Dear Friends,
Today is William Wordsworth’s birthday, born on April 7th, 1770, so I thought it fitting to remember him with one of his beloved poems:
The Daffodils
I wandered lonely as a cloud
That floats on high o’er vales and hills,
When all at once I saw a crowd,
A host of golden daffodils,
Beside the lake, beneath the trees
Fluttering and dancing in the breeze.
Continuous as the stars that shine
And twinkle on the milky way,
They stretched in never-ending line
Along the margin of a bay:
Ten thousand saw I at a glance
Tossing their heads in sprightly dance.
The waves beside them danced, but they
Out-did the sparkling waves in glee:
A poet could not but be gay
In such a jocund company!
I gazed – and gazed – but little thought
What wealth the show to me had brought:
For oft, when on my couch I lie
In vacant or in pensive mood,
They flash upon that inward eye
Which is the bliss of solitude;
And then my heart with pleasure fills,
And dances with the daffodils.
-William Wordsworth
photos of the day
April 7, 2011
The sculpture ‘Rainforest tree,’ at 141 feet, towers over the space in the Gasometer in Oberhausen, Germany. The giant tree, by artist Wolfgang Volz, transforms the industrial colossus into a cathedral of nature and is part of the new UNESCO exhibition ‘Magic places – nature and culture monuments of the world.’ Martin Meissner/AP
During a photocall at the London Zoo, a Bolivian squirrel monkey checks sunglasses with bitter apple smeared on them to deter monkeys from stealing visitors’ sunglasses. Zookeepers decided to train the monkeys to stop them from grabbing people’s sunglasses as monkeys don’t like the taste of anything sour. Matt Dunham/AP
Market Commentary:
Canada
By Matt Walcoff
April 7 (Bloomberg) — Canadian stocks fell for a second day after European Central Bank President Jean-Claude Trichet suggested interest rates may increase further and a new earthquake hit Japan.
Bank of Montreal lost 1 percent after the ECB boosted its benchmark interest rate by 0.25 percentage point. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 1.6 percent after a Mosaic Co. executive said shareholders may sell as much as 35 percent of Mosaic’s stock. MKS Inc., which makes software for computer programmers, soared 37 percent after agreeing to a takeover offer.
The Standard & Poor’s/TSX Composite Index slipped 94.88 points, or 0.7 percent, to 14,107.77.
“The third-largest economy in the world just had a 7.1 earthquake,” said Keith McLean, who oversees C$150 million
($156 million) as a money manager at GMP Investment Management in Toronto. “If this is indicative there could be more geological instability, it could lead to more problems.”
The index had rallied 4.8 percent from March 15 to yesterday as gold and copper futures surged at least 4.7 percent as the U.S. dollar dropped against 14 of 16 other major currencies. The greenback had declined on speculation the U.S.
Federal Reserve will raise interest rates more slowly than other central banks.
The European Central Bank boosted its benchmark interest rate to 1.25 percent from 1 percent today in a move forecast by all 57 economists in a Bloomberg survey. In a press conference, Trichet said inflation risks remain and the bank will “always do what is necessary to deliver price stability over the medium term.”
Stocks extended their losses after the earthquake struck Japan. The U.S. Geological Survey measured today’s tremor as magnitude 7.1, the strongest since the devastating magnitude-9 temblor of March 11.
The S&P/TSX Financials Index fell for a third day. Canadian Imperial Bank of Commerce, Canada’s fifth-largest lender by assets, declined 1 percent to C$83.92. Bank of Montreal, the country’s No. 4 bank, lost 1 percent to C$62.70. Toronto- Dominion Bank, the second-biggest lender, decreased 1.1 percent to C$84.50.
Fertilizer producers retreated after Mosaic Chief Financial Officer Larry Stranghoener said as many as 157 million shares might be sold in a secondary offering next month as part of Cargill Inc.’s plan to sell its controlling stake.
Potash Corp. fell 1.6 percent to C$56.55. Agrium Inc., Canada’s second-largest fertilizer producer, dropped 1 percent to C$88.54.
Gold stocks declined for the first time in four days as the commodity fluctuated. Barrick Gold Corp., the world’s largest gold producer, lost 1 percent to C$51.50. Eldorado Gold Corp., which mines in China and Turkey, decreased 1.3 percent to C$16.48. Agnico-Eagle Mines Ltd., Canada’s fifth-largest gold producer, slipped 1.2 percent to C$62.80.
An index of base-metals and coal producers retreated the most in eight days. Teck Resources Ltd., Canada’s largest company in the industry, retreated 2 percent to C$55.06.
SouthGobi Resources Ltd., which mines coal in Mongolia, fell 2.9 percent to C$13.92.
First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, dropped for the first time in eight days, slumping 4.9 percent to C$135.09. The shares had risen to their highest price relative to earnings since 2009.
MKS surged 37 percent to C$26.01, the highest level since August 2000, after Parametric Technology Corp. agreed to buy the Waterloo, Ontario-based company for C$26.20 a share in cash. The shares’ rally was their biggest one-day advance ever.
Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, declined 1.8 percent to C$46.40.
In a letter dated yesterday, U.S. Sen. Ron Wyden asked the Federal Trade Commission to investigate the pricing policies of Canadian oil shippers including Canadian Natural.
Brookfield Asset Management Inc., the country’s biggest real estate company, lost 2.9 percent to C$30.70. The shares have slumped 3.6 percent since April 4, when Bloomberg News reported that Brookfield is among companies that have expressed interest in buying properties from Charter Hall Office REIT.
Bankers Petroleum Ltd., which produces oil and gas in Albania, jumped 5.5 percent to C$8.82 after releasing an operations update. The company is producing more fuel than David Dudlyke, an analyst at Stifel Financial Corp., had forecast, Dudlyke wrote in a note to clients.
US
By Rita Nazareth
April 7 (Bloomberg) — U.S. stocks fell, dragging the Dow Jones Industrial Average down from an almost three-year high, as another earthquake shook Japan and a dispute over the federal budget threatened to shut down the American government.
Caterpillar Inc., the largest maker of construction equipment, slid 1 percent to lead declines in the Dow. The iShares MSCI Japan Index Fund, an exchange-traded security tracking the nation’s equities, fell 0.8 percent. Gap Inc. dropped 1.5 percent as the largest U.S. apparel chain reported a 10 percent slump in same-store sales. KLA-Tencor Corp. sank 4.6 percent after Citigroup Inc. advised selling rival semiconductor-equipment maker Lam Research Corp.
The S&P 500 lost 0.2 percent to 1,333.51 at 4 p.m. in New York, after dropping as much as 0.7 percent. The Dow, which climbed yesterday to the highest level since June 2008, slipped 17.26 points, or 0.1 percent, to 12,409.49 today.
“It’s body blow after body blow,” said Matt McCormick, a Cincinnati-based money manager at Bahl & Gaynor Inc., which oversees $3.6 billion. “The market has faced a series of black swans. We don’t know the impacts of the Japan situation. We don’t know what will happen in the Middle East. In addition, people are skittish because of all the budget discussion and concern about the future of monetary and fiscal policies.”
The S&P 500 has risen 6 percent in 2011 as government stimulus measures and higher-than-estimated profits boosted investors’ optimism. The benchmark gauge fell on April 5 as minutes from the Federal Reserve’s last meeting spurred speculation central bankers may begin removing record stimulus measures enacted to ensure the economy recovered from recession.
A 7.1-magnitude earthquake spared the stricken Fukushima Dai-Ichi nuclear plant in Japan, although workers struggling to cool radioactive fuel were evacuated, Tokyo Electric Power Co. said based on its initial assessment. The aftershock was the second-strongest since a record 9-magnitude earthquake and tsunami on March 11. No unusual conditions were observed at the plant afterward, the utility, known as Tepco, and Japan’s Nuclear and Industrial Safety Agency said in statements.
Crude rose above $110 a barrel for the first time in 30 months as a fire burned at Libya’s Sarir field, bolstering concern that unrest in North Africa and the Middle East will spread, curbing shipments. NATO said forces loyal to Muammar Qaddafi caused a fire at the field, according to Al Arabiya television. The conflict in Libya is currently in a stalemate, said Army General Carter Ham, the U.S. commander for Africa.
The U.S. House approved a stopgap spending bill to keep the government open through next week, although President Barack Obama said he would veto the measure and a shutdown still looms.
The measure, passed 247-181, would cut another $12 billion in spending this year and fund the Pentagon at current levels through Sept. 30. Senate Majority Leader Harry Reid, a Nevada Democrat, called the bill a “non-starter.”
House Speaker John Boehner said there was no agreement on a budget reached at a White House meeting with President Obama and Senate Majority Leader Reid. “We’re not there yet,” Boehner, an Ohio Republican, said outside the White House. Reid, a Nevada Democrat, said he was “disappointed” that negotiations haven’t resolved the issue.
A failure by Congress to extend the government’s spending authority, which expires tomorrow, would force the closure of national parks, monuments and museums. Federal agencies — such as the National Labor Relations Board — that don’t protect lives, property or national security also would be shuttered.
Stock futures fell before the open of exchanges as European Central Bank President Jean-Claude Trichet said today’s interest-rate increase is not necessarily the start of a series. “We did not decide that it was the first of a series of interest-rate increases,” Trichet said at a press conference in Frankfurt after the ECB raised its benchmark rate to 1.25 percent from a record low of 1 percent.
The S&P 500 has closed every session this month less than 1 percent below its 2011 high of 1,343.01 set on Feb. 18, causing investors to question whether the index will set a new high or head lower in a so-called double top.
“The big question with the indexes is, will this be a double top or not?” said Kurt Kinker, chief market analyst at Mirus Futures in Chicago. “We’re holding these 1,330s in the S&Ps. And whether they can break out above the February highs or whether they’ll head south, that’s the question.”
Gap slumped 1.5 percent to $22.72. Same-store sales dropped 10 percent, compared with the estimated decline of 7.3 percent.
Last month’s earthquake and tsunami in Japan, where the retailer has more than 150 stores, cut into results, Chief Executive Officer Glenn Murphy said in a statement.
KLA-Tencor fell the most in the S&P 500, sinking 4.6 percent to $44.06. Lam Research dropped 5 percent to $53.52. The maker of chip-manufacturing equipment may disappoint investors when reporting earnings for the current quarter as demand slows, Citigroup wrote in a note, in which it added the idea of selling the shares its Top Picks Live! list.
Bed Bath & Beyond Inc. gained 10 percent to $54.55. The home furnishings retailer forecast annual earnings of $3.38 to $3.53 a share. That compares with the average analyst projection of $3.33, Bloomberg data show.
Costco Wholesale Corp. rose 3.8 percent to $77.82. The largest U.S. warehouse-club chain reported total comparable sales rose 13 percent in March, beating the 7.4 percent estimate.
Fewer Americans filed first-time claims for unemployment insurance last week. Applications for jobless benefits fell 10,000 in the week ended April 2 to 382,000, the fewest since Feb. 26, Labor Department figures showed. Economists projected claims would be little changed at 385,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those collecting extended payments decreased.
Consumer confidence in the U.S. rose for a second consecutive week as an improving job market helped ease the burden of higher fuel costs. The Bloomberg Consumer Comfort Index climbed to minus 44.5 in the period ended April 3 from minus 46.9 the prior week. A measure of Americans’ views of their own finances increased to the second-highest level since January 2010, while a gauge of perceptions of the economy advanced from a two-year low.
“The economy is certainly improving,” said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages about $3 billion in San Antonio. “There’s a glimmer of hope that the jobs market is getting better. The consumer seems to be back.
The two wild cards will be monetary and fiscal policies.”
Have a wonderful evening everyone.
Be magnificent!
The Upanishad tells us: Know the soul that is your own.
In other words: Realize the grand unique principle of the whole that is in all men.
-Rabindranath Tagore, 1861-1901
As ever,
Carolann
I am not afraid of the pen, or the scaffold,
or the sword. I will tell the truth wherever
I please.
-Mother Jones, 1837-1930
Carolann Steinhoff, B.Sc., CFP, CIM, FCSI
Senior Vice-President & Senior Investment Advisor
American Matthew Harding (center) performs with his fans and followers at a compound in Beijing on Feb. 19. Harding is an Internet celebrity known as Dancing Matt for his viral videos “Where The Hell Is Matt,” which show him dancing in front of landmarks and street scenes in various countries. (Andy Wong/Associated Press)
member of the Canadian dance troupe “The 7 fingers” rehearses in Bogota on Feb. 8. (John Vizcaino/Reuters)
