.71. The company’s Xbox business got a boost from Christmas shoppers, who snapped up its video-game consoles and Kinect sensor controllers, and signed up for the Xbox Live online service.

GE closed unchanged at $19.15. Profit topped estimates after the company’s industrial order backlog rose to a record $200 billion even as weaker demand in Europe hindered sales in health care.

Google tumbled 8.4 percent to $585.99. Chief Executive Officer Larry Page is moving into new markets to ignite growth outside Google’s traditional search-based business. That effort contributed to an 8 percent drop in the average price Google gets when users click an ad, because it charges less for ads on mobile devices and in emerging markets, said Herman Leung, an analyst at Susquehanna Financial Group.

American Express lost 1.8 percent to $50.04. The company reported fourth-quarter revenue of $7.74 billion, missing the average analyst projection of $7.9 billion, data compiled by Bloomberg show. Profit excluding some items beat analysts’ estimates as card spending reached a record.

Capital One Financial Corp. slumped 5.6 percent to $46.03.

The credit-card issuer seeking approval to purchase ING Groep NV’s U.S. online bank said fourth-quarter profit fell 42 percent as expenses rose.

Fifth Third Bancorp sank 2.9 percent to $13.17. Ohio’s largest lender reported fourth-quarter sales of $1.46 billion, missing the average analyst estimate of $1.52 billion, data compiled by Bloomberg show.

U.S. stocks are caught in “a vicious circle” of slower trading and bigger swings in prices, according to Pierre Lapointe, Brockhouse & Cooper Inc.’s global macro strategist.

Trading for the 50 days ended yesterday was the slowest since at least 2008, when Bloomberg started compiling the data, at 6.67 billion shares a day.

Similar averages for companies in the S&P 500 and the Dow declined this week to the lowest levels since 1999 and 2000, respectively, according to Bloomberg’s figures. They reflect trading totals for each stock on the New York Stock Exchange or Nasdaq Stock Market, depending on where it’s listed.

“Getting in or out of a stock causes more price variation” because fewer shares are trading, Lapointe and Alex Bellefleur, a financial economist, wrote yesterday in a report from their Montreal-based firm. “This increases volatility.”

The Chicago Board Options Exchange Volatility Index, or the VIX, closed above 20 for almost six months before dropping below the threshold yesterday. The time period was the longest for the benchmark gauge of U.S. stock options since 2009.

 

Have a wonderful weekend everyone.

 

Be magnificent!

The lamp is empty; the oil is used up.

The tambourine is dead, the dancer lies down,

The fire is out, and no smoke rises from it.

The soul is absorbed into the Unique, and there is no longer a duality.

~ Kabir,1440-1518

As ever,

 

Carolann

 

Beware the fury of the

patient man.

-John Dryden, 1631-1700

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

Senior Vice-President &

Senior Investment Advisor

Tangents:

I read an interview with Pierre Dukan, the diet guru (since Carole Middleton told a journalist that she followed his high-protein diet, sales of his book have soared in the UK, North America and even China) in the Financial Times last night. Can’t say I agree with him. However it is the time of year to check resolutions. This is interesting:

Lessons from a 16^th-century dieting bestseller

One of the most successful diet books, The Art of Living Long by a Venetian merchant named Luigi Cornaro (1464-1566), is still in print more than 450 years after it was first published in Padua in 1558.

It was an instant success, went through many editions, and was translated into many languages. Contemporaries such as Elyot, Boorde, Vaughan and Markham, concerned with what they perceived to be the problem of excessive eating and drinking, had read Cornaro’s “admirable diet”, a diet not far removed from the simple peasant food they all advocated.

A 1903 edition of The Art of Living Long was still advising its readers to take good heed of Cornaro’s work, and recommending the spirit of his approach, if not his life-and-death method, the strictness of which could, as today’s neurobehaviourists recognize, sometimes backfire….The first rule of Cornaro’s diet is to regain self-control. Gluttony, he believed, was not merely a personal sin but also a killer. He saw it as an almost apocalyptic force: it “kills every year…as great a number as would perish during the time of a most dreadful pestilence, or by the sword or fire of many bloody wars.” Citing the ancients, Galen Hippocrates, Plato and Cicero, he insisted with the zeal of a convert, on living a regular life with moderation…Physic , or medicine, was, for the most part, nothing but a substitute for the actual weight loss necessities of exercise and temperance.

People should eat little and frugally (today’s calorie restrictors are Cornaro’s direct dieting descendants) he advised, and he recommended a diet consisting of 12oz a day in bread, soups, yolks of new-laid eggs, meat, plus about 14oz of wine.

 

Extracted from ‘Calories and Corsets by Louise Foxcroft, published this month by Profile Books.

 

photos of the day

January 19, 2012

The Houses of Parliament are seen in early morning mist in central London.

Stefan Wermuth/Reuters

Ukrainians dance during celebration to mark the Epiphany in Kiev, Ukraine. Orthodox believers celebrate the holiday of the Epiphany on Jan. 19, and traditionally bathe in holes cut through thick ice on rivers and ponds to cleanse themselves with water deemed holy for the day.

Sergei Chuzavkov/AP

 

Market Closes for January 19th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	12,623.98	+45.03  +0.36%
S&P 500	1,314.50	+6.46  +0.49%
NASDAQ	2,788.33	+18.62  +0.67%
TSX	12,380.69	+53.17  +0.43%

 

International Markets

 

	Close	Change
NIKKEI	8,775.19	+224.61  +2.63%
HANG SENG	19,942.95	+256.03  +1.30%
SENSEX	16,643.74	+192.27  +1.17%
FTSE 100	5,741.15	+38.78  +0.68%
CAC 40	3,328.94	+64.01  +1.96%
DAX	6,416.26	+61.69  +0.97%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.008	1.957
CDN. 30 year bond	2.572	2.528
U.S. 10-year bond	1.9700	1.8966
U.S. 30-year bond	3.0313	2.9554

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	1.0120	1.0127
US   $	.98815	.98886

 

Euro Rate  1 Euro=		Inverse
Canadian $	1.31227	0.76204
US  $	1.29649	0.77131

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,655.30	$1,660.80

 

Oil	Close	Previous
WTI Crude Future	$100.39	$101.04

Market Commentary:

Canada

By Ksenia Galouchko

Jan. 19 (Bloomberg) — Canadian stocks rose for a second day, led by financial and energy companies, as Bank of America Corp. reported a profit and U.S. unemployment claims fell to the lowest level in almost four years.

Bank of Nova Scotia, Canada’s third-largest bank, gained 2.6 percent after saying it is considering a sale of its Scotia Plaza office tower. PetroBakken Energy Ltd. increased 3.9 percent after selling an asset for C$105 million ($104 million).

Teck Resources Ltd., Canada’s largest copper producer, rallied 3.6 percent as the metal rose on prospects of demand from China.

The S&P/TSX Composite Index rose 44.07 points, or 0.4 percent, to 12,371.59 at 1:46 p.m. Toronto time.

“Investors are feeling a little bit more confident in the outlook for the financials,” Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto, said in a phone interview. “They have been a harbor for the investors.”

The index climbed 0.8 percent in the two weeks ended yesterday as base-metals producers and financial companies gained as Goldman Sachs Group Inc. reported better-than-forecast earnings and copper imports to China rose to a record. The S&P/TSX trailed the S&P 500 last year for the first time since 2003 as drops in commodity prices held back the Canadian stock benchmark gauge.

S&P/TSX banks rose after Bank of America, the second- largest U.S. lender by assets, swung to a fourth-quarter profit and Morgan Stanley reported a smaller fourth-quarter loss than analysts estimated. The U.S. Labor Department reported jobless claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008.

Royal Bank of Canada, the country’s biggest lender by assets, gained 1 percent to C$52.96, after rising to C$53.18, the highest intraday price since July 22. Toronto-Dominion Bank, the country’s second-largest lender, increased 1.5 percent to C$78.45. National Bank of Canada gained 2.2 percent to C$75.55 after advancing to C$75.71, the highest intraday price since July 28.

Bank of Nova Scotia gained 2.6 percent to C$53.92 after rising to C$54.07, the highest intraday price since Sept. 27.

Canada’s third-largest bank said it is considering a sale of its Scotia Plaza office tower, one of the largest skyscrapers in Toronto’s financial district.

Financial companies comprise 28 percent of Canadian equities by market value, the most of any 10 industry groups, according to Bloomberg data.

PetroBakken Energy gained 3.9 percent to C$15.56 and rose to C$15.87 earlier, the highest intraday price since June 6, after selling its interest in the southeast Saskatchewan Weyburn unit to an undisclosed buyer. The shares were raised to “outperform” from “sector perform” at Alta Corp Capital Inc.

Petrobank Energy & Resources Ltd., the majority owner of PetroBakken, advanced 5.4 percent to C$13.75.

Bankers Petroleum Ltd. rallied 3.5 percent to C$5.38 after rising as much as 4 percent earlier, after Tudor Pickering said it sees the company as “viable” acquisition target.

Copper increased to a 17-week high in New York on speculation China will ease credit controls as growth slows, potentially bolstering demand prospects in the world’s largest user of the metal. Copper imports into China rose to a record and fourth-quarter economic growth in the country topped economists’ estimates, figures showed this month.

“The sentiment in respect to the growth in China seems to be a driving force in the Canadian market and the commodities gains,” Sprung said. “Any sign that growth there won’t contract is taken as a positive sign.”

Lundin Mining Corp., which produces base metals in Europe, climbed 2.6 percent to C$5.17, after rising to C$5.23, the highest intraday price since Sept. 8.

Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi project in Mongolia, rallied 1.5 percent to C$19.60. Teck Resources rallied 3.6 percent to C$42.38.

HudBay Minerals Inc., which mines copper, gold and zinc, rallied 4.2 percent to C$11.46.

Finning International Inc. rose 3.3 percent to C$26.97 after climbing to C$27.27, the highest intraday price since Aug.

2. The world’s biggest Caterpillar dealer had its rating raised to “outperform” from “market perform” at Raymond James Financial Inc.

Grande Cache Coal Corp. fell 6.5 percent to C$9.28 after dropping 12 percent, the most since October. The Calgary-based coal producer fell after Winsway Coking Coal Holdings Ltd., a Chinese miner that agreed to buy Grande Cache in October, was targeted by a short seller. Winsway, which denied the allegations by Jonestown Research that it imported less coal than reported, declined 8.6 percent in Hong Kong.

A gauge of gold stocks in the S&P/TSX fell for a third day as the declined from a five-week high after the drop in the unemployment benefits claims revived prospects for economic growth and eroded the appeal of precious metals as a hedge.

Barrick Gold Corp. fell 3.2 percent to C$46.98 after declining to C$46.96 earlier, the lowest intraday price since Jan. 3. Kinross Gold Corp., Canada’s third-largest gold producer, tumbled 3.6 percent to C$10.16 after falling to C$10.10, the lowest price since 2008.

North American Palladium Ltd. fell 10 percent to C$2.42, declining to C$2.35 earlier, the lowest intraday price since Oct. 6

US

By Rita Nazareth

Jan. 19 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a third straight day, as Bank of America Corp. rallied after swinging to a profit and jobless claims plunged to the lowest level in almost four years.

Bank of America, the second-largest U.S. lender, climbed 2.4 percent. Morgan Stanley added 5.4 percent after the owner of the largest brokerage reported a smaller-than-estimated loss.

Union Pacific Corp. jumped 2.2 percent to the highest level since 1980 as the biggest U.S. railroad’s profit beat forecasts.

Eastman Kodak Co. tumbled 46 percent in over-the-counter trading after the photography pioneer filed for bankruptcy.

The S&P 500 added 0.5 percent to 1,314.50 at 4 p.m. New York time. The Dow Jones Industrial Average gained 45.03 points, or 0.4 percent, to 12,623.98. The Nasdaq-100 Index rose 0.7 percent to 2,441.70, the highest level since 2001. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses in the S&P 500, declined below 20 for the first time since July.

“There has been some relief that financials might be along for the ride,” Brian Jacobsen, who helps oversee about $209 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said in a telephone interview. “A lot of the pessimism has been baked into the cake. We’re more likely to see positive surprises.”

Of the 35 companies in the S&P 500 that reported results since Jan. 9, 22 posted per-share earnings that beat projections, according to data compiled by Bloomberg. The S&P 500 has gained 4.5 percent so far in 2012, the most since it rose 4.8 percent over the first 12 days in 1997, according to data compiled by Bloomberg.

Today’s rally in stocks was helped by optimism that the U.S. economy will be able to weather Europe’s debt crisis.

Claims for jobless benefits last week dropped to the lowest level since April 2008, pointing to an improvement in the U.S. job market that may help bolster spending in the new year.

“We’re in a fragile economy, we’re not going to have robust growth, but it’s going to take us a lot of things to derail,” Richard Weeks, the Vienna, Virginia-based managing director and partner at HighTower’s VWG Wealth Management. His firm oversees about $20 billion. “You’ve seen big corporations navigate through very difficult times.”

The Dow Jones Transportation Average, a proxy for the economy, increased 1.6 percent. Gauges of diversified financial and transportation shares added at least 1.5 percent, leading the gains among 24 industries in the S&P 500.

Bank of America rallied 2.4 percent, the most in the Dow, to $6.96. Chief Executive Officer Brian T. Moynihan is cutting assets, expenses and staff while raising capital to meet demands from regulators for a larger cushion against unexpected losses.

Morgan Stanley climbed 5.4 percent to $18.28. Morgan Stanley posted the only increase in trading revenue excluding accounting gains among the five largest Wall Street banks in 2011, making progress toward Chairman and Chief Executive Officer James Gorman’s goal of boosting market share.

Union Pacific gained 2.2 percent to $112.18. Carloads advanced 3 percent in the quarter, with auto and chemical shipments leading gains as a strengthening recovery boosted demand. Energy and industrial products deliveries also rose.

EBay Inc. jumped 3.9 percent to $31.51. The largest Internet marketplace reported sales and profit that topped analysts’ estimates, buoyed by a campaign to promote its expanded retail offerings and broader use of the PayPal online- payments service.

Some of the largest technology companies reported results after the market closed today.

Intel Corp., the biggest chipmaker, predicted revenue that may top estimates. International Business Machines Corp., the largest computer-services provider, and Microsoft Corp., the biggest software maker, reported earnings that beat forecasts.

Google Inc., owner of the most popular Internet search engine, reported revenue that fell short of analysts’ projections.

Intel rose 0.4 percent to $25.73, while IBM added 2.5 percent to $185.01, and Microsoft jumped 1.8 percent to $28.62 at 5:09 p.m. New York time. Google tumbled 8.5 percent to

$585.26 after the close of regular trading.

Sears Holdings Corp. advanced 9.8 percent to $43.35 following a report that CIT Group Inc. will approve financing for the retailer’s vendors as soon as today. CIT is looking for more detailed information on Sears’s financing and may require letters of credit for all orders, Women’s Wear Daily reported, citing unidentified people familiar with the plan. CIT is the largest U.S. company that provides what’s known as factoring.

Credit Suisse Group AG’s Andrew Garthwaite lifted his 2012 forecast for the S&P 500 to 1,400, citing the European Central Bank’s refinancing plans for banks as a “potential game changer.” Garthwaite, the London-based global equity strategist at the firm, had previously estimated the benchmark gauge for U.S. equities would climb to 1,340 at the end of 2012.

Eastman Kodak Co. slumped 46 percent to 30 cents in over- the-counter trading. The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S.

Bankruptcy Court in Manhattan. The company’s stock symbol changed today to “EKDKQ” from “EK.”

Johnson Controls Inc. plunged 8.8 percent to $32.46. The largest U.S. auto supplier lowered its forecast for profit for the fiscal year on weakening demand for replacement batteries and a reduced outlook for vehicle assembly in Europe.

Solar companies slumped after Germany said it will make monthly subsidy cuts to slow demand for panels in the country, the world’s largest market. Suntech Power Holdings Co., the biggest solar-panel maker, fell 14 percent to $3.20. First Solar Inc. declined 10 percent to $38.70.

 

Have a wonderful evening everyone.

 

Be magnificent!

There are thousands of lives in one single life.

-Swami Prajnanpad,1891-1974

As ever,

 

Carolann

 

Life is occupied in both perpetuating itself and in

surpassing itself. If all it does is maintain itself,

then living is only not dying.
-Simone de Beauvoir, 1908-1986

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

 

Tangents:

A couple of interesting things reported today in the science world:

“Scientists confirmed on Tuesday that 15 pounds of rock collected recently in Morocco fell to Earth from Mars during a meteorite shower last July. This is only the fifth time in history scientists have chemically confirmed Martian meteorites that people witnessed falling. The fireball was spotted in the sky six months ago, but the rocks weren’t discovered on the ground in North Africa until the end of December.”

“British scientists have found scores of fossils that evolutionary theorist Charles Darwin and his peers collected but that had been lost for more than 150 years. Dr. Howard Falcon-Lang, a paleontologist at Royal Holloway, University of London, said Tuesday that he stumbled upon the glass slides containing the fossils in an old wooden cabinet that had been shoved in a ‘gloomy corner’ of the massive, drafty British Geological Survey.”

 

photos of the day

January 18, 2012

Ballerinas from the Paris Opera Ballet of France dance during the full dress rehearsal for “Giselle” at the Esplanade Theatre in Singapore Jan. 18, 2012. The ballet will be performed from Jan. 19 – 21.

Chrystalleni Trikomiti of Cyprus competes at the International Rhythmic Gymnastics event in east London. The competition is part of the testing programme for the London 2012 Olympic Games, called ‘London Prepares’.

Eddie Keogh/Reuters

Market Closes for January 18th, 2012

North American Markets

 

Market Index	Close	Change
Dow Jones	12,578.95	+96.88 +0.78
S&P 500	1,308.04	+14.37 +1.11%
NASDAQ	2,769.71	+41.63 +1.53%
TSX	12,327.52	+94.69 +0.77%

 

International Markets

 

	Close	Change
NIKKEI	8,550.58	+84.18 +0.99%
HANG SENG	19,686.92	+59.17 +0.30%
SENSEX	16,451.47	-14.58 -0.09%
FTSE 100	5,702.37	+8.42 +0.15%
CAC 40	3,264.93	-5.06 -0.15%
DAX	6,354.57	+21.64 +0.34%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	1.957	1.918
CDN. 30 year bond	2.528	2.502
U.S. 10-year bond	1.8966	1.8566
U.S. 30-year bond	2.9554	2.9000

 

Currencies

 

BOC Close	Today	Previous
Canadian $	1.0127	1.0137
US $	.98886	.98653

 

Euro Rate 1 Euro=		Inverse
Canadian $	1.29981	0.76934
US $	1.28533	0.77801

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,660.80	$1,652.30

 

Oil	Close	Previous
WTI Crude Future	$101.04	$100.94

Market Commentary:

Canada

By Matt Walcoff and Ksenia Galouchko

Jan. 18 (Bloomberg) — Canadian stocks rose, led by energy and financial companies, as the International Monetary Fund proposed increasing funds to contain the European debt crisis and U.S. factory production climbed.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1.9 percent as the IMF proposed as much as $500 billion more in lending capacity to help insulate the global economy.

National Bank of Canada rallied 1.4 percent. BlackBerry maker Research In Motion Ltd. dropped 3.8 percent after Samsung Electronics Co. said it won’t buy the company. TransCanada Corp., owner of the Keystone XL pipeline, fell 1.7 percent after people familiar with the matter said the Obama administration will reject the project.

The S&P/TSX Composite Index rose 79.81 points, or 0.7 percent, to 12,312.64 at 1:22 p.m. Toronto time.

“Efforts are at least under way to stabilize the European situation — that’s encouraging,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, said in a phone interview. “We are generally seeing positive economic numbers.

The manufacturing increase was very strong and suggests that the U.S. economy is recovering.”

Factories in the U.S. churned out more computers, cars and construction material in December as manufacturing remained at the center of the expansion. Output climbed 0.9 percent last month, the biggest gain since December 2010, according to Federal Reserve data issued today in Washington.

The S&P/TSX climbed 0.2 percent in the two weeks ending yesterday as gains by base-metals producers and financial companies were offset by declines in energy stocks as natural gas prices plunged to a nine-year low. The S&P/TSX trailed the S&P 500 last year for the first time since 2003 as drops in commodity prices held back the Canadian stock benchmark gauge.

Energy and raw-materials companies make up 47 percent of Canadian equities by market value, according to Bloomberg data.

Global stocks rose as the International Monetary Fund proposed to boost its lending capacity. The Washington-based lender is aiming to increase its resources after identifying a potential need for $1 trillion in financing in coming years, an IMF spokesman said in a statement.

Greece is close to a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt, said Bruce Richards, who is on the creditors’ committee and chief executive officer for Marathon Asset Management LP.

S&P/TSX banks rose, reversing three days of losses after Goldman Sachs Group Inc., the fifth-largest U.S. bank by assets, beat analysts’ average earnings forecast in a Bloomberg survey by 50 percent. Royal Bank of Canada, the country’s biggest lender by assets, gained 1.4 percent to C$52.52. Bank of Nova Scotia rose 1.1 percent to C$52.40. National Bank of Canada gained 1.4 percent to C$74.11.

Oil and natural gas stocks in the S&P/TSX rose for a third day. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, rose 1.3 percent to C$38.23.

Suncor Energy rose 1.9 percent to C$33.84 after climbing to C$33.96, the highest intraday price since Aug. 4. Petrobakken Energy Ltd. gained 4.4 percent to C$14.71. Petrobank Energy & Resources Ltd., the majority owner of PetroBakken, advanced 4.5 percent to C$12.82, after rising to C$13.25, the highest intraday price since Aug. 5.

The gauge of base metals in the S&P/TSX advanced for the third day. Teck Resources, Canada’s largest copper producer, rallied 2.7 percent to C$40.91 after rising to $41, the highest intraday price since Oct. 31. Thompson Creek Metals Co. rallied 5.7 percent to C$8.11 after touching C$8.13, the highest intraday since Sept. 8.

Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, climbed 6.2 percent to C$2.76.

TransCanada fell 1.7 percent to C$41.63 after sliding as much as 4.8 percent, the most intraday since May 2010. The Obama administration probably will announce rejection of TransCanada’s Keystone XL pipeline later today or tomorrow, according to two people familiar with the matter. The administration will let TransCanada submit a new application for an alternate pipeline route, a person familiar with the administration’s plans said.

Finning International Inc. jumped 4.8 percent to C$25.58.

The world’s largest dealer of Caterpillar Inc. equipment agreed to buy a distribution and support business from the U.S. manufacturer for about $465 million.

RIM lost 3.8 percent to C$17.09 after Samsung denied a report from the BGR blog that the Suwon, South Korea-based company is interested in buying RIM. Shares of the Waterloo, Ontario-based smartphone maker rallied 5.3 percent yesterday.

US

By Rita Nazareth

Jan. 18 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its best start to a year since 1987, after confidence among homebuilders topped forecasts, Goldman Sachs Group Inc. rallied and concern about Europe eased.

Goldman Sachs climbed 6.8 percent as earnings beat estimates amid lower compensation costs. Bank of America Corp. and JPMorgan Chase & Co. jumped at least 4.6 percent, leading the gains in the Dow Jones Industrial Average.

PulteGroup Inc. and Lennar Corp. added more than 4.3 percent, pacing an advance in homebuilders. A measure of chipmakers rose the most in the S&P 500 among 24 industries, rallying 3.9 percent.

The S&P 500 increased 1.1 percent to 1,308.04 at 4 p.m. New York time, closing above 1,300 for the first time since July.

The Dow advanced 96.88 points, or 0.8 percent, to 12,578.95. The Nasdaq Composite Index climbed 1.5 percent to 2,769.71. The Russell 2000 Index jumped 1.8 percent to 779.26.

“It’s great to see the market up,” John Carey, a Boston- based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $220 billion. “People are realizing that Europe is important, but it’s not the whole world. They are looking at the economic numbers in the U.S. and seeing that we’re not going back into a recession. The economy is still growing. We might be all right at the end of the day.”

The S&P 500 has risen 4 percent this year as measures of commodity, financial and industrial shares rallied at least 6.4 percent. The Morgan Stanley Cyclical Index of companies most- tied to the economy has surged 11 percent in 2012, with Alcoa Inc. and Caterpillar Inc. soaring at least 15 percent.

Stocks climbed today as confidence among U.S. homebuilders rose in January to the highest level since 2007. Equities extended gains as an official told reporters that Greece’s government could forge an agreement with private creditors by the end of this week after talks resumed in Athens today. The International Monetary Fund is proposing to raise its lending capacity by as much as $500 billion to safeguard the economy.

“Investors need a new excuse to commit more capital,”

Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees $1.3 billion, said in a telephone interview. “The acute stress of Europe has moderated. Given that we already have good economic data, the most obvious new excuse is earnings. I would expect a decent earnings season.”

Companies in the benchmark index, which beat profit estimates in the previous 11 quarters, probably will report a 4.6 percent increase in per-share earnings during the September- December period, analysts’ estimates compiled by Bloomberg show.

Nine out of 10 industries in the S&P 500 rallied as financial and technology gauges advanced at least 1.6 percent. A gauge of homebuilders in S&P indexes climbed 4.6 percent.

PulteGroup added 5.9 percent to $7.94. Lennar jumped 4.4 percent to $23.

Goldman Sachs rose 6.8 percent to $104.31. Chief Executive Officer Lloyd C. Blankfein cut compensation 21 percent in 2011 as he reduced costs and focused on international growth to offset a slowdown in trading, which contributes most of the firm’s revenue. Goldman Sachs’s higher-than-estimated earnings contrasted with previous reports from Citigroup Inc., which fell short of analysts’ estimates, and JPMorgan, which matched projections.

Some of the largest financial companies also climbed. Bank of America advanced 4.9 percent to $6.80. JPMorgan added 4.7 percent to $36.54.

Bank of New York Mellon Corp. fell 4.6 percent to $20.30.

The world’s biggest custody bank said fourth-quarter earnings declined 26 percent on a restructuring charge and lower revenue from businesses tied to financial markets.

The Philadelphia Semiconductor Index surged 5 percent as all of its 30 stocks advanced. Linear Technology Corp. jumped 12 percent, the most in the S&P 500, to $33.32. The maker of semiconductors for industrial equipment and cars forecast fiscal third-quarter sales that would beat analysts’ estimates.

Yahoo! Inc. gained 3.2 percent to $15.92 as Jerry Yang’s exit may remove a barrier to find a buyer or negotiate a sale of stakes in Asian assets valued at more than $10 billion. Now that the co-founder and one-time chief executive officer has cut his leadership ties to Yahoo, newly appointed CEO Scott Thompson has freer rein to unwind the company’s part-ownership of Alibaba Group Holding Ltd. and Yahoo Japan Corp.

U.S. companies that beat analysts’ earnings estimates are an exception, rather than the rule, for the fourth-quarter reporting season getting under way. Only 47.1 percent of companies in the S&P 500 that posted quarterly results between Dec. 1 and yesterday exceeded the average projection, according to data compiled by Bloomberg.

So-called positive surprises have surpassed 50 percent at a comparable point in every other quarterly reporting period for the past four years. The previous low was 51.5 percent in the third quarter of 2008, when a global financial crisis was taking hold.

“Early reporters’ results” are one of two reasons to expect the current earnings season to be disappointing, Thomas M. Doerflinger, a strategist at UBS AG, wrote yesterday in a report. The other is that many companies are likely to cut estimates for this year.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Man progresses, from epoch to epoch, toward the full realization of his soul,

of this soul that is greater than all the riches he can accumulate,

than all the actions he can accomplish and all the theories he can set forth,

this soul that continues onward, never ending in death or dissolution.

-Rabindranath Tagore, 1861-1901

 

As ever,

 

Carolann

 

Do not condemn the judgment of another

because it differs from your own. You

may both be wrong.

-Lao Tzu, 570-490 BC

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

 

Tangents:

Birthday: Benjamin Franklin, January 17, 1706; some of his words of wisdom:

There is no little enemy.

Don’t throw stones at Your neighbors if your own windows are glass.

Be slow in choosing a friend, slower in changing.

Necessity never made a good bargain.

The definition of insanity is doing the same thing over and over and expecting different results.

I received an e-mail from a client on the weekend with this cogent message:

 

“We spend January 1 walking through our lives, room by room, drawing up a list of work to be done, cracks to be patched. Maybe this year, to balance the list, we ought to walk through the rooms of our lives… not looking for flaws, but for potential.” ~ Ellen Goodman

 

photos of the day

January 17, 2012

A jogger runs along a street during a snowfall in Vienna.

Heinz-Peter Bader/Reuters

A woman walks past portraits on a street in Lisbon, Portugal. The photos are part of French photographer Joanne Gatefield’s large-scale art project called ‘Inside Out Lx,’ which aims to spread joy by showing laughing people.

Hugo Correia/Reuters

Market Closes for January 16th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	12,472.07	+60.01  +0.48
S&P 500	1,293.67	+4.58  +0.36%
NASDAQ	2,728.08	+17.41  +0.64%
TSX	12,232.83	-25.77  -0.21%

 

International Markets

 

	Close	Change
NIKKEI	8,466.40	+88.04  +1.05%
HANG SENG	19,627.75	+615.55  +3.24%
SENSEX	16,466.05	+276.69  +1.71%
FTSE 100	5,693.95	+36.51  +0.65%
CAC 40	3,269.99	+44.99  +1.40%
DAX	6,332.93	+112.92  +1.82%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	1.918	1.933
CDN. 30 year bond	2.502	2.511
U.S. 10-year bond	1.8566	1.8775
U.S. 30-year bond	2.9000	2.9161

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	1.0137	1.01532
US   $	.98653	.98491

 

Euro Rate  1 Euro=		Inverse
Canadian $	1.29964	0.76945
US  $	1.28212	0.77996

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,652.30	$1,654.20

 

Oil	Close	Previous
WTI Crude Future	$100.94	$99.83

 

Market Commentary:

Canada

By Matt Walcoff and Ksenia Galouchko

Jan. 17 (Bloomberg) — Canadian stocks fell as Kinross Gold Corp. plunged after saying it expects to record a goodwill writedown on its Tasiast mine in Africa and banks slipped as Citigroup Inc. reported a decline in profit.

Kinross, Canada’s third-largest gold producer by market value, dropped 21 percent. Cenovus Energy Inc., the country’s fifth-biggest energy company by revenue, rose 4.4 percent after an analyst at Canaccord Financial Inc. raised his share-price estimate on the company. Research In Motion Ltd. gained 5.3 percent after a report that Samsung Electronics Co. may be interested in buying the company.

The Standard & Poor’s/TSX Composite Index slipped 25.77 points, or 0.2 percent, to 12,232.83 today.

“There was concern from day one as to this purchase of Tasiast,” Greg Eckel, a fund manager with Morgan Meighen & Associates Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($975 million). The acquisition “seemed a little excessive and now you’re seeing that they’re having to pull back and digest what they’ve done.”

The index gained 4.5 percent from Dec. 28 to yesterday as gold stocks rebounded from the lowest level since July 2010.

Gold companies make up 11 percent of Canadian stocks by market value, and eight of the world’s 21 largest companies in the industry are Canadian, according to data compiled by Bloomberg.

Kinross plunged 21 percent, the most since its initial public offering in 1993, to C$10.40 after saying it will review development plans for three projects, including Tasiast. Kinross acquired the mine in Mauritania when it bought Red Back Mining Inc. for C$8 billion ($7.9 billion) in September 2010.

Barrick decreased 2.1 percent to C$48.75 after Steven Butler, an analyst at Canaccord Financial Inc., cut his rating on the shares to “hold” from “buy” in a note to clients dated yesterday. Butler cited Barrick’s higher share price relative to net assets than its peers and a “relatively flat production profile over the next few years” in the note.

Agnico-Eagle Mines Ltd. fell 5.4 percent to C$36.11 after at least three analysts, including Anita Soni of Credit Suisse Group AG, cut the stock’s price estimates.

S&P/TSX banks retreated for a third day after Citigroup, the third-largest U.S. bank by assets, missed analysts’ average earnings forecast in a Bloomberg survey by 26 percent. Royal Bank of Canada, the country’s biggest lender by assets, dropped 0.5 percent to C$51.82. Toronto-Dominion Bank, its biggest rival, slipped 0.1 percent to C$77.71, ending a six-day streak of gains. Scotiabank fell 0.1 percent to C$51.81.

Cenovus rallied 4.4 percent to C$35.06 after Phil Skolnick, an analyst at Canaccord, boosted his 12-month price estimate on the shares to C$45 from C$42. Skolnick cited a higher forecast for oil prices.

Natural gas futures closed at the lowest price in almost 10 years as above-normal temperatures and rising production contributed to a growing surplus of the furnace and power-plant fuel.

Peyto Exploration & Development Corp., which produces oil and gas in Canada, fell 4.9 percent to C$19.97. Tourmaline Oil Corp., a western Canadian natural gas and oil producer, tumbled 4.9 percent to C$22.44. Progress Energy Resources Corp., which produces natural gas and oil in Canada, slumped 1.3 percent to C$11.01, the lowest price since October 2010.

Petrominerales Ltd., an energy producer with operations in Colombia, climbed 6.4 percent to C$19.35, the biggest gain in the S&P/TSX.

Whiterock Real Estate Investment Trust, which owns commercial properties in Canada and the U.S., soared 12 percent to a record C$16.08 after agreeing to be bought by Dundee Real Estate Investment Trust. Dundee REIT slipped 3.3 percent to C$33.93.

Uranium producer Denison Mines Corp. slumped 10 percent to C$1.72 after Craig Miller, an analyst at TD, cut his rating on the shares to “reduce” from “hold.”

“The company continues to incur significant development expenditures, which we believe are not sustainable from operating cash flows alone,” Miller wrote in a note to clients.

The shares jumped 19 percent yesterday after Uranium One Inc. reported a 45 percent production increase.

Chinese gross domestic product increased 8.9 percent in the fourth quarter from a year earlier, down from 9.1 percent in the previous three months, the National Bureau of Statistics said today in Beijing.

All major base metals traded on the London Metal Exchange gained, and copper futures advanced on the Comex in New York.

First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, rallied 4.8 percent to C$23.91.

North American Palladium Ltd. tumbled 13 percent to C$2.69 after forecasting “modest growth” for 2012 production and saying it is discontinuing production at its Sleeping Giant mine due to insufficient operating margin.

RIM rose 5.3 percent to C$17.76, the highest level since Dec. 1. Samsung may be interested in buying the maker of the Blackberry smartphone, and no deal has been made because Waterloo, Ontario-based RIM is asking too much, the blog BGR reported today, without identifying its sources.

Celestica Inc., the maker of electronic parts for companies including RIM, gained 3.5 percent to C$8.07.

Primero Mining Corp., which owns a gold and silver mine in Mexico, tumbled 15 percent to C$3.18 after releasing a 2012 production forecast that trailed the estimates of David Haughton, an analyst at Bank of Montreal.

US

By Rita Nazareth

Jan. 17 (Bloomberg) — U.S. stocks advanced, sending the Dow Jones Industrial Average to the highest level since July, after reports bolstered optimism in the American and German economies and Spain’s borrowing costs decreased at an auction.

Equities pared gains as financial shares slumped, with Citigroup Inc. losing 8.2 percent amid an unexpected drop in earnings. Wells Fargo & Co., the largest U.S. bank by market value, gained 0.7 percent amid record profit. Sears Holdings Corp. surged 9.5 percent, the most in the Standard & Poor’s 500 Index, on speculation that the company may seek to go private.

Carnival Corp. tumbled 14 percent after the Costa Concordia cruise ship ran aground off the coast of Italy on Jan. 13.

The S&P 500 increased 0.4 percent to 1,293.67 at 4 p.m. New York time, paring an earlier gain of as much as 1.1 percent. The Dow rose 60.01 points, or 0.5 percent, to 12,482.07.

“The economic data broadly exceeded expectations,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “That’s why we had an immediate lift to the market,” he said. “What the auction in Spain tells me is that the market is ahead of the rating companies.”

Stocks gained as manufacturing in the New York region expanded in January at the fastest pace in nine months. German investor confidence rose the most on record in January. Spanish borrowing costs fell at an auction as investors ignored S&P downgrades last week. China’s economy expanded at the slowest pace in 10 quarters, sustaining pressure on Premier Wen Jiabao to ease monetary policy.

The S&P 500 is up 2.9 percent in 2012 for its best start to a year since 2003, according to data compiled by Bloomberg. At least 48 companies in the benchmark index are scheduled to report quarterly results this week. S&P 500 companies, which beat profit estimates in the previous 11 quarters, probably will report a 4.6 percent increase in per-share earnings during the September-December period, analysts’ estimates compiled by Bloomberg show.

Nine out of 10 groups in the S&P 500 gained. Among the biggest companies, Apple Inc. added 1.2 percent to $424.70.

Exxon Mobil Corp. advanced 1 percent to $85.69.

Wells Fargo added 0.7 percent to $29.83. Profit beat analysts’ estimates as mortgage financing improved. New mortgages rose 35 percent to $120 billion from the three months ended September at Wells Fargo, the biggest U.S. home lender, while dropping 6 percent from a year earlier.

Sears surged 9.5 percent to $36.75. Sears, working to turn around four years of declining sales, has lost ground as shoppers have flocked to such rivals as Macy’s Inc. Edward Lampert, who owns about 60 percent of Sears and serves as chairman, may seek new capital and to reorganize operations, said Paul Swinand, an analyst with Morningstar Inc. in Chicago.

“Restructuring is often easier taken under private hands,” Swinand said today in a telephone interview. “Anything that gives you more flexibility is an advantage.”

Kraft Foods Inc. added 1 percent to $38.13. The food company said it will realign its U.S. sales organization and cut 1,600 jobs in North America throughout 2012 as part of its move to divide its snacks and grocery businesses.

Dish Network Corp. rallied 1.2 percent to $29.10. AT&T Inc. is under so much pressure to add wireless spectrum after its failed $39 billion bid for T-Mobile USA that it may be compelled to pay the highest premium in more than a decade to secure Dish.

With the industry facing network constraints and a scarcity of new spectrum that’s making Dish a target, President and Chief Executive Officer Joe Clayton says the company is open to future acquisitions.

At $50 a share, cited as a reasonable price by Alpine Mutual Funds, AT&T would have to pay a 77 percent premium for Dish, the highest in an acquisition greater than $5 billion by a telecommunications company since 2000, according to data compiled by Bloomberg.

The S&P 500 Diversified Financials Index retreated 2.2 percent for the biggest decline among 24 groups. Citigroup lost

8.2 percent to $28.22. Trading declines mirrored results at JPMorgan, which said last week that revenue in every investment- banking business fell from a year earlier.

Carnival tumbled 14 percent, the most since 2001, to $29.60. The Costa Concordia was carrying more than 4,200 people when it ran aground hours after leaving a port near Rome to continue a Mediterranean cruise. The accident has left at least 11 people dead.

Royal Caribbean Cruises Ltd., the second-biggest cruise line, fell 6.2 percent to $26.97.

Investors began to put cash back to work in January, buying U.S. stocks, as expectations for global growth climbed to a six- month high, a Bank of America Corp. survey showed.

A net 27 percent of the 214 respondents, who together manage $655 billion in assets, said they were overweight cash.

That’s down from a net 35 percent in December. Asset allocators became the most bullish on American equities since April 2010, with the U.S. replacing emerging markets as their most favored region for equities.

“We have started the new year with investors much less pessimistic on global growth,” said Gary Baker, BofA’s head of European equity strategy at a press briefing in London. “This has translated into greater risk appetite. The U.S. has shown fairly consistent improvement, largely exceeding expectations.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

As ever,

 

Carolann

 

Never let the fear of striking out get in your way.

-Babe Ruth, 1895-1948

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

 

Tangents: Quiet day today with US markets closed for Martin Luther King Day.

 

I was reading an interview with author Louisa Young in the FT yesterday and she was asked, “If you could own any painting, what would it be?” She replied, “Carvaggio’s ‘Supper at Emmaus’ but I’d want to leave it where it was – it’s a great influence on humanity, that painting.” I couldn’t remember it, so I looked it up; here it is:

It was painted by the artist in 1601 and now hangs in the National Gallery in London.

The poem:

Prayer on an Orphic Gold Leaf

-by Ruth Padel

 

Don’t be afraid. On your way you’ll pass the rivers

Mnemosyne and Lethe. Don’t drink the water –

you don’t need any longer to remember or forget.

You’re a lily closing on its stamen, the zendrum

of a heart in tremolo. You may hear music. Whip-rays

of light converge by the bed on a Book of Psalms

left by your last visitor. You are glass, annealing

to that celestial temperature where molecules

rearrange all inner stress to perfect surface tension

in a new, fused, tough material. In the distance

you’ll see one pine-tree, needle-leaves

clumped in three balls on a trunk like black bone

twisted in wind. You’ll know

you are making, and coming, home.

 

Poem extracted from The Mara Crossing by Ruth Padel

photos of the day

January 16, 2012

Steam rises from Mexico’s Popocatepetl volcano in Puebla. The volcano is located 78 miles east of Mexico City.

Violeta Schmidt/Reuters

Oil removal ships navigate around the cruise ship Costa Concordia, after it ran aground near the tiny Tuscan island of Giglio, Italy, last Friday night. The rescue operation was called off mid-afternoon Monday after the Costa Concordia shifted a few inches in rough seas. The fear is that if the ship shifts significantly, some 500,000 gallons of fuel may begin to leak into the pristine waters.

Gregorio Borgia/AP

Market Closes for January 16th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	Closed
S&P 500	Closed
NASDAQ	Closed
TSX	12,258.60	+27.54  +0.23%

 

International Markets

 

	Close	Change
NIKKEI	8,452.05	-47.97  -0.56%
HANG SENG	19,350.79	+146.37  +0.73%
SENSEX	16,189.36	+34.74  +0.22%
FTSE 100	5,657.44	+20.80  +0.37%
CAC 40	3,225.00	+28.51  +0.89%
DAX	6,220.01	+76.93  +1.25%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	1.933	1.924
CDN. 30 year bond	2.511	2.507
U.S. 10-year bond	1.8775	1.8636
U.S. 30-year bond	2.9161	2.91

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	1.01532	1.02348
US   $	.98491	.97706

 

Euro Rate  1 Euro=		Inverse
Canadian $	1.29056	0.77486
US  $	1.27107	0.7874

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,654.20	$1,634.80

 

Oil	Close	Previous
WTI Crude Future	$99.83	$98.97

Market Commentary:

Canada

By Matt Walcoff

Jan. 16 (Bloomberg) — Canadian stocks rose, led by raw- materials producers, as gold gained after Standard & Poor’s cut the credit ratings of nine euro-region countries.

Kinross Gold Corp., Canada’s third-largest gold producer by market value, advanced 2.3 percent as the metal gained on demand for a haven. Provident Energy Ltd., a natural gas liquids storage and transportation company, soared 18 percent after agreeing to be bought by Pembina Pipeline Corp. for about C$11.86 a share. Canadian National Railway Co., the country’s biggest railroad, dropped 2.5 percent in the second day after an analyst at JPMorgan Chase & Co. cut his rating on the shares.

The S&P/TSX Composite Index climbed 27.54 points, or 0.2 percent, to 12,258.60 after three people with knowledge of the transactions said the European Central Bank bought Italian and Spanish bonds today.

“More and more, this is going to rest on the shoulders of Mr. Draghi in terms of providing liquidity to the markets,” Ian Nakamoto, a money manager at MacDougall MacDougall & MacTier Inc. in Toronto, said in a telephone interview, referring to ECB President Mario Draghi. The firm oversees about $4 billion.

“Any time you have an increase in the money supply or liquidity being provided to the gold market, that helps gold prices.”

The S&P/TSX climbed each of the past four weeks, the longest streak in nine months, as economic data signaled a strengthening U.S. economy and investors speculated China will enact monetary policies to support growth. The index slumped 11 percent in 2011 as raw-materials and energy producers, which make up 48 percent of Canadian stocks by market value, retreated.

Gold futures rose in electronic trading in New York.

Kinross increased 2.3 percent to C$13.20. Barrick Gold Corp., the world’s largest producer of the metal, climbed 0.7 percent to C$49.78. Pan American Silver Corp., which mines in Mexico, gained 4.1 percent to C$25.67 as silver advanced.

Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, rallied 16 percent, the most since October 2009, to C$2.73 after saying production climbed to a record in 2011.

Denison Mines Corp., another uranium producer, soared 19 percent, the most since May 2009, to C$1.91. Cameco Corp., the world’s biggest company in the industry, climbed 5.1 percent to C$21.71.

Provident Energy surged 18 percent to C$11.20, the highest since March 2009, after Pembina agreed to buy it for C$3.2 billion ($3.1 billion) in shares. Pembina, Canada’s fourth- largest pipeline company by market value, lost 4.3 percent to C$26.70.

Canadian National retreated after Thomas R. Wadewitz, an analyst at JPMorgan Chase & Co., reduced his rating on the stock to “underweight” from “neutral” Jan. 13. CN is likely to raise prices less quickly than its U.S. peers, Wadewitz wrote in a note to clients. The shares decreased 2.5 percent to C$76.28 today.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, increased 2.1 percent to C$46.74 after Jacob Bout, an analyst at Canadian Imperial Bank of Commerce, raised his rating on the shares to “sector outperform” from “sector perform.” The analyst cited the shares’ decline in price relative to assets in a note to clients.

Cominar Real Estate Investment Trust, which owns commercial properties in eastern Canada, slipped 2.4 percent to C$21.85 after agreeing to buy Canmarc REIT for C$16.50 a unit. Cominar made an unsolicited bid of C$15.30 a unit in November.

Canmarc rallied 3.3 percent to C$16.52, the highest since it began trading in May 2010.

US

Markets Closed

 

Have a wonderful evening everyone.

 

Be magnificent!

What is the soul? The soul is consciousness.

It shines as the light within the heart.

Brihadaranyaka Upanishad

As ever,

 

Carolann

 

Forgiveness is the economy of the heart…

forgiveness saves the expense of anger,

the cost of hatred, the waste of spirits.

-Hannah More, 1745-1833

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Tangents:

MLK remembrance

January 13, 2012

Birthday: January 15^th, Martin Luther King Junior, would have turned 83 years old this year.

The Rev. Martin Luther King Jr. is given a welcome home kiss by his wife, Coretta, upon his return to Atlanta, following his release from Reidsville State Prison on bond, on October 27, 1960. King’s children, Yolanda and Martin Luther III, join the welcome celebration.

AP/File

The Dr. Martin Luther King Jr. acknowledges the crowd at the Lincoln Memorial for his ‘I Have a Dream’ speech during the March on Washington on Aug. 28, 1963.

AP/File

Marchers cross the Alabama River on the Edmund Pettus Bridge in Selma, Alabama, on March 21, 1965. The civil rights marchers are led by the Rev. Martin Luther King Jr. This is the start of their five day, 50-mile march to the State Capitol of Montgomery. They are fighting for voter registration rights for African-Americans, who are discouraged from registering to vote.

AP/File

 

Our days begin to end the day we become silent about things that matter. –MLK

Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed. – MLK, Letter from Birmingham Jail, 1963.

In the end, we will remember not the words of our enemies, but the silence of our friends. –MLK, The Trumpet of Conscience, 1967.

The hope of a secure and livable world lies with disciplined nonconformists who are dedicated to justice, peace and brotherhood. -MLK

Market Closes for January 13th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	12,422.06	-48.96  -0.39%
S&P 500	1,289.09	-6.41  -0.49%
NASDAQ	2,710.67	-14.03  -0.51%
TSX	12,231.06	-43.26  -0.35%%

 

International Markets

 

	Close	Change
NIKKEI	8,500.02	Weekly:  +109.67 +1.31%%
HANG SENG	19,204.42	Weekly:  +611.36 +3.29%
SENSEX	16,154.62	+286.89  +1.81%%
FTSE 100	5,636.64	-25.78  -0.46%
CAC 40	3,196.49	-3.49  -0.11%
DAX	6,143.08	-36.1-0.58%

 

International Markets

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	1.924	1.975
CDN. 30 year bond	2.507	2.54
U.S. 10-year bond	1.8636	1.92
U.S. 30-year bond	2.910	2.97

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	102.348	1.0198
US   $	0.97706	98.20

 

Euro Rate  1 Euro=		Inverse
Canadian $	1.29419	0.77268
US  $	1.26443	0.79087

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,634.80	$1,647.70

 

Oil	Close	Previous
WTI Crude Future	$98.67	$99.10

Market Commentary:

Canada

By Matt Walcoff and Ksenia Galouchko

Jan. 13 (Bloomberg) — Canadian stocks fell, erasing a weekly gain, as the U.S. dollar climbed and fuels and metals dropped on concern Standard & Poor’s will cut the credit ratings of some euro-region countries.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, declined 2.6 percent after crude oil retreated to a three-week low as a European government official said France is among several euro-area countries facing downgrades. Teck Resources Ltd., Canada’s largest base-metals and coal producer, decreased 2.7 percent as copper retreated. Canadian National Railway Co., the country’s largest railroad, lost 1.7 percent after an analyst at JPMorgan Chase & Co. cut his rating on the shares.

The S&P/TSX Composite Index slid 120.40 points, or 1 percent, to 12,153.92 at 1:38 p.m. Toronto time, poised for a 0.2 percent decline since Jan. 6 after three straight weeks of advances.

“There are rumors someone’s going to downgrade somebody somewhere sometime,” David Baskin, president of Baskin Financial Services Inc. in Toronto, said in a telephone interview. The firm manages about C$440 million ($429 million).

“People feel there’s going to be a recession in Europe. The Greeks still can’t get their act together. People are still edgy about it.”

The index increased 6.4 percent from Dec. 19 to yesterday as economic data indicating growth in the U.S. and speculation China may ease monetary policy overshadowed the European debt crisis. The S&P/TSX fell nine of the 10 months ending in December as concern that the crisis would limit global economic growth weakened shares of commodity producers.

Stocks fell earlier after Dow Jones, citing an unnamed person familiar with the matter, reported an S&P downgrade of some euro-region countries “could be imminent.” Germany will retain its AAA grade in the rating company’s review, according to the European government official, who spoke on condition of anonymity because the announcement has yet to be made.

Stocks extended their losses after the Institute of International Finance, which represents Greece’s bank creditors, said talks with the government have halted after failing to produce a “constructive consolidated response by all parties.”

The euro headed for its sixth-straight weekly retreat against the U.S. dollar, which would be the longest streak since February 2010.

The S&P/TSX Energy Index dropped for a third day. Canadian Natural declined 2.6 percent to C$37.37.

Birchcliff Energy Ltd., a western Canadian oil and gas producer, decreased 5 percent to C$11.95 after Kurt Molnar, an analyst at Stifel Financial Corp., cut his rating on the stock to “hold” from “buy.” Molnar cited lower natural gas prices in a note to clients.

Raw-materials companies in the S&P/TSX retreated the most in two weeks as base and precious metals fell. Teck dropped 2.7 percent to C$38.90 as copper futures declined from a 10-week high.

A gauge of gold stocks in the S&P/TSX fell for the first time in five days. Barrick Gold Corp., the world’s largest producer, lost 1.6 percent to C$48.87. AuRico Gold Inc., which operates in Mexico, slumped 2.1 percent to C$8.72 after saying “adverse ground conditions” at its Ocampo mine reduced production.

Lake Shore Gold Corp. retreated 7.9 percent to C$1.40, the biggest drop in a month. The company forecast 2012 production of as much as 100,000 ounces of gold, 30 percent below Bank of Montreal’s estimate.

The S&P/TSX Financials Index declined for the first time in a week after JPMorgan reported fourth-quarter revenue that trailed the average analyst estimate in a Bloomberg survey.

Royal Bank of Canada, the country’s largest lender by assets, slipped 1.5 percent to C$51.96. Manulife Financial Corp., North America’s fourth-largest insurer, fell for the first time since Dec. 28, dropping 1.1 percent to C$11.76.

Canadian National decreased 1.7 percent to C$77.99 after Thomas R. Wadewitz, an analyst at JPMorgan, cut his rating on the shares to “underweight” from “neutral.” CN is likely to raise prices less quickly than its U.S. peers, Wadewitz wrote in a note to clients.

US

By Rita Nazareth

Jan. 13 (Bloomberg) — U.S. stocks retreated, snapping a four-day rally for the Standard & Poor’s 500 Index, as euro- region governments braced for credit downgrades by S&P and after JPMorgan Chase & Co.’s profit slumped 23 percent.

All 10 groups in the S&P 500 declined as financial, industrial and technology gauges slid at least 0.7 percent.

JPMorgan, the largest U.S. bank by assets, dropped 2.5 percent.

Bank of America Corp., Intel Corp. and Alcoa Inc. lost more than 1.3 percent to pace declines among the biggest companies.

Eastman Kodak Co. tumbled 23 percent as it is said to be in talks with Citigroup Inc. to provide bankruptcy financing.

The S&P 500 slid 0.5 percent to 1,289.09 as of 4 p.m. New York time, paring a drop of as much as 1.4 percent. The Dow Jones Industrial Average slid 48.96 points, or 0.4 percent, to 12,422.06. The market will be closed on Jan. 16 for a holiday.

“People are keeping a very careful eye on Europe and they are nervous with earnings,” Mark Bronzo, who helps manage $23.4 billion at Security Global Investors in Irvington, New York, said in a telephone interview. “It’s critical that any downgrades in Europe do not involve Germany. Most people expected France to be downgraded,” he said. In the U.S., “JPMorgan’s earnings were OK, but the quality is not good.”

Stocks slumped as France’s AAA rating will fall by one level at S&P, Finance Minister Francois Baroin told France 2 television today. Germany will keep its top rating, a person familiar with the matter said. Greece’s creditor banks broke off talks after failing to agree with the government about how much money investors will lose by swapping their bonds.

Concern about potential downgrades overshadowed data showing that confidence among U.S. consumers rose more than forecast in January to the highest level in eight months, a sign household spending may hold up early this year. Separate figures showed that the U.S. trade deficit widened more than forecast in November as American exports declined and companies stepped up imports of crude oil and automobiles.

The S&P 500 capped the second straight week of gains amid lower borrowing costs at auctions in Europe. Investors also watched fourth-quarter results. S&P 500 companies, which beat estimates in the previous 11 quarters, are forecast to report a 4.6 percent increase in per-share profit during the September- December period, according to projections compiled by Bloomberg.

Financial companies slumped 0.8 percent, the most among 10 groups in the S&P 500. JPMorgan dropped 2.5 percent to $35.92.

Investment-banking revenue declined 30 percent to $4.36 billion from a year earlier as many clients stayed on the sidelines on concern the European debt crisis would lead to a global economic slowdown.

“Financials would have to participate for the market to do well,” James Dunigan, who helps oversee $104 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. “We’ll look to see whether all that disruption in Europe had an effect in overall earnings reports. If that bleeds over into our export numbers, it may have an impact on the earnings side.”

Bank of America lost 2.7 percent to $6.61, while Morgan Stanley retreated 3.2 percent to $16.63. Citigroup fell 2.7 percent to $30.74. Goldman Sachs Group Inc. slid 2.2 percent to $98.96.

The Morgan Stanley Cyclical Index retreated 1.1 percent amid concern about global economic growth. The Dow Jones Transportation Average dropped 0.6 percent. Intel, the world’s biggest chipmaker, declined 2.4 percent to $25.14. Alcoa slumped 1.3 percent to $9.80.

Kodak tumbled 23 percent to 52 cents. The imaging company may seek protection from creditors within weeks and then hold an auction to sell its patent portfolio, said three people familiar with the matter, who asked not to be identified because the talks are private. Kodak may seek about $1 billion in so-called debtor-in-possession financing, though terms may change, two people said.

Patriot Coal Corp. declined 13 percent to $7.87. The U.S.

mining company said it will idle production in West Virginia because of a weaker market for coal used by steelmakers. Other coal producers fell. Alpha Natural Resources Inc. dropped 10 percent, the most in the S&P 500, to $20.19. Arch Coal Inc. retreated 9.8 percent to $14.13.

Charles Schwab Corp. lost 2.5 percent to $12.16. The independent, San Francisco-based brokerage was downgraded to “market perform” from “outperform” at Wells Fargo & Co.

BankUnited Inc. rallied 5.8 percent to $24.48 as it is exploring a sale one year after its private-equity owners took the lender public, according to a person with knowledge of the matter. BankUnited is working with Goldman Sachs Group Inc., said the person, who declined to be identified because the discussions are private. The company could still decide against a sale.

Stock investors shouldn’t get used to the relative calm that markets are now showing, according to Andrew Garthwaite, a global equity strategist at Credit Suisse Group AG.

Volatility is likely to rise this year, Garthwaite wrote yesterday in a report. He attributed the outlook to excessive borrowing in developed economies, which ensures that investors will be “abnormally sensitive” to shifts in economic growth and government policy, he added.

“Sentiment in the market has clearly changed over the past three months,” wrote Garthwaite, who is based in London.

Even so, developed-country debt is still $8 trillion too high, the report said. Garthwaite came up with that estimate by comparing the borrowing relative to gross domestic product with a figure based on the debt-to-GDP ratio’s trend during the past three decades.

The need to reduce this burden creates “a considerable amount of tail risk,” or potential for unlikely stock-market outcomes, the report said. He mentioned 11 possible surprises for this year. One was a breakup of the euro region, which he estimated would send the S&P 500 falling to 800, or 38 percent less than yesterday’s close.

Have a wonderful weekend everyone.

 

Be magnificent!

If you see the soul in every living being, you see truly.

If you see immortality in the heart of every mortal being, you see truly.

The Bhagavad Gita

As ever,

 

Carolann

 

I shut my eyes in order to see.

-Paul Gauguin, 1848-1903

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Tangents:

On this day, January 12^th, in 1855, Chief Seattle responded to the Governor of the Stat of Washington following the decision to place the Indian tribes on reservations:

My words are like the stars that never set.  What Seattle says the Great Chief at Washington can rely upon with as much certainty as our paleface brothers can rely upon the return of the seasons.

The son of the White Chief says his father sends us greetings of friendship and good will.  This is kind of him, for we know he has little need of our friendship in return because his people are many.  They are like the grass that covers the vast prairies, while my people are few; they resemble the scattering trees of a storm-swept plain.

The Great – and I presume – Good White Chief sends us word that he wants to buy our lands but is willing to allow us to reserve enough to live on comfortably.  This indeed appears generous, for the Red Man no longer has rights that he need respect, and the offer may be wise, also, for we are no longer in need of a great country.

There was a time when our people covered the whole land as the waves of a wind-ruffled sea cover its shell-paved floor, but that time has long since passed away with the greatness of tribes now almost forgotten. I will not dwell on nor mourn over our untimely decay, nor reproach my paleface brothers with hastening it, for we, too, may have been somewhat to blame…

It matters little where we pass the remnant of our days.  They are not many.  The Indian’s night promises to be dark.  No bright star hovers above his horizon.  Sad-voiced winds moan in the distance.  Some grim Fate of our race is on the Red Man’s trail, and wherever he goes he will still hear the sure approaching footsteps of his fell destroyer and prepare to stolidly meet his doom, as does the wounded doe that hears the approaching footsteps of the hunter.

-from The Book of Days

 

photos of the day

January 12, 2012

A busker plays bagpipes for tourists near the Houses of Parliament in London. A row between the British government in London and the SNP has escalated sharply in recent days, after British Prime Minister David Cameron outlined a plan to bring forward the referendum, and restrict the questions asked.

Luke MacGregor/Reuters

A view of Jerusalem’s Old City with the Dome of the Rock Mosque.

Sebastian Scheiner/AP

 

Market Closes for January 12th, 2012

North American Markets

 

Market  Index	Close	Change
Dow Jones	12,471.02	+21.57  +0.2%
S&P 500	1,295.50	+3.02  +0.2%
NASDAQ	2,724.70	+13.94  +0.51%
TSX	12,274.32	+13.38  +0.1%

 

International Markets

 

	Close	Change
NIKKEI	8,385.59	-62.29  -0.74%
HANG SENG	19,095.38	-56.56  -0.3%
SENSEX	16,037.51	-138.5  -0.86%
FTSE 100	5,662.42	-8.40  -0.15%
CAC 40	3,199.98	-4.85  -0.15%
DAX	6,179.21	+26.87  +0.44%

 

Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	1.975	1.938
CDN. 30 year bond	2.54	2.503
U.S. 10-year bond	1.92	1.9072
U.S. 30-year bond	2.97	2.9671

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	1.0198	1.0192
US   $	98.20	98.12

 

Euro Spot Rate	Today	Previous
Canadian $	0.766	0.7724
US  $	1.2823	1.2708

 

Commodities

 

Gold	Close	Previous
London Gold Fix	$1,647.70	$1,643.10

 

Oil	Close	Previous
WTI Crude Future	$99.10	$101.21

Market Commentary:

Canada

By Matt Walcoff and Ksenia Galouchko

Jan. 12 (Bloomberg) — Canadian stocks advanced, led by banks and metals producers, as borrowing costs declined in bond sales in Spain and Italy and the U.S. dollar weakened.

Toronto-Dominion Bank, Canada’s second-largest lender by assets, rose 0.9 percent as the S&P/TSX Financials Index gained for a fourth day. Enbridge Inc., the country’s biggest pipeline company, fell 2.1 percent as natural gas headed toward its biggest weekly loss since August 2009. Goldcorp Inc., the world’s second-largest gold producer by market value, increased 1.5 percent as the metal climbed for a third day.

The Standard & Poor’s/TSX Composite Index rose 13.38 points, or 0.1 percent, to 12,274.32.

“People are a bit more comfortable with the euro, so it’s a risk-on trade,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($54 million).

“You saw gold lose its safe-haven status at the end of the year. It was a flight to safety to the U.S. currency.”

The index has rallied 6.4 percent since Dec. 19 as economic data indicating a strengthening U.S. economy outweighed the impact of the European debt crisis. The S&P/TSX fell nine of the 10 months ending in December as concern that the crisis would limit global economic growth weakened shares of commodity producers.

Spain sold 10 billion euros ($13 billion) in bonds today, twice its target. Italy sold 12 billion euros in bills at less than half the yield paid on similar-maturity securities on Dec.

12. The euro gained, and the U.S. Dollar Index fell after closing at the highest level since September 2010 yesterday.

The eight S&P/TSX banks each gained. TD advanced 0.9 percent to C$77.70. Bank of Nova Scotia, Canada’s third-biggest lender by assets, increased 1.1 percent to C$52.20. Manulife Financial Corp., North American’s fourth-largest insurer, climbed for a record 10th-straight day, rising 1.1 percent to C$11.89.

The S&P/TSX Energy Index dropped as natural gas futures declined for a fourth day. The fuel has tumbled as much of North America has had a milder winter than normal. Crude retreated after a European Union official with knowledge of the matter said an embargo on Iranian oil is likely to be delayed for six months.

Enbridge fell 2.1 percent to C$36.04. Encana Corp., the country’s largest natural gas producer, declined 2.2 percent to C$18.20, the lowest close since January 2005. Trilogy Energy Corp., which produces the fuel in Canada, slumped 7.6 percent to C$30.40 to extend its two-day plunge to 16 percent, the most since October 2008.

The S&P/TSX Materials Index gained as precious and base metals advanced. Goldcorp increased 1.5 percent to C$46.78.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, climbed 4 percent to C$23.30. Cameco Corp., the world’s biggest uranium producer, rallied 5.3 percent to C$20.67.

Guyana Goldfields Inc., which explores in South America, plunged 11 percent, the most in two years, to C$7.40 after delaying the release of a feasibility study on its Aurora project.

Quest Rare Minerals Ltd., which explores for rare earths in Canada, soared 26 percent, the most since August 2009, to C$3.27 after reporting drilling results from its Strange Lake project in Quebec.

BlackBerry maker Research In Motion Ltd. rose 5.5 percent to C$16.80. The shares gained on speculation the company hired Goldman Sachs Group Inc. to explore strategic options, Reuters reported, citing a trader it didn’t name.

Bombardier Inc., the maker of trains and airplanes, rallied 6.9 percent to C$4.52. The company is to participate in the Bahrain International Airshow next week.

US

By Rita Nazareth

Jan. 12 (Bloomberg) — U.S. stocks were little changed, after paring an early slump in the Standard & Poor’s 500 Index, as disappointing data on jobless claims overshadowed optimism about a drop in borrowing costs at debt auctions in Europe.

Chevron Corp. retreated 2.3 percent after oil-refining profit slumped. Bank of America Corp. reversed an earlier advance, dropping 1.6 percent. Sears Holdings Corp. tumbled 3.7 percent after vendor loans are said to be halted by CIT Group Inc. Fertilizer producers CF Industries Holdings Inc. and Mosaic Co. declined at least 1.4 percent after reports showed higher- than-expected U.S. corn and soybean inventories.

The S&P 500 fell less than 0.1 percent to 1,292.11 at 12:45 p.m. New York time, paring a decline of as much as 0.5 percent.

The benchmark gauge for American equities rose 1.2 percent over the previous three days. The Dow Jones Industrial Average dropped 17.67 points, or 0.1 percent, 12,431.78 today.

“There are significant cross currents,” Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston, said in a telephone interview. “Lower borrowing costs will help in the refinancing that’s due in the next few months in the euroland in general. Still, they’ve got to spur growth to get things going. In the U.S., today’s economic numbers were weaker than anticipated. The market has had a nice run here. Sentiment has gotten more bullish, which makes me nervous.”

Stocks fell as jobless claims climbed by 24,000 to 399,000 in the week ended Jan. 7, compared with a median estimate of 375,000 in a Bloomberg survey. U.S. retail sales rose 0.1 percent in December, less than the 0.3 percent increase predicted in a Bloomberg survey of economists.

Earlier today, equities rose as Spain sold 10 billion euros ($13 billion) of bonds, twice the target for the sale, while Italy sold 12 billion euros of bills, easing concerns the countries would struggle to finance their debts. European Central Bank President Mario Draghi said the bank has averted a serious credit shortage and there are signs the economy is stabilizing, signaling policy makers may resist cutting interest rates further for now.

Most U.S. stocks advanced yesterday as a rally in banks helped the market recover from an early slump spurred by growing signs Europe may slip into a recession. The S&P 500 has risen 2.8 percent in 2012 through yesterday as commodity, financial and industrial companies had the biggest gains among 10 groups.

Six out of 10 industries in the S&P 500 declined as energy shares had the biggest loss. Chevron dropped 2.3 percent to $105.27. The second-largest U.S. energy company reported fourth- quarter profit was “significantly below” third-quarter results because of shrinking fuel production.

The KBW Bank Index retreated 0.3 percent, snapping a three- day gain. Bank of America sank 1.6 percent to $6.76, following an 11 percent surge over three days. JPMorgan Chase & Co. retreated 0.5 percent to $36.48.

JPMorgan, likely to keep the title of most profitable U.S. bank when it reports earnings tomorrow, has a West Coast rival closing in: Wells Fargo & Co. JPMorgan is projected to report a record $18.5 billion in 2011 earnings when adjusted for one-time items, a 6 percent increase for the New York-based company, according to a survey of analysts by Bloomberg. Profit at San Francisco-based Wells Fargo is estimated to have jumped more than four times as much, to an all-time high of $15.3 billion.

Sears Holdings slumped 3.7 percent to $31.70 after two people familiar with the situation said suppliers will no longer be able to get loans from CIT for their shipments to the retailer. CIT, the largest U.S. company that provides what’s known as factoring, told clients it would no longer approve credit for orders starting today, according to the people, who declined to be identified because the information isn’t public.

Fertilizer producers sank. CF, the biggest U.S. producer of nitrogen-based crop nutrients, declined 1.4 percent to $164.80.

Mosaic, the biggest maker of phosphate fertilizer, dropped 1.7 percent to $54.13.

Wynn Resorts Ltd. tumbled 3.8 percent to $107.64. Vice Chairman Kazuo Okada sued the casino operator for access to financial records in a dispute with the company over the use of funds.

Dow Chemical Co. rallied 2.7 percent to $32.27. The European Union removed tariffs against the U.S. on a chemical used in paints and paper coatings after U.K. producer Ineos Oxide Ltd. withdrew a complaint about price undercutting. The policy reversal ends duties as high as 13.8 percent on U.S. exporters including Dow Chemical for allegedly having sold vinyl acetate in the EU below cost, a practice known as dumping.

CA Inc. shares rose 4.1 percent, the biggest advance in the S&P 500, to $21.80. Hedge fund Taconic Capital Advisors LP said it acquired a 5.1 percent stake in the maker of software for mainframe computers and is in talks with management to boost returns.

Target Corp. added 0.5 percent to $49.28. The company will buy back as much as $5 billion of its shares as the second- largest U.S. discount retailer forecasts it will generate more cash than needed to invest in its stores.

The 12 percent rally in the S&P 500 since November has pushed optimism to a level last seen when the U.S. stock market began its biggest retreat since 2009.

The proportion of investment newsletter writers who are optimistic on equities rose to 51.1 percent this week, the highest since May, according to a report from New Rochelle, New York-based Investors Intelligence yesterday. Last year’s peak in bullishness was just before the market’s top in April.

Some analysts say sentiment serves as a contrary indicator given that optimistic investors have already purchased shares, leaving less money to help drive prices higher. The S&P 500 has climbed in four out of the past six weeks, touching a five-month intraday high of 1,296.46 on Jan. 10, as data on manufacturing and employment raised optimism the world’s largest economy will weather Europe’s sovereign debt crisis.

“Sentiment is getting more extreme,” Arthur Huprich, an analyst with Raymond James & Associates Inc., wrote in a note yesterday. “Trading will remain choppy, especially as overhanging selling pressure looms.”

Have a wonderful day everyone.

Be magnificent!

 

Energy is action and movement.  All action is movement and all action is energy.

All desire is energy.  All feeling is energy.  All thought is energy.

All living is energy.  All life is energy.

If that energy is allowed to flow without any contradiction,

without any friction, without any conflict, then that energy is boundless, endless.

When there is no friction there are no frontiers to energy.

It is friction which gives energy limitations.  So, having once seen this,

why is it that the human being always brings friction into energy?

Why does he create friction in this movement which we call life?

Is pure energy, energy without limitations just an idea to him?

Does it have no reality?

-Krishnamurti, 1895-1986

 

As ever,

Carolann

 

We can draw lessons from the past,

but we cannot live in it.

-Lyndon B. Johnson, 1908-1973

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,