Category: Newsletters

Dear Friends,

 

Tangents:

March 1^st, 1954: US sets off H-Bomb on Bikini Atoll

One thousand times more lethal than the bomb that destroyed Hiroshima in 1945, the most powerful thermonuclear explosion ever detonated by the United States went off at 6:45 a.m. in Pacific Proving Grounds, on Bikini Atoll in the Marshall Islands.  The 10.7-tonne device – code-named Operation Castle Bravo – carried a yield of 15 megatons, nearly three times what scientists had predicted.  The fireball was visible 450 kilometers away, and its mushroom cloud contaminated some 7,000 square miles of ocean.  Proving ground, indeed:  although Bikini had been evacuated, the debris sickened thousand on surroundings island and the 23-man crew of the inaptly named Lucky Dragon 5, a Japanese fishing trawler.  But the fallout also catalyzed a growing and ultimately successful movement to ban atmospheric testing. –Michael Posner, Globe & Mail, March 1, 2012.

 

I thought love was only true in fairy tales
Meant for someone else but not for me
Ah, love was out to get to me
That’s the way it seemed
Disappointment haunted all my dreams.
The Monkees, “I’m a Believer”
Davy Jones (30 December 1945 – 29 February 2012)

 

photos of the day

March 1, 2012

Luna, a black lab mix, frolics in the snow in East Derry, N.H. New Hampshire is expected to receive about a foot of snow from a winter storm.

Charles Krupa/AP

People sit in the sunshine in St James’s park in central London.

Paul Hackett/Reuters

 

Market Closes for March 1, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	12980.30	+28.23
		+0.22%
S&P 500	1374.09	+8.41
		+0.62%
NASDAQ	2988.97	+22.08
		+0.74%
TSX	12723.46	+79.45
		+0.63%

International Markets

Market Index	Close	Change
NIKKEI	9707.37	-15.87
		-0.16%
HANG SENG	21387.96	-292.12
		-1.35%
SENSEX	17583.97	-168.71
		-0.95%
FTSE 100	5931.25	+59.74
		-+1.02%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.006	1.989
CND. 30 Year Bond	2.614	2.598
U.S. 10 Year Bond	2.0261	1.9722
U.S. 30 Year Bond	3.1476	3.0808

Currencies

BOC Close	Today	Previous
Canadian $	1.01446	1.01048
US $	0.98575	0.98963
Euro Rate 1 Euro=		Inverse
Canadian $	1.31226	0.76193
US $	1.33129	0.75115

Commodities

Gold	Close	Previous
London Gold Fix	1721.00	1695.90
Oil	Close	Previous
WTI Crude Future	108.85	106.88

Market Commentary:

Canada

By Matt Walcoff

March 1 (Bloomberg) — Canadian stocks rose as Royal Bank of Canada and Toronto-Dominion Bank, the nation’s biggest lenders, paced gains among financial companies after boosting their dividends following higher-than-estimated earnings.

Royal Bank gained 2 percent, and TD rallied 1.5 percent.

Bombardier Inc., a maker of trains and airplanes, slumped 9.5 percent after missing analysts’ average sales estimate for a third straight quarter. Ithaca Energy Inc., which explores for oil and gas in the North Sea, jumped 13 percent after saying it received more interest in a possible takeover.

The S&P/TSX Composite Index advanced 79.45 points, or 0.6 percent, to 12,723.46.

“The markets were clearly surprised,” Andrew Pyle, an associate money manager on a Bank of Nova Scotia team that oversees about C$200 million ($200 million), said in a phone interview from Peterborough, Ontario. “A lot of investors thought the financials would keep money tight to the vest.”

The S&P/TSX gained 5.8 percent in January and February, its best start to a year since 2004, as U.S. unemployment dropped to the lowest in almost three years, Greece agreed to terms for a second bailout and oil prices advanced on tension between Iran and Western countries.

Royal Bank’s first-quarter earnings beat the average analyst estimate in a Bloomberg survey by 9.7 percent, excluding certain items. The company raised its quarterly dividend 5.6 percent. TD, its largest domestic rival, surpassed forecasts excluding certain items by 5.1 percent and increased its payout

5.9 percent.

The S&P/TSX Financials Index rallied to the highest level since July. Royal Bank climbed 2 percent to C$56.80, extending its streak of gains, the longest in two years, to eight days. TD rose 1.5 percent to C$82 after closing at the highest since July yesterday. Manulife Financial Corp., North America’s third- largest insurer, gained 2.1 percent to C$12.64.

Raw-materials producers advanced as gold rebounded from yesterday’s 4.3 percent plunge and copper climbed on the Comex in New York.

Goldcorp Inc., the world’s second-largest gold producer by market value, rose 2 percent to C$48.91. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, gained 3.5 percent to C$23.43 after China reported manufacturing growth accelerated last month. Ivanhoe Mines Ltd., Rio Tinto Group’s majority-owned partner in Mongolia’s Oyu Tolgoi project, rallied 5.5 percent to C$18.11.

China Gold International Resources Corp. tumbled 8.1 percent to C$3.98 as the metal fell 3.9 percent in Shanghai.

Bombardier sank 9.5 percent, the most since March 2009, to

C$4.30 after reporting fourth-quarter sales that trailed the average analyst estimate in a Bloomberg survey by 9 percent. The company forecast a fifth straight annual decline in aircraft deliveries this year.

Timothy James, an analyst at TD, cut his rating on the shares to hold from buy. Cameron Doerksen of National Bank of Canada reduced his rating on Bombardier to sector perform from outperform, meaning the shares will perform in line with the industry over the next 12 months.

Oil and gas producers advanced as crude oil touched $110 a barrel in electronic trading in New York.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, increased 1.9 percent to C$37.41. Cenovus Energy Inc., Canada’s fifth-biggest company in the industry by revenue, climbed 1.3 percent to C$38.95.

Precision Drilling Corp., the country’s largest drilling company, rallied 5.2 percent to C$12.60.

Ithaca Energy soared 13 percent to C$3.20, the highest close since January 2008, after saying it has “received unsolicited interest from a number of third parties.” The company said Jan. 23 it had received a takeover proposal.

Research In Motion Ltd. fell 4.9 percent to C$13.35 after Peter Misek, an analyst at Jefferies Group Inc., said the BlackBerry maker is likely to estimate quarterly earnings below the average analyst forecast. Misek cut his 12-month price estimate on RIM’s U.S.-traded shares to $12 from $15.

Calfrac Well Services Ltd. advanced 8.7 percent to C$35.15 after Moody’s Investors Service raised its credit rating to Ba3 from B1. Ratings in the Ba category have “substantial” credit risk rather than “high” risk as in the B category. Terry Marshall, an analyst at Moody’s, cited higher spending by oil and gas producers as a reason for the upgrade in a note.

Calfrac shares have jumped 26 percent since Feb. 27 for the biggest three-day gain since March 2004.

Yoga-wear retailer Lululemon Athletica Inc. increased 5.4 percent to a record C$69.86 after Jim Duffy, an analyst at Stifel Financial Corp., boosted his 12-month price forecast on its U.S. shares to $77 from $70. Stifel’s checks have found “positive consumer response to new styles and color palettes”

as well as changes to Lululemon’s website, Duffy wrote in a note to clients. The company’s market value surpassed C$10 billion.

US

By Rita Nazareth

March 1 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level since 2008, amid a rally in financial shares and after government data showed that jobless claims declined to a four-year low.

JPMorgan Chase & Co. and Bank of America Corp. climbed at least 1.8 percent as Spanish and French borrowing costs fell.

ConocoPhillips added 2.2 percent, pacing gains in energy producers, as crude oil traded near $110 a barrel. Gap Inc., the largest U.S. apparel chain, increased 7.2 percent as same-store sales exceeded estimates. General Motors Co. jumped 1.7 percent after the automaker reported a surprise U.S. sales gain.

The S&P 500 added 0.6 percent to 1,374.09 at 4 p.m. New York time, after a three-month gain. The Dow Jones Industrial Average rose 28.23 points, or 0.2 percent, to 12,980.30.

“We’re not lighting the world on fire, but we’re seeing improvement in the economy,” said Mark Masterson, managing director and partner at HighTower’s Masterson, Emma & Associates in Naples, Florida. Hightower has over $25 billion in assets.

“The risk from the European situation has been reduced. I don’t know that it’s been eliminated. Best I can say at this point is that it appears to have been postponed.”

Equities rose as the number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing. Gains in Europe also helped lift the S&P 500 after Spain and France sold 12.5 billion euros ($16.7 billion) of bonds as the European Central Bank’s long-term refinancing operation of lending to banks helped spur demand.

Financial shares had the biggest gain in the S&P 500 among

10 industries, adding 1.2 percent. JPMorgan increased 2.9 percent, the most in the Dow, to $40.37. Bank of America had the second-largest advance in the 30-stock gauge, climbing 1.9 percent to $8.12.

Goldman Sachs Group Inc. jumped 5.2 percent to $121.13. The fifth-biggest U.S. bank by assets agreed to buy Ariel Holdings Ltd.’s Bermuda-based insurance and reinsurance businesses to expand property and casualty coverage.

Benchmark gauges briefly pared gains as oil jumped after a report of an explosion on a pipeline in Saudi Arabia. A government official said late today there was no sabotage to its oil facilities in the Qatif region. Energy shares in the S&P 500 added 0.9 percent as a group. ConocoPhillips gained 2.2 percent to $78.22.

“U.S. stocks and economic data appear to be moving at least two steps forward for every step back which, we believe, leads to a strengthening trend for both,” said Kully Samra, who manages U.K.-based clients for Charles Schwab Corp., which has

$1.6 trillion of assets globally. “Rising oil prices are a risk to global growth, but we’re optimistic the improved environment will keep the recovery in motion.”

Gap surged 7.2 percent, the most in the S&P 500, to $25.05.

Sales climbed 4 percent, beating the average projection for a

1.4 percent drop from analysts surveyed by Retail Metrics Inc.

Unseasonably warm weather boosted purchases of spring merchandise.

Car companies had the biggest gain in the S&P 500 among 24 industries, rallying 2.1 percent. GM added 1.7 percent to $26.47 as deliveries rose 1.1 percent in February to 209,306 cars and light trucks, beating analysts’ estimates for a 4.8 percent drop. Ford Motor Co. climbed 2.3 percent to $12.66 after sales also topped analysts’ estimates.

Advanced Micro Devices Inc. climbed 2.2 percent to $7.51.

The second-largest maker of processors for personal computers said it will pay $334 million to buy SeaMicro Inc., a chip designer with expertise in servers, adding technology that can help it compete with Intel Corp. in the market for data centers.

Monster Worldwide Inc. surged 15 percent to $8.01. The world’s largest online-recruiting company said it’s considering “all other strategic alternatives” to boost shareholder value.

Apple Inc. rose 0.4 percent to a record $544.47, gaining for a sixth day. Now that its market value has exceeded $500 billion, the biggest challenge for the maker of iPads may be staying there. It’s the sixth U.S. company crossing the threshold, data compiled by S&P show. The others are Microsoft Corp., General Electric Co., Cisco Systems Inc., Intel Corp. and Exxon Mobil Corp., in chronological order.

All five companies were below $500 billion a year after reaching that pinnacle, according to data compiled by Bloomberg.

GE was the only one to surpass that value afterward.

Today’s advance extended this year’s rally in the S&P 500 to 9.3 percent. Yet the index trades at about 14.2 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.

The S&P 500 has the potential to reach 1,700 before the end of the year should the economy surprise investors the same way falling bond rates did in 1995, Birinyi Associates Inc. said.

An expansion that beat forecasts would help stocks rally after economists tempered their estimate for growth in 2012 to

2.2 percent from 2.3 percent earlier in the year, according to Laszlo Birinyi, who was among the first to suggest buying stocks in 2009. The potential for surprise is similar to 1995, when the yield on the 30-year U.S. Treasuries fell 1.93 percentage points, even as Wall Street predicted they would gain.

“In 1995, the consensus trade was higher yields, today it is tepid economic growth and the market is suggesting — perhaps insisting — an alternative to that consensus,” Birinyi wrote.

“We would encourage a more aggressive posture.”

UBS AG raised its forecasts for the S&P 500 and its companies earnings amid a “dramatic” improvement in the economy. Jonathan Golub’s year-end forecast for the benchmark gauge rose to 1,475 from 1,325. He estimates earnings-per-share of $103 this year and $112 in 2013. The previous forecasts were

$99 and $111, respectively.

A measure of homebuilders in S&P indexes lost 0.9 percent.

PulteGroup Inc. slumped 2.6 percent to $8.59. KB Home fell 1.3 percent to $11.27.

Sotheby’s tumbled 9.1 percent to $35.75. The publicly traded auctioneer of fine arts and collectibles said fourth- quarter profit fell 26 percent as sales slid.

Smaller companies trailed larger stocks in the U.S. in February, a sign that the S&P 500’s longest monthly rally in a year may be losing momentum, according to Bespoke Investment Group LLC.

The Russell 2000 Index, which tracks companies with an average market value of $738 million, added 2.3 percent last month, compared with a 4.1 percent gain in the S&P 500, whose members average $25.9 billion in value. The underperformance accelerated in the second half of the month, with the Russell

2000 rising on two of the last nine days and the S&P 500 gaining during seven.

“Small caps are cyclical in nature, and typically perform better during market rallies,” Justin Walters, Bespoke’s co- founder, wrote in a note yesterday. “They haven’t been rallying recently, which should be cause of concern for market bulls.”

 

Have a wonderful evening everyone.

 

Be magnificent!

First of all, accept yourself.

When you do not accept yourself and imagine yourself to be someone different,

a conflict arises between what you believe you are and what you really are.

-Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

We must dare, and dare again, and go on daring.

-Georges Jacques Danton, 1759-1794

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

On this day…

February 29^th, 1984: Trudeau resigns as Prime Minister, after a walk in the snow.  Speaking of snow, one  of my clients who dropped by today with his RSP contribution told us there was major snow on the Malahat this morning as he was driving into town.  I was speaking with other clients this afternoon who are in Arizona where they have a second residence,  and they said they haven’t had rain for two months, sunshine every day, warm – and they also said that there are still incredible real estate bargains, especially at the high end of the market.  There is also a non-stop WestJet flight now.  🙂

Leap year: why we have a need for the occasional Feb. 29

The leap year is a testament to the tough time that humans have trying to organize 365 days, 5 hours, 49 minutes, and 16 seconds into a year.

By Pete Spotts,  February 29, 2012

If you were born on Feb. 29, 1988, you can claim with a wink that you’re only 6 years old. And if you’re a single woman with your eye on a special guy, this is the day to pop the question. If he refuses, by tradition he owes you.

The leap year is a testament to the tough time that humans have trying to squeeze the 365 days, 5 hours, 49 minutes, and 16 seconds of a year – as measured by one trip around the sun – into a yearly calendar containing 365 days.

RECOMMENDED: Leap year – this day in the history of Feb. 29

Knowing when to tack an extra day onto a year isn’t as simple as “add a day to February every four years.” That would be too easy.

For those who have trouble remembering the spelling rule, “I before E, except after C,” and its caveats, try this: If the year is evenly divisible by four, add a day to February – unless you can divide the year evenly by 100, then no leap day, unless the year is evenly divisible by 400, then you add a leap day.

It could be worse. If Julius Caesar hadn’t reformed the old Roman calendar (and no one else had in the meantime), we might still be adding a month to the calendar every two or three years. The Roman calendar was based on a lunar month, which averages 29.5 days. If you were big on festivals and a slave to your calendar, your spring planting festival could end up in the dog days of summer unless you brought the calendar back in sync with solar time.

Around 46 BC, Caesar stepped in and, one can imagine, said, “Ist es ridiculum!” He moved the calendar onto a solar year.

But even Julius didn’t get it quite right.

The Julian calendar is based on a year that is 365 days, 6 hours long. So you could add one day to February every four years from now until Brutus stopped by and be happy. However, if you did that, the equinoxes, as marked on the calendar, arrived earlier every year. The spring equinox, always a favorite among festival planners, arrived on March 25, when Caesar had completed his conquest of the calendar. By the 1500s, the spring equinox was cropping up on March 10 or 11.

Keep this up long enough, and Easter Sunday as marked on a calendar eventually would take place in the dead of winter. Easter Sunday is the first Sunday after the first full moon following the vernal equinox, keeping it close to the Jewish observance of Passover.  In the late 1500s, a continued shift of Easter and other Christian holy days did not sit well with the Vatican.

The result: The Gregorian calendar, which has since become the international standard as a general-purpose calendar for scheduling business meetings, mortgage payments, and Little League Games.

Still, variations on the lunar calendar – and the periodic additions of leap months – remain in place for religious and cultural purposes, largely within cultures that trace their roots to Asia and the Middle East.

But back to marriage. Remember we mentioned marriage? According to an Irish tradition, back in the day, St. Bridget cut a deal with St. Patrick allowing women to propose marriage to men on a leap day. In some areas that adopted the tradition, men were penalized if they refused the proposal. Small consolation, perhaps, but a “no” would leave the forlorn miss in line for a new gown or several pairs of new gloves.

These days, international time is determined by the vibrations of atoms in incredibly accurate atomic clocks, rather than by Earth’s rotation. This has added another kind of leap to the time-keeping lexicon: the leap second.

Keepers of atomic clocks periodically add or subtract one or two seconds a year to keep the clocks synced with a 24-hour day as measured by Earth’s rotation – which on average is gradually slowing. The first leap seconds were added in June and December 1972. The next leap second – the 25th since 1972 – is slated for this coming June.

Earlier this year, international time gurus meeting in Geneva considered a proposal to abolish the leap second. A final decision is expected in 2015.

photos of the day

February 29, 2012

A woman performs morning exercise with fans at the Ditan park in Beijing, China.

Andy Wong/AP

Feliciano Lopez of Spain reacts after he lost a point against Roger Federer of Switzerland during the Emirates Dubai ATP Tennis Championships in Dubai, United Arab Emirates.

Hassan Ammar/AP

 

Market Closes for February 29, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12952.07	-53.05
		-0.41%
S&P 500	1365.68	-6.50
		-0.47%
NASDAQ	2966.89	-19.87
		-0.67%
TSX	12644.01	-96.46
		-0.76%

International Markets

Market  Index	Close	Change
NIKKEI	9723.24	+0.72
		+0.01%
HANG  SENG	21680.08	+111.35
		+0.52%
SENSEX	17752.68	+21.56
		+0.12%
FTSE 100	5871.51	-56.40
		-0.95%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.989	1.975
CND.   30 Year Bond	2.598	2.594
U.S.   10 Year Bond	1.9722	1.9324
U.S.   30 Year Bond	3.0808	3.0641

Currencies

BOC Close	Today	Previous
Canadian  $	1.01048	1.0001
US   $	0.98963	0.99563
Euro Rate  1 Euro=		Inverse
Canadian   $	1.31888	0.75822
US  $	1.33270	0.75035

Commodities

Gold	Close	Previous
London Gold Fix	1695.90	1786.70
Oil	Close	Previous
WTI Crude Future	106.88	106.64

Market Commentary:

Canada

By Matt Walcoff

Feb. 29 (Bloomberg) — Canadian stocks fell, paring a second-straight monthly gain, as gold-mining companies dropped after Federal Reserve Chairman Ben S. Bernanke damped speculation of more quantitative easing.

Barrick Gold Corp., the world’s largest gold producer, declined 3.6 percent as the metal retreated after settling at a three-month high yesterday. Suncor Energy Inc., Canada’s biggest oil and gas producer, lost 1 percent after the U.S. reported an increase in crude inventories. Progressive Waste Solutions Ltd., the nation’s biggest waste-management company, slumped 5.8 percent after forecasting 2012 profit excluding certain items below analysts’ estimates.

The S&P/TSX Composite Index slipped 94.43 points, or 0.7 percent, to 12,646.04 at 1:59 p.m. Toronto time, narrowing the monthly advance to 1.5 percent. Before Bernanke’s comments today, Toronto stocks were up as much as 0.4 percent on the day.

“It looks like QE3 is off the table,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview, referring to a third round of Fed asset purchases. The firm oversees about C$5.5 billion ($5.6 billion).

“There was some segment of the investor population that thought it was on. The golds are getting crushed.”

The index had gained 2.3 percent this month through yesterday as the U.S. reported improved economic data and Greek and European officials reached a deal on a second bailout for the country.

The S&P/TSX Materials Index fell the most this year after Bernanke gave no sign that the Fed is considering a new round of asset purchases in testimony to a congressional committee. Gold tumbled as much as 4.7 percent, most intraday since Dec. 14.

Barrick dropped 3.6 percent to C$47.50. Goldcorp Inc., the world’s second-largest gold producer by market value, declined 4 percent to C$47.80. Silver Wheaton Corp., Canada’s third-largest precious-metals producer, lost 5.1 percent to C$37.68 as silver sank the most intraday since September.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, retreated 1.6 percent to C$46.12 after Andrew Benson, an analyst at Citigroup Inc., said potash prices will be weaker than those of other nutrients in the first half of the year.

“There is ample supply, key producers had to cut production due to lack of demand and the buyer’s market seems more pronounced than in other fertilizers,” Benson wrote in a note to clients about Kassel, Germany-based producer K+S AG today.

The S&P/TSX Energy Index fell with crude oil after the U.S. Energy Department said supplies of the fuel increased 4.16 million barrels last week. None of the 12 analysts in a Bloomberg survey had forecast a gain that large. Suncor dropped 1 percent to C$35.93.

Canadian Natural Resources Ltd., the country’s second- biggest energy company by market value, declined 1.6 percent to C$36.89 after Paul Sankey, an analyst at Deutsche Bank AG, reduced his rating on the stock to hold from buy. Sankey cited a possible decline in world oil demand in a note to clients.

Enbridge Inc., Canada’s largest pipeline company, decreased 1.6 percent to C$38.07 after Theodore Durbin, an analyst at Goldman Sachs Group Inc., cut his rating on the shares to neutral from buy. A neutral rating means the analyst recommends neither buying nor selling the shares.

Petrominerales Ltd., which produces oil and gold in Colombia, advanced 5.4 percent to C$18.67 after tumbling a record 25 percent in the previous two days. The company reported a 14 percent drop in energy reserves Feb. 27.

Progressive Waste Solutions plunged 5.8 percent to C$20.30 after forecasting 2012 earnings of $1.13 a share to $1.17 a share, excluding certain items. Analysts had estimated profit of $1.19 a share, according to the average in a Bloomberg survey.

The shares sank as much as 11 percent, the most intraday since November 2008, earlier today.     aleant Pharmaceuticals International Inc., Canada’s biggest drug maker, rose 3.1 percent to C$52.35 to extend its three-day surge to 9 percent. The company disclosed fourth- quarter earnings that beat all 17 analyst estimates in a Bloomberg survey Feb. 27.

Calfrac Well Services Ltd. rallied 7.2 percent to C$32.57 after jumping 9.4 percent yesterday. The company reported fourth-quarter earnings yesterday that beat the average analyst estimate in a Bloomberg survey by 19 percent, excluding certain items.

Lara King, an analyst at Stifel Financial Corp., raised her 12-month share-price estimate to C$62 from C$56 today.

“We are calling for strong demand for all of Calfrac’s services from rejuvenated oil plays in 2012 and 2013,” she wrote in a note to clients.

Cogeco Cable Inc., the Montreal-based cable-television provider, gained 5.1 percent to C$49.80 after selling its Portuguese unit to Altice, a Luxembourg-based owner of communications companies, for 45 million euros ($60 million).

Cogeco Cable wrote off its investment in the unit last year after buying it for 464.9 million euros in 2006.

Cogeco Cable soared as much as 5.6 percent, the most intraday in two years, earlier today.

US

By Rita Nazareth

Feb. 29 (Bloomberg) — U.S. stocks fell, trimming the longest monthly rally in a year for the Standard & Poor’s 500 Index, as Federal Reserve Chairman Ben S. Bernanke gave no indication of further measures to stimulate the economy.

Commodity shares had the biggest decline in the S&P 500 among 10 groups as gold tumbled the most since December. Newmont Mining Corp., the largest U.S. gold producer, slumped 4.2 percent. First Solar Inc., the world’s largest maker of thin- film solar panels, retreated 11 percent after reporting an unexpected loss. Apple Inc. topped $500 billion in market capitalization for the first time, rising 1.3 percent.

The S&P 500 fell 0.5 percent to 1,365.68 at 4 p.m. New York time, retreating from an almost four-year high. It still rose 4.1 percent in February, capping a third straight month of gains. The Dow Jones Industrial Average lost 53.05 points, or 0.4 percent, to 12,952.07. The Nasdaq Composite Index topped 3,000 for the first time since 2000 before falling 0.7 percent to 2,966.89. The Russell 2000 Index slid 1.6 percent to 810.94.

“We have a bit of investor nosebleed,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland.

“There are still things to worry about. With the absence of more stimulus, that would lead us to question: what’s there to move us out of some of that? In addition, we’ve had a big run-up in stocks. No trees grow to the sky.”

The S&P 500 has risen 8.6 percent this year on better-than- estimated economic data. Measures of technology and financial shares had the biggest gains among 10 groups in 2012, adding at least 13 percent. The Dow, which yesterday topped 13,000, capped its fifth straight month of gains.

Stocks fell as Bernanke also said in congressional testimony that the job market remains “far from normal” and rising oil prices may cause inflation to grow temporarily.

Earlier today, stocks gained as data showed the U.S. economy expanded more than forecast and business activity accelerated.

“It doesn’t matter if you’re a bull or a bear, you have to acknowledge that the economy is growing,” Ethan Anderson, senior portfolio manager for Rehmann Financial in Grand Rapids, Michigan, said in a telephone interview. His firm manages $1.5 billion. “Yet the market is like a roller-coaster. People want to ride it, but you got to give them a chance to get off. Once that happens, it can continue to move higher.”

Commodity shares in the S&P 500 fell 1.7 percent as a group. Newmont Mining slid 4.2 percent to $59.43. Alcoa Inc. declined 1.9 percent to $10.17.

First Solar tumbled 11 percent, the biggest decline in the S&P 500, to $32.30. The company also reduced its 2012 revenue forecast to $3.5 billion to $3.8 billion, compared with a December forecast of $3.7 billion to $4 billion.

Staples Inc. declined 8.4 percent to $14.66. The world’s largest office products company gave a 2012 forecast that was “lower quality” than analysts expected, Jefferies Group Inc.’s Daniel Binder wrote in a report.

MetroPCS Communications Inc. dropped 6.5 percent to $10.30.

The Texas-based pay-as-you-go wireless carrier was cut to “neutral” from “buy” at UBS AG.

DreamWorks Animation SKG Inc. lost 12 percent, the most since July 2005, to $17.26. The maker of the “Kung Fu Panda” films said fourth-quarter profit tumbled 72 percent as DVD sales declined.

Apple rose 1.3 percent to a record $542.44, gaining for a fifth day. Apple investors are anticipating a sales boost from the company’s latest iPad tablet computer, due on March 7.

They’re also banking on a new iPhone coming by the third quarter and the possibility of Apple offering a dividend, its first since 1995, said Howard Ward, a money manager at Gamco Investors Inc. in Rye, New York. Demand for Apple’s products has helped the company increase profit faster than its stock price, making the price-to-earnings ratio more favorable, he said.

“Impressively, its market cap has risen to the $500 billion level as its price-to-earnings multiple has actually contracted,” said Ward, who helps oversee $36 billion in assets. “At 12 times this year’s expectation of earnings, it stands in stark contrast to the experience of Cisco Systems, which sold at over 100 times earnings when it approached the $500 billion level in 2000.”

A measure of homebuilders in S&P indexes climbed 3.6 percent as a weekly survey by International Strategy & Investment Group showed an index of homebuilder activity rose to the highest level since April 2006.

Toll Brothers Inc. jumped 4.6 percent to $23.46. Chief Executive Officer Douglas Yearley Jr. told CNBC yesterday that orders for the spring season have surged 45 percent. PulteGroup Inc. added 6.3 percent to $8.82. Lennar Corp. rose 3.9 percent to $23.38.

BlackRock Inc.’s Laurence D. Fink said savers need to become more aggressive investors as returns on bank accounts and Treasuries shrink and people grow older. The traditional mix of putting 60 percent of assets in stocks and 40 percent in bonds is inadequate in a “new world” characterized by an aging population, a reduction in borrowing and risk-taking by individuals and governments, and a greater role of emerging economies.

“I’ve personally said I would be 100 percent in equities,” Fink, 59, said in prepared remarks today to the Council on Foreign Relations in New York. “Most investors need a more diversified portfolio, but virtually every investor has to find ways to achieve better returns than they’ll get in cash or government bonds for the foreseeable future.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

 

Fear is one of the greatest problems in life.  A mind that is caught in fear lives in confusion, in conflict, and therefore must be violent, distorted and aggressive.

-Krishnamurti, 1895-1986

 

 

As ever,

 

Carolann

 

The first time I see a jogger smile,

I’ll consider it.

-Joan Rivers, 1933-

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Don’t forget – tomorrow is the last day for RSP contributions that can be used to reduce the tax burden for 2011 income.

 

Tangents:

THE NEW SONG

For some time I thought there was time

and that there would always be time

for what I had a mind to do

and what I could imagine

going back to and finding it

as I had found it the first time

but by this time I  do not know

what I thought when I thought back then

 

there is no time yet it grows less

there is the sound of rain at night

arriving unknown in the leaves

once without before or after

then I hear the thrush waking

at daybreak singing the new song

 

-W.S. Merwin

 

photos of the day

February 28, 2012

A bee collects pollen from an almond blossom in early spring at park in Amman, Jordan.

Ali Jarekji/Reuters

A female Lesser Goldfinch feeds on a pollen cone of a conifer in Santa Clara, Calif.

Marcio Jose Sanchez/AP

 

Market Closes for February 28, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	13005.12	+23.61
		+0.18%
S&P 500	1372.18	+4.59
		+0.34%
NASDAQ	2986.76	+20.6
		+0.69%
TSX	12740.47	+40.09
		+0.32%

International Markets

Market Index	Close	Change
NIKKEI	9722.52	+88.59
		+0.92%
HANG SENG	21568.73	+350.87
		+1.65%
SENSEX	17731.12	+285.37
		+1.64%
FTSE 100	5927.91	+12.36
		+0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.975	2.011
CND. 30 Year Bond	2.594	2.625
U.S. 10 Year Bond	1.9324	1.9273
U.S. 30 Year Bond	3.0641	3.0467

Currencies

BOC Close	Today	Previous
Canadian $	0.99563	0.9989
US $	1.00439	1.0001
Euro Rate 1 Euro=		Inverse
Canadian $	1.34008	0.74623
US $	1.34596	0.74296

Commodities

Gold	Close	Previous
London Gold Fix	1786.70	1773.60
Oil	Close	Previous
WTI Crude Future	106.64	107.76

Market Commentary:

Canada

By Lu Wang and Matt Walcoff

Feb. 28 (Bloomberg) — Canadian stocks climbed to a five- month high as better-than-expected U.S. consumer confidence data bolstered the outlook for raw-materials producers and Bank of Montreal’s earnings lifted financial shares.

Goldcorp Inc., the second-largest gold producer by market value, advanced 2.9 percent as the metal climbed for the first time in three days. BMO, Canada’s fourth-largest lender, rose 1 percent after profit beat analysts’ estimates, helped by U.S.

consumer banking following its takeover of a Wisconsin lender.

SNC-Lavalin Group Inc. tumbled 21 percent after saying 2011 profit missed its projection and opening a probe into inaccurate documentation of payments by its construction unit.

The S&P/TSX Composite Index rose 40.09 points, or 0.3 percent, to 12,740.47, the highest close since Aug. 31. The benchmark measure has jumped 14 percent from an October low as reports on U.S. housing and the labor market bolstered optimism about growth in Canada’s biggest trading partner.

“It’s giving people a little bit of confidence that the economy will gradually improve and the recent run over the past four months in the stock market was not a fakeout,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a phone interview. His firm oversees C$1 billion ($1 billion).

“With good earnings, more mergers and acquisitions — because we see a lot of that happening — we expect the market to be higher than where it is now at the end of the year.”

The S&P/TSX Materials Index rose for the first time in three days, climbing 1.4 percent. Goldcorp increased 2.9 percent to C$49.77. Teck Resources Ltd., Canada’s largest base-metals and coal producer, gained 1.3 percent to C$40.86 as copper rose to a two-week high. First Majestic Silver Corp., which mines in Mexico, surged 6.4 percent to C$21.68 as silver rallied the most since Jan. 3.

Confidence among U.S. consumers climbed to a 12-month high in February, signaling household spending will help sustain the expansion, according to the Conference Board’s index.

BMO, the first Canadian bank to report quarterly results, gained 1 percent to C$58.56. The lender reported first-quarter earnings that beat the average analyst estimate in a Bloomberg survey by 4.3 percent, excluding certain items. Royal Bank of Canada, the country’s biggest lender by assets, climbed for a sixth day, increasing 1.1 percent to C$55.62.

SNC-Lavalin plunged 21 percent, the most since at least 1992, to C$38.43. The company said an outside law firm is assisting in the inquiry after C$35 million of fourth-quarter outlays were found to have been tied to “projects to which they did not relate” and had to be logged as expenses.

Thompson Creek Metals Co. tumbled 16 percent, the most since November 2008, to C$7.30. The molybdenum producer said its Mt. Milligan copper and gold project may cost more than it had estimated. Analysts at Credit Suisse Group AG, Deutsche Bank AG and Toronto-Dominion Bank cut their ratings on the stock.

Calfrac Well Services Ltd., an oilfield-services company, surged 9.4 percent, the most since September 2009, to C$30.39 after its fourth-quarter profit, excluding certain items, surpassed all 14 estimates in a Bloomberg survey.

Ritchie Bros. Auctioneers Inc., which calls itself the world’s largest industrial auctioneer, decreased 7 percent to

C$23.79 after reporting fourth-quarter sales that trailed the average analyst estimate in a Bloomberg survey by 5.4 percent.

Petrominerales Ltd., which produces oil and gas in Colombia, had its share-price forecast cut by at least nine analysts, according to data compiled by Bloomberg. The stock dropped 7 percent to C$17.72, extending its slump after falling

20 percent yesterday, when the company reported drilling results that trailed analysts’ estimates.

US

By Rita Nazareth

Feb. 28 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to its first close above 13,000 since 2008, as better-than-estimated consumer confidence data and a drop in oil bolstered optimism in the world’s largest economy.

Apple Inc. added 1.8 percent and its market capitalization approached $500 billion as it is said to unveil a new iPad next month. Micron Technology Inc. jumped 3.7 percent after buying Intel Corp.’s stake in two wafer factories as the companies expand their venture. Intel advanced 1.3 percent. Priceline.com Inc. surged 7 percent to the highest level since 1999 as profit beat estimates. The Bloomberg U.S. Airlines Index rallied 1.7 percent as oil fell the most in more than five weeks.

The Standard & Poor’s 500 Index increased 0.3 percent to

1,372.18 at 4 p.m. New York time, gaining for a fourth day, the longest streak since Jan. 23. The Dow advanced 23.61 points, or

0.2 percent, to 13,005.12. The 30-stock gauge closed above

13,000 after three unsuccessful attempts over the past week.

“13,000 is just a number,” Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania, said in a telephone interview.

“The U.S. economy is in decent shape. The market is not expensive.”

Today’s gain put the Dow on pace for a fifth straight month of gains, the longest rally since April, amid better-than- estimated economic data. Still, the index is 8.9 percent below its all-time high of 14,164.53 in October 2007. The S&P 500 has rallied 4.6 percent in February, poised for a third monthly gain, the longest stretch in a year. The index trades at about

14.1 times reported earnings, compared with the average since

1954 of 16.4 times, according to data compiled by Bloomberg.

Stocks rose as the Conference Board’s index increased to the highest level in a year. The euro strengthened versus the dollar before the European Central Bank provides funds tomorrow to support banks. Earlier today, stocks dropped as orders for U.S. durable goods fell in January by the most in three years.

Separate data showed that home prices in 20 U.S. cities declined more than forecast in December.

“I don’t have rose-colored glasses on, but I think the path of least resistance is up,” Richard Weeks, the Vienna, Virginia-based managing director and partner at HighTower’s VWG Wealth Management, said in a telephone interview. His firm oversees more than $20 billion. “The news is generally good.

Short-term, all signs say that risks have been reduced.”

Seven out of 10 groups in the S&P 500 advanced. Technology shares, which comprise 20 percent of the index, added 0.9 percent as a group.

Apple, the world’s largest technology company, gained 1.8 percent to $535.41. The shares advanced for a fourth straight day to a record. The company will hold a product event on March 7 in San Francisco, where it’s said to be releasing the third generation of its best-selling iPad tablet computer.

“We have something you really have to see. And touch,”

Apple said today in an invitation, which features a picture of an iPad screen. The new device will sport a high-definition display, run a faster processor and work with speedier wireless networks, people familiar with the product said last month.

The Philadelphia Semiconductor Index climbed 1.6 percent as

23 of its 30 stocks increased.

Micron surged 3.7 percent to $8.88. The stock has gained 14 percent over three days. The company will supply Intel products based on a technology called Nand flash memory. The chipmakers will also extend their Nand flash development program, expanding it to include emerging technologies. Intel, the world’s largest chipmaker, added 1.3 percent to $27.24.

Priceline gained 7 percent, the most in the S&P 500, to $632.76. The company has weathered the European debt crisis better than Expedia Inc. and Orbitz Worldwide Inc., and it’s expanding into emerging markets and new businesses.

Ten out of 14 stocks in the Bloomberg U.S. Airlines Index advanced. Crude oil for April delivery fell $2.01 to settle at

$106.55 a barrel on the New York Mercantile Exchange. It was the biggest decline since Jan. 20. US Airways Group Inc. increased

5.9 percent to $7.41. United Continental Holdings Inc. added 2.5 percent to $20.58. Energy shares in the S&P 500 lost 0.2 percent as a group.

Office Depot Inc. increased 19 percent, the most since May 2009, to $3.59. The second-largest U.S. office-supply chain posted earnings excluding some items of 3 cents a share in the fourth quarter. Analysts, on average, expected the company to break even, according to a Bloomberg survey.

Domino’s Pizza Inc. soared 16 percent to $38.82. The pizza- delivery chain announced a debt refinancing that may result in a special dividend.

Apollo Group Inc. fell 16 percent, the most in the S&P 500, to $43.04. The for-profit educator cut its operating profit forecast for 2012 to no more than $725 million, below the previous estimate of as much as $750 million.

Other education shares declined. ITT Educational Services Inc. retreated 5.4 percent to $68.29. DeVry Inc. fell 3.8 percent to $35.41.

The Russell 2000 Index of small companies slid 0.4 percent to 823.80. Sykes Enterprises Inc. dropped 17 percent to $14.28.

The operator of call centers forecast full-year earnings of

$1.20 a share at most, below the average analyst estimate of $1.46.

Warren Buffett’s pursuit of bigger acquisitions makes companies from Stanley Black & Decker Inc. to Parker Hannifin Corp. the most attractive takeover targets, according to data compiled by Bloomberg.

Berkshire Hathaway Inc.’s 81-year-old chairman and chief executive officer said in his annual letter to shareholders on Feb. 25 that he was “on the prowl” for large deals after spending more than $35 billion on companies including Lubrizol Corp. and Burlington Northern Santa Fe in the past two years.

With Berkshire generating $1 billion a month in free cash flow, the world’s most successful investor is eyeing takeovers as near-zero percent interest rates limit returns in fixed- income markets and the Omaha, Nebraska-based company’s cash hoard increased to $37.3 billion.

Stanley Black & Decker, the world’s biggest maker of hand tools, and Parker Hannifin, which controls more than half the market for fluid-powered valves, are among 21 U.S. companies that meet the acquisition criteria in Berkshire’s annual report, data compiled by Bloomberg show.

Stanley Black & Decker and Parker Hannifin “seem very plausible acquisition candidates for Buffett,” said Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group in Bedford Hills, New York. “We would expect him to make a larger deal. He’s a man of his word.”

 

Have a wonderful evening everyone.

 

Be magnificent!

How is this dream to be broken,

how shall we wake up from this dream

that we are little men and women,

and all such things?

-Swami Vivekananda, 1863-1902

As ever,

 

Carolann

Education is not the filling of a

pail, but the lighting of a fire.

-W.B. Yeats, 1865-1939

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

 

Birthday: Henry W. Longfellow, born February 27^th, 1807.  He finished his last poem, The Bells of San Blas, on March 15^th, 1882.  “Out of the shadows of night

The world rolls into light; it is daybreak everywhere.”

I read this poem on the weekend in a recent edition of The New Yorker:

 

MONEY TIME

 

Supposedly, time is money:

money will buy you time

assuming you have money

 

to spend, as well as time

to wait while your money

grows. However, time

 

spent waiting can be like money

misspent – it’s often time

wasted, even if money

 

is made, a kind of time

not worth spending, so money

isn’t necessarily time.

 

Maybe time is money

if you make with your time

something else that makes money,

 

though most of the time

it’s not your money

you’ve made with your time.

 

And money isn’t even money,

necessarily, in a time

like this, when money

 

loses value and time

is misspent losing money.

And time isn’t even time,

 

necessarily, if it’s lost money

on which you’re wasting time,

nor is money really money

 

if it’s wasted on wasted time.

Still, sometimes, time is money,

but only if you have money and time.

 

-Craig Morgan Teicher

photos of the day

February 27, 2012

A timed exposure shows stars in the sky over the Norwegian village Haglebu as a car passes by.

Leonhard Foeger/Reuters

Meryl Streep, who won Best Actress for ‘The Iron Lady,’ and Jean Dujardin, who won Best Actor for ‘The Artist,’ pose with their Oscars during the 84th Academy Awards in Los Angeles.

Joel Ryan/AP

Market Closes for February 27, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	12981.51	-1.44
		-0.01%
S&P 500	1367.59	+1.85
		+0.14%
NASDAQ	2966.16	+2.41
		+0.08%
TSX	12700.38	-25.39
		-0.20%

International Markets

Market Index	Close	Change
NIKKEI	9633.93	-13.45
		-0.14%
HANG SENG	21217.86	-189.00
		-0.88%
SENSEX	17445.75	-477.82
		-2.67%
FTSE 100	5915.55	-19.58
		-0.33%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.011	2.023
CND. 30 Year Bond	2.625	2.636
U.S. 10 Year Bond	1.9273	1.9757
U.S. 30 Year Bond	3.0467	3.0976

Currencies

BOC Close	Today	Previous
Canadian $	0.99911	0.99775
US $	0.7541	1.00226
Euro Rate 1 Euro=		Inverse
Canadian $	1.33800	0.74739
US $	1.33918	0.74672

Commodities

Gold	Close	Previous
London Gold Fix	1773.60	1773.00
Oil	Close	Previous
WTI Crude Future	107.76	109.70

 

Market Commentary:

Canada

By Matt Walcoff

Feb. 27 (Bloomberg) — Canadian stocks fell for a second day as energy companies dropped after the International Monetary Fund said the world economy remains at risk for a slowdown.

Suncor Energy Inc., Canada’s biggest oil and gas producer, decreased 2.2 percent as crude futures retreated for the first time in eight days. Petrominerales Ltd., which produces energy in Colombia, plunged 20 percent after reporting drilling results that Tudor Pickering Holt & Co. called “disappointing.”

Valeant Pharmaceuticals International Inc., Canada’s biggest drugmaker, rose 5.6 percent after reporting profit that surpassed the average analyst estimate in a Bloomberg survey.

The S&P/TSX Composite Index fell 25.39 points, or 0.2 percent, to 12,700.38 after IMF Managing Director Christine Lagarde said the economy is “not out of the danger zone.”

“There is a bit of deja vu,” Ian Nakamoto, director of research at money manager MacDougall MacDougall & MacTier Inc., said in a telephone interview from Toronto. The firm oversees about $4 billion. “We had a very strong market at the beginning of the year last year, and we also had a rise in oil prices. The equity markets fell back. The general sense is that there is going to be a pause. That’s why people are taking money off the table.”

The index rallied 2.2 percent last week as Greek and European officials agreed on a second bailout of the country and oil futures climbed to the highest price since May. Canada’s benchmark stock gauge has advanced 6.2 percent this year after sinking 11 percent in 2011.

Lagarde cited “still fragile financial systems, high public and private debt, and higher world oil prices” as risks to the economy in a statement yesterday.

Oil futures dropped 1.1 percent on the New York Mercantile Exchange after jumping 11 percent in the previous two weeks.

Suncor declined 2.2 percent to C$36.16. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 0.8 percent to C$37.71. Nexen Inc., an oil and gas producer with operations on five continents, slumped 2.9 percent to C$20.56 after John Herrlin, an analyst at Societe Generale SA, said the company is no longer a short-term buy.

Petrominerales tumbled a record 20 percent to C$19.05 after Matthew Portillo, an analyst at Tudor Pickering, cut his rating on the shares to accumulate from buy. Portillo said flow rates at the company’s Tatama-1 well were at most one-third of what he had forecast. An accumulate rating means the shares should be purchased “consistently” at current prices rather than “aggressively” as with a buy rating.

Pan Orient Energy Corp., which operates in Thailand, Indonesia and western Canada, soared 25 percent to C$4.24 after reporting drilling results. The shares have more than doubled this year.

The S&P/TSX Materials Index fell for a second day as the U.S. Dollar Index rebounded after closing at the lowest level since Dec. 1 on Feb. 24.

Iamgold Corp., which mines in West Africa, South America and Quebec, dropped 2.5 percent to C$15.50 after Tony Lesiak, an analyst at Macquarie Group Ltd., cut his rating on the shares to neutral from outperform. A neutral rating means the shares will return within 5 percentage points of their benchmark over the next 12 months. Teck Resources Ltd., Canada’s biggest base- metals and coal producer, declined 0.8 percent to C$40.34.

Guyana Goldfields Inc., which explores for gold in South America, sank 13 percent to C$5.87, the lowest since November 2009, after analysts at Royal Bank, Bank of Montreal and Cormark Securities Inc. cut their ratings on the company. The shares plunged 20 percent Feb. 24 after the feasibility study for its Aurora project was “not as robust as previous guidance had suggested,” Brad Humphrey, an analyst at Raymond James Financial Inc., said in a note to clients.

Trelawney Mining & Exploration Inc., a gold explorer with operations in Ontario, slumped 16 percent, the most since September 2009, to C$2.49. The company released a new resource estimate for its Cote Lake deposit that had a lower average grade than its previous report. Jeff Killeen, an analyst at Canadian Imperial Bank of Commerce, reduced his 12- to 18-month share-price forecast to C$4.25 from C$6.50.

Batero Gold Corp., which explores in Colombia, plunged 49 percent, the most since it began trading three years ago, to C$1.30. The initial resource estimate for the Batero-Quinchia project was lower than Jeff Wright, an analyst at Global Hunter Securities LLC, had forecast, Wright said in a telephone interview.

Valeant gained 5.6 percent to C$50.71 after its fourth- quarter earnings beat the average analyst estimate in a Bloomberg survey by 7.8 percent, excluding certain items. The shares have surged 10 percent in the last four days.

Money manager Fiera Sceptre Inc. soared 18 percent, the most since June 2010, to C$8.50 after agreeing to buy National Bank of Canada’s asset-management unit for C$309.5 million ($308.4 million).

US

By Rita Nazareth

Feb. 27 (Bloomberg) — The Standard & Poor’s 500 Index rose to an almost four-year high, rebounding from earlier losses, on better-than-estimated housing data as financial shares rallied.

A measure of banks advanced the most in the S&P 500 among 24 industries, rallying 1.9 percent. JPMorgan Chase & Co. climbed 2 percent after CLSA Ltd. analyst Mike Mayo said it should consider breaking up and selling businesses. Lennar Corp. and D.R. Horton Inc. rallied more than 1.8 percent to pace gains in homebuilders. Micron Technology Inc., the largest U.S. maker of computer-memory chips, surged 7.7 percent after Japan-based rival Elpida Memory Inc. filed for bankruptcy.

The S&P 500 gained 0.1 percent to 1,367.59 at 4 p.m. New York time, erasing a drop of 0.8 percent. The Dow Jones Industrial Average lost 1.44 points, or less than 0.1 percent, to 12,981.51. The gauge turned lower at the close of trading after failing to hold above 13,000 for the third session in the past week. The Dow last closed above that level in May 2008.

“The market has been very discomforting for the bears,” Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “The economy is healing. That’s causing the market to have some resilience.”

The S&P 500 is on pace for a third month of gains, the longest streak in a year, amid better-than-estimated economic and corporate reports. It has risen 4.2 percent this month. The index trades at about 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.

Stocks rose today as more Americans than forecast signed contracts to buy previously owned homes in January, indicating the industry that sparked the last recession is improving.

Benchmark gauges rebounded from earlier losses, which were triggered by concern about Europe’s debt crisis after the Group of 20 nations rebuffed euro area call for help.

“We’re nowhere near the bottom of the European debt crisis,” Keith Wirtz, who oversees $14.6 billion as chief investment officer for Fifth Third Asset Management in Cincinnati, said in a telephone interview. “I keep hoping that the European influence will ebb. The problem is still there. We’ll need to get used to volatility.”

Six out of 10 groups in the S&P 500 rose today as financial, consumer discretionary and technology companies had the biggest gains. The Morgan Stanley Cyclical Index of companies most-dependent on the economy added 0.6 percent.

The KBW Bank Index rallied 1.3 percent as 22 of its 24 stocks advanced.

JPMorgan Chase jumped 2 percent, the most in the Dow, to $39.06. Its parts are worth one-third more than its market value, according to CLSA’s Mayo. While JPMorgan’s stock has outperformed its peers, the New York-based company has trailed the leading firms in its individual businesses, Mayo wrote in a note e-mailed today.

“At what point does the conglomerate discount become so great that it encourages the company to take action?” Mayo wrote. “The stock seems undervalued, but the question is how and when this value gets realized?”

Bank of America Corp. climbed 2 percent to $8.04. The lender and a group of investors that reached an $8.5 billion mortgage-bond settlement with the bank won their bid to remove the case from a federal judge and return it to state court. The U.S. Court of Appeals in Manhattan overturned a lower court ruling and granted a request by Bank of America and the investor group to remand the case to New York state court, where it was first filed, according to a decision today.

A measure of homebuilders in S&P indexes rallied 1.5 percent. Lennar added 2.5 percent to $22.94. D.R. Horton gained 1.9 percent to $14.24.

Lowe’s Cos. rose 0.7 percent to $27.34. The second-largest U.S. home-improvement retailer reported fourth-quarter profit that exceeded analysts’ estimates after warmer weather encouraged outdoor projects.

Whirlpool Corp. advanced 6.7 percent to $76.10. The world’s largest appliance maker will beat analysts’ estimates for 2012 earnings as profit recovers, Cleveland Research said in a note after meeting with the management.

Micron surged 7.7 percent to $8.56. Elpida, the last Japanese maker of dynamic random access memory, or DRAM, chips filed for bankruptcy after semiconductor prices plunged and it failed to win a second government bailout. While there’s too much capacity in the DRAM market, Micron could acquire some of Elpida’s facilities and convert them to produce Nand flash, the chips used in mobile phones and tablets, Kevin Cassidy, a Stifel Nicolaus & Co. analyst, said.

Walt Disney Co. added 0.8 percent to $41.64. The largest U.S. entertainment company by market value was raised to “conviction buy” from “neutral” at Goldman Sachs Group Inc., which expects accelerating ad growth at ESPN.

Dendreon Corp. tumbled 21 percent, the most since Nov. 3, to $11.81. The maker of the prostate-cancer drug Provenge reported earnings that missed analyst estimates.

A gauge of U.S. equity volatility is likely to be “contained” below its historical average for the next four months, according to MKM Partners LLC, reducing the potential yields that structured product issuers can offer.

The VIX, as the Chicago Board Options Exchange Volatility Index is known, will generally hold between 15 to 20 until mid- June, said Jim Strugger, a derivatives strategist for MKM in Stamford, Connecticut. The VIX measures the cost of using options as protection from losses in the S&P 500.

“We believe the volatility cycle is close to shifting into its sweet spot that will last a couple of months and be characterized by a steady move higher for U.S. equities,” Strugger said in a note today to clients. He based his estimate of the “sweet spot,” which represents a cyclical low in the level of volatility, on historical data from periods that had comparable price swings.

Have a wonderful evening everyone.

 

Be magnificent!

You must learn how to be lucid in all your actions;

that is, you must not only be aware of the time, the place, and the circumstances,

in which the action takes place, but also of yourself, the player, of your body

and what is happening at any moment.

It is not only a question of seeing things as they are, but of seeing yourself at the same time,

and the reactions that take place within you.

In other words, you absorb the whole thing within you and you become complete.

-Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

The best time to make friends is

before you need them.

-Ethel Barrymore, 1879-1959

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

 

Tangents:

 

Beauty and the Traffic

Photographer Rob Whitworth’s time-lapse video of Ho  Chi Minh City not only provides beautiful views of the Vietnamese metropolis but also reveals the sheer volume of traffic that crisscrosses the city by road and boat each day.  Try to stop your heart from leaping into your mouth when some of those Vespa and motorcycle riders weave through the city center.  Watch it at: http://vimeo.com/32958521

Academy Awards this Sunday!

 

photos of the day

February 24, 2012

A farmer dries cassava while harvesting on a field in Hoa Binh province, outside Hanoi.

Kham/Reuters

A man dressed as the character Spock from the Star Trek TV series and movies waits for tips outside the site of the 84th Academy Awards in Hollywood, California.

Rick Wilking/Reuters

Market Closes for February 24, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	12982.95	-1.74
		-0.01%
S&P 500	1365.74	+2.28
		+0.17%
NASDAQ	2963.75	+6.77
		+0.23%
TSX	12725.77	-5.51
		-0.04%

International Markets

Market Index	Close	Change
NIKKEI	9647.38	+51.81
		+0.54%
HANG SENG	21406.86	+25.87
		+0.12%
SENSEX	17923.57	-154.93
		-0.86%
FTSE 100	5935.13	-2.76
		+0.05%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.023	2.050
CND. 30 Year Bond	2.636	2.643
U.S. 10 Year Bond	1.9757	1.9930
U.S. 30 Year Bond	3.0976	3.1330

Currencies

BOC Close	Today	Previous
Canadian $	0.99775	0.99711
US $	1.00226	1.00290
Euro Rate 1 Euro=		Inverse
Canadian $	1.34323	0.74447
US $	1.34626	0.74280

Commodities

Gold	Close	Previous
London Gold Fix	1773.00	1784.90
Oil	Close	Previous
WTI Crude Future	109.70	108.63

Market Commentary:

Canada

By Katia Porzecanski and Andrew Theen

Feb. 24 (Bloomberg) — Canadian stocks fell, paring a second weekly gain, as declines by gold companies offset a rally in energy shares after U.S. consumer sentiment and home sales reports bolstered confidence in the global economy.

Goldcorp Inc., the world’s second-biggest producer of the metal, fell 1.4 percent as demand for a haven eased and gold declined. Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.6 percent as crude rose for a seventh day.

Magna International Inc., North America’s largest auto-parts supplier, rallied 5.4 percent after it said fourth-quarter earnings jumped 42 percent.

The S&P/TSX Composite Index slipped 5.51 points, or less than 0.1 percent, to 12,725.77 in Toronto, paring its weekly rally to 2.2 percent.

“Previously there was a concern about a double dip” in the economy, Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($1 billion).

“We’ve had good earnings, a lot of good guidance, and we’ve had some economic numbers over the last several months that are showing that seems like it’s no longer the case.”

Canadian materials and energy companies advanced earlier this week as commodities gained after euro-area finance ministers approved 130 billion euros ($175 billion) in aid for Greece. The index has advanced eight of the past nine weeks as improving economic data from the U.S. overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

Financial shares gained as purchases of new homes in the U.S. exceeded economists’ forecasts in January and a gauge of consumer confidence topped estimates. Finance ministers and central bank governors from the Group of 20 nations meet tomorrow in Mexico and may discuss committing fresh cash to the International Monetary Fund to defuse the European fiscal crisis.

Toronto-Dominion Bank, Canada’s second-largest lender, gained 0.4 percent to C$79.30. Brookfield Asset Management Inc., the country’s largest real-estate company, gained 1.6 percent to C$31.51.

The S&P/TSX Gold Index fell for the first time this week the metal retreated after its three-day rally. Goldcorp fell 1.4 percent to C$48.64.

“The price of gold has really been a steady riser, and we just haven’t seen much of that carry through in the valuations of gold shares,” Radman said.

Iamgold Corp., which mines in West Africa, South America and Quebec, fell 9.1 percent to C$15.90 after reporting fourth- quarter earnings that missed analysts’ estimates.

Oil climbed for a seventh day, the longest streak of advances since January 2010, as sanctions against Iran made it more difficult for the Persian Gulf nation to sell crude.

Suncor Energy, the country’s largest oil and gas producer, increased 1.6 percent to C$36.97.

Nexen Inc. rose 1.5 percent to C$21.18. The oil and gas producer with operations on five continents said it has begun producing oil from its Usan field off the coast of West Africa.

Enerplus Corp., an oil and gas producer with operations in Canada and the U.S., lost 2.4 percent to C$24.01 after it reported a fourth-quarter loss.

Laramide Resources Ltd., a Canadian uranium-mining company, rose 18 percent to C$1.14 on speculation an election next month in Australia’s Queensland state will lead to the end of a ban on extracting the mineral.

Magna International rallied 5.4 percent to C$47.36 after it said fourth-quarter earnings jumped 42 percent on increased production of cars and light trucks in North America.

US

By Rita Nazareth

Feb. 24 (Bloomberg) — The Standard & Poor’s 500 Index advanced to the highest level since 2008 amid better-than- estimated consumer sentiment and home sales reports.

Salesforce.com Inc., the largest seller of online customer- management software, climbed 9 percent as billings growth beat analysts’ forecasts. American International Group Inc. added 1.5 percent after profit jumped 77 percent. Bank of America Corp.

and Morgan Stanley dropped at least 1.7 percent. FedEx Corp.

retreated 1.9 percent, pacing losses in transportation shares, as oil capped its longest increase since January 2010.

The S&P 500 rose 0.2 percent to 1,365.74 at 4 p.m. New York time, paring a gain of as much as 0.4 percent. The Dow Jones Industrial Average decreased 1.74 points, or less than 0.1 percent, to 12,982.95, after rising above 13,000 earlier today.

“We like U.S. equities,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages about $665 billion. “That’s a more defensive way to participate in the global economic recovery. Yet the Dow is flirting with 13,000. While it makes no difference from a valuation standpoint, it can cause some people to say: we’ve had a pretty a big run and I’ll take a bit off the table. From a valuation standpoint, the stock market is still attractive.”

The S&P 500 gained as data showed that purchases of new homes in the U.S. exceeded forecasts in January after climbing a month earlier to a one-year high. The Thomson Reuters/University of Michigan final index of consumer sentiment for February rose to 75.3. Economists projected a reading of 73.

Before today, the S&P 500 twice this week advanced above its highest close since 2008, only to retreat by the end of the trading day. The Dow traded near 13,000 during the week, failing to close above that level. The 30-stock gauge hasn’t closed above 13,000 since May 2008.

Better-than-estimated economic and earnings data put the S&P 500 on pace for a third month of gains, the longest streak in a year. The index rose 4.1 percent in February. Earnings topped analysts’ estimates at 68 percent of the 441 companies in the index that released results since Jan. 9. The S&P 500 trades at 14 times reported earnings, compared with the average since

1954 of 16.4 times, according to data compiled by Bloomberg.

Technology shares, which comprise 20 percent of the S&P 500, had the biggest gain among 10 industries.

Salesforce.com surged 9 percent to $143.64. The amount Salesforce invoiced its customers grew 57 percent in the fourth quarter from a year earlier, topping the 31 percent predicted by Brent Thill, an analyst at UBS AG in San Francisco. Billings rose 29 percent in the third quarter.

AIG gained 1.5 percent to $28.41. The insurer cited a return to “sustainable operating profit” as it booked a tax benefit that fueled record fourth-quarter earnings. AIG is projecting that it will generate enough profit to use tax assets, tied to prior losses, that can limit future payments to the government.

Sears Holdings Corp. jumped 11 percent, the most in the S&P 500, to $68.31. The shares surged 34 percent in three days. The company yesterday announced plans to raise as much as $770 million by selling 11 store sites and separating some smaller- format businesses.

Interpublic Group of Cos. rose 6.5 percent to $11.62. The New York-based advertising company announced a $300 million share buyback program.

A gauge of banks had the biggest decline in the S&P 500 among 24 industries, slumping 1.2 percent. Regions Financial Corp. lost 1.9 percent to $5.80. Bank of America had the largest drop in the Dow, falling 1.8 percent to $7.88. Morgan Stanley dropped 2.5 percent to $18.49.

The Dow Jones Transportation Average, a proxy for economic growth, slid 0.4 percent, reversing an earlier gain of 0.8 percent. FedEx lost 1.9 percent to $90.24.

Gap Inc. retreated 4 percent to $22.57. The largest U.S.

apparel chain forecast profit this year that was less than some analysts estimated as sales declined at its Old Navy stores.

Sprint Nextel Corp. dropped 2 percent to $2.47. Comcast Corp., the largest U.S. cable company, sued a unit of Sprint alleging infringement of four telecommunications patents.

Stocks are in the midst of a “hope phase” that may be as short-lived as one that occurred a year earlier, according to Albert Edwards, a global strategist at Societe Generale SA.

He compares the S&P 500’s performance since October with its year-ago swings. Last year, the index dropped during the second half of February, rebounded to reach its 2011 high in April, and tumbled in a second-half bout of volatility.

This year’s gains reflect anticipation of sustained U.S.

economic growth and a so-called soft landing for the Chinese economy, according to Edwards, based in London. He also cited optimism that Greece’s second bailout and the European Central Bank’s moves to ease bank financing will help the euro region.

“Hope still beats in the breast of equity investors,” he wrote. “The market will rip out that hope and consume it in front of investors’ eyes.”

Corporate earnings may be a catalyst for the abandonment of hope, the report said. Edwards noted that estimates for S&P 500 companies as a group are dropping for the first time since late 2007, when the U.S. economy was sliding into a recession.

Edwards reiterated in September that the index will fall to 400, a plunge of about 70 percent from yesterday’s close, before the next bull market begins. He saw the yield on 10-year Treasury notes falling to 1.5 percent. Last year’s low was 1.67 percent.

 

Have a wonderful weekend everyone.

 

Be magnificent!

The craving for position, for prestige, for power, to be recognized by society

as being outstanding in some way, is a wish to dominate others, and this wish to dominate

is a form of aggression.  And what is the reason for this aggressiveness?  It is fear isn’t it?

-Krishnamurti, 1895-1986

As ever,

 

Carolann

Write the bad things that are done to you in sand, but write

the good things that happen to you on a piece of marble.

-Arabic Parable

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

Iwo Jima Day, February 23rs, 1945.

Raising the Flag on Iwo Jima, by Joe Rosenthal/ The associated Press.

Raising the Flag on Iwo Jima is a historic photograph  taken on February 23, 1945, by Joe Rosenthal.  It depicts five United States Marines and a U.S. Navy corpsman raising the flag of  the United States atop Mount Suribachi during the Battle of Iwo Jima in World War II.

The photograph was extremely popular, being reprinted in thousands of publications. Later, it became the only photograph to win the Pulitzer Prize for Photography in the same year as its publication, and came to be regarded in the United States as one of the most significant and recognizable images of the war, and possibly the most reproduced photograph of all time. Of the six men depicted in the picture, three (Franklin Sousley, Harlon Block, and Michael Strank) were killed during the battle; the three survivors (John Bradley, Rene Gagnon, and Ira Hayes) became celebrities upon their identification in the photo. The picture was later used by Felix de Weldon to sculpt the Marine Corps War Memorial, located adjacent to Arlington NationalCemetery just outside Washington, D.C.  –from Wikipedia, the free encyclopedia.

photos of the day

February 23, 2012

The ‘Golden Victoria’ sculpture from the top of Siegessaeule, the Victory column in Berlin is silhouetted against a cloudy sky.

Tobias Schwarz/Reuters

Children cross the Batllava Lake to go to school in Kosovo’s village of Orllan. Students at Orllan are starting their first few days of school after two weeks of disruption due to bad weather. They have to cross the frozen artificial lake of Batllava, which supplies water to the capital Pristina, to reach their school on the other side.

Hazir Reka/Reuters

 

Market Closes for February 23, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	12984.69	+46.02
		+0.36
S&P 500	1363.46	+5.80
		+0.43
NASDAQ	2956.98	+23.81
		+0.81%
TSX	12731.28	+30.02
		+0.24%

International Markets

Market Index	Close	Change
NIKKEI	9595.57	+41.57
		+0.4%
HANG SENG	21380.99	-168.29
		-0.78%
SENSEX	18078.50	-66.75
		-0.37%
FTSE 100	5937.89	+22.34
		+0.36%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.050	2.052
CND. 30 Year Bond	2.643	2.636
U.S. 10 Year Bond	1.9930	2.0017
U.S. 30 Year Bond	3.1330	3.1379

Currencies

BOC Close	Today	Previous
Canadian $	0.99711	0.99980
US $	1.00290	1.00020
Euro Rate 1 Euro=		Inverse
Canadian $	0.74987	1.33356
US $	0.74770	1.33743

Commodities

Gold	Close	Previous
London Gold Fix	1784.90	1770.00
Oil	Close	Previous
WTI Crude Future	108.63	106.01

Market Commentary:

Canada

By Andrew Theen and Katia Porzecanski

Feb. 23 (Bloomberg) — Canadian stocks rose, extending a five-month high, as bullion producers rallied after Yamana Gold Inc.’s earnings beat forecasts and the metal’s futures climbed.

Yamana, the country’s fourth-largest gold producer by market value, advanced 3.1 percent after the metal rose to a three-month high and executives from Barrick Gold Corp. and Goldcorp Inc. said mining shares are cheap relative to earnings.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer, slipped 1.5 percent as wheat declined in Chicago.

The Standard & Poor’s/TSX Composite Index rose 30.02 points, or 0.2 percent, to 12,731.28 in Toronto, the highest since Aug. 31.

“Good times are here again in terms of commodity prices,” Barry Schwartz, portfolio manager with Baskin Financial Services Inc. in Toronto, said in a phone interview. The firm oversees about C$450 million ($451 million). The gains in the stock market have been muted, he said, because investors are still wary after 2008, when they were “sliced and diced” by holding onto commodity stocks.

The index has rallied 2.2 percent this week after Greece won a second bailout, and has gained eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Materials, oil and gas make up 47 percent of the Canadian market.  Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

Gold rose 0.8 percent to settle at $1,786.30 an ounce. Oil rose 1.5 percent to $107.83, the highest settlement since May.

Canadian commodity stocks don’t fully reflect the gains in the underlying commodities, Schwartz said.

“The stocks are reacting to this as if gold is still at $1,600 and oil is at $90 a barrel,” Schwartz said. “Someone sent the memo but Canadian investors didn’t get it.”

A gauge of materials companies advanced, with 50 of the 74 companies posting gains. Gold rose to a three-month high in New York after the dollar fell against a basket of currencies as a report showed German business confidence rose to the highest level in seven months in February.

Executives of the world’s two largest producers of the metal, Goldcorp and Barrick, said producers of metal are poised to outperform bullion after gold-mining shares fell to their cheapest in at least a decade. Barrick slipped 0.2 percent to C$49.40, while Goldcorp added 0.3 percent to C$49.35.

Great Basin Gold Ltd. gained 5.6 percent to 94 Canadian cents. Yamana Gold rose 3.1 percent to C$17.90. Yamana’s fourth- quarter profit beat the average analyst estimate by 5.9 percent.

An index of energy shares in the S&P/TSX rose for a third day.

Pacific Rubiales Energy Corp. rose 7.8 percent to C$29.44. The Toronto-based oil producer that operates fields in Colombia surged to a six-month high after its 2011 oil and natural-gas reserves gained 52 percent from the year before.

Loblaw Cos., the country’s biggest grocer, led losses among consumer staple companies and fell 5.7 percent to C$35.25 after it forecast profit this year will be down from 2011 due to higher costs for technology.

Potash Corp. fell 1.5 percent to C$46.65 as wheat declined on speculation that rising global inventories will cut demand for grain from the U.S. The stock was cut to underperform from sector perform by National Bank Financial Inc., meaning it is expected to perform worse than competitors.

US

By Rita Nazareth

Feb. 23 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to the highest level since May 2008, amid better-than-estimated housing and jobs market reports.

International Business Machines Corp., which comprises 12 percent of the share-price weighted Dow, added 28 points to the index. Procter & Gamble Co. rose 3.1 percent as the largest consumer-products company said it will cut 5,700 jobs.

PulteGroup Inc. and KB Home advanced at least 4.3 percent to pace gains in homebuilders. Sears Holdings Corp. soared 19 percent as it plans to raise as much as $770 million by selling11 store sites and separating some smaller-format businesses.

The Standard & Poor’s 500 Index increased 0.4 percent to 1,363.46 at 4 p.m. in New York, erasing earlier losses. The benchmark gauge briefly rose above its April 2011 peak of 1,363.61, which was the highest level since June 2008. The Dow gained 46.02 points, or 0.4 percent, to 12,984.69. The Russell 2000 Index of small companies rallied 1.6 percent to 829.23.

“The recovery is starting to pick up speed,” Tom Wirth, who helps manage $1.5 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said in a phone interview. “There was so much fear about what was happening in Europe that people couldn’t see through all of that.”

Stocks gained as applications for jobless benefits were unchanged in the week ended Feb. 18 at 351,000, the fewest since March 2008. A report from the Federal Housing Finance Agency showed that a gauge of home prices jumped 0.7 percent in December, beating estimates. The euro rose to the strongest level in more than 10 weeks against the dollar as a report showed German business confidence climbed.

Today’s advance extended the S&P 500’s rally in February to 3.9 percent. The index was poised for a third straight month of gains, the longest streak in a year, on higher-than-estimated economic data. Still, it was the second time this week that the S&P 500 failed to hold above its highest close since 2008.

“Sometimes when you’re knocking on the door of a meaningful psychological level you have to knock hard a few times to gain admittance,” David Sowerby, a Bloomfield Hills, Michigan-based portfolio manager at Loomis Sayles & Co., which oversees more than $155 billion, said in a phone interview.

“Valuation is compelling. There’s been improvement in the economy. That provides potential for stocks to move higher.”

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, tumbled 7.6 percent to 16.80, the lowest since July. The Dow Jones Transportation Average added 0.7 percent, following a three-day slump. Nineteen out of 30 stocks in the Dow advanced. IBM jumped 1.9 percent, the second-biggest gain in the Dow, to $197.61.

Procter & Gamble rallied the most in the Dow, rising 3.1 percent to $66.42. The cuts include 1,600 announced in January and will be achieved through attrition and layoffs, Paul Fox, a spokesman, said in an e-mail. The reductions are part of a plan to achieve $10 billion in cost savings by 2016, as detailed today by Chief Executive Officer Bob McDonald and Chief Financial Officer Jon Moeller at a conference in Florida.

A gauge of homebuilders in S&P indexes climbed 2.3 percent.

KB Home added 4.4 percent to $11.75. PulteGroup advanced 4.8 percent to $8.73.

Sears surged 19 percent, the most in the S&P 500, to $61.80. The rights offering to separate the Hometown and Outlet shops and some hardware stores may raise $400 million to $500 million, Hoffman Estates, Illinois-based Sears said today in a statement. The 11 sites will be sold to General Growth Properties for about $270 million, the retailer said.

Vivus Inc. soared 78 percent to $18.73 after the company’s pill Qnexa won the backing of a regulatory panel, moving the drug a step closer to gaining U.S. approval as the first new obesity treatment in 13 years.

Target Corp. jumped 2.9 percent to $54.50. The second- largest U.S. discount retailer posted fourth-quarter earnings that exceeded some analysts’ estimates, helped by discount card initiatives and grocery sales.

MetroPCS Communications Inc. rallied 14 percent to $11.70.

The pay-as-you-go U.S. wireless carrier reported fourth-quarter profit that beat analysts’ estimates.

Apple Inc. rose 0.7 percent to a record $516.39. Chief Executive Officer Tim Cook, speaking today at an annual investor meeting, said Apple was continuing “active discussions” about what to do with its $97.6 billion in cash and investments, saying the cash hoard was “more than we need to run a company.”

Hewlett-Packard Co. dropped the most in the Dow, slumping 6.5 percent to $27.05. The U.S. computer manufacturer’s fiscal second-quarter profit forecast fell short of analysts’ estimates as consumers curtailed personal-computer purchases.

Solar shares fell after Germany, the world’s biggest market for solar power, plans record reductions in subsidies for the industry as part of a program to rein in a boom in installations. First Solar Inc. declined 8 percent to $37.20.

Trina Solar Ltd. tumbled 12 percent to $8.63.

Safeway Inc. declined 7.6 percent to $20.95. The grocer’s fourth-quarter sales excluding fuel at stores open at least one year increased 1.5 percent, trailing the average 2 percent gain expected by analysts.

The rally in U.S. stocks has pushed a trend measure of the S&P 500 to an “extreme” level not seen since 2004, a sign that the advance may be stalling, according to Sundial Capital Research Inc.

The benchmark gauge’s Average Directional Index, which measures the strength of a trend, climbed to 40.7 yesterday. The last time the indicator was higher following an advance, in November 2004, the S&P 500 was stuck in a 93-point range over the next eight months, according to data compiled by Bloomberg.

The trend is “extended,” Jason Goepfert, president of Sundial in Blaine, Minnesota, wrote in a note yesterday.

“Almost every time, by the time the trend becomes this strong, it’s about to become significantly less so.”

 

Have a wonderful evening everyone.

 

Be magnificent!

Freedom is a state of mind – not freedom from something.

-Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Man is not made for defeat.

-Ernest Hemingway, 1899-1961

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

 

Tangents:

Someone suggested I listen to guitarist Tommy Emmanuel on youtube…it was a revelation.  I had never heard of him before – an excellent guitarist; check it out for yourself.

Speaking of guitarists, I read recently that if you ever wished you could have a guitar lesson with James Taylor, all you have to do is visit jamestaylor.com and you can discover how to do so.  He breaks down his unique guitar technique in slow motion, so that even if you aren’t a player, it’s neat to see.  Also on the site are vintage and modern videos of performances and rehearsals throughout his illustrious career.

Also worth noting in the world of music, to mark composer Philip Glass’s 75^th birthday, Sony Classical is releasing a three-disc set – The Essential Philip Glass – which includes highlights from his classical career (“Einstein on the Beach,” “Satyagraha,” and “Akhnaten”), dance scores for Twyla Tharp (“In the Upper Room”) and Jerome Robbins (“Songs From Liquid Days”), theater works (“The Photographer”), plus music for solo piano and collaborations with artists such as Suzanne Vega, Linda Ronstadt, the Kronos Quartet, and Yo-Yo Ma.

 

photos of the day

February 22, 2012

A copy painting of the ‘Mona Lisa’ is seen through the viewfinder of a video camera on display in Spain’s Prado Museum in Madrid on Tuesday, Feb. 21. The ‘Mona Lisa’ copy was painted by one of Leonardo da Vinci’s apprentices alongside the master himself as he did the original, museum officials said.

Paul White/AP

Ethnic Tibetan women pray around the Labrang Monastery ahead of the Tibetan New Year which starts on Wednesday in Xiahe county, Gansu Province. A teenage Tibetan Buddhist monk has set himself on fire and died in southwestern China, a rights group said, in the latest reported self-immolation by a monk denouncing Chinese policies in Tibet and demanding the return of the Dalai Lama. Tibetan new year begins on February 22, 2012.

Market Closes for February 22, 2012:

North American Markets

Market Index	Close	Change
Dow Jones	12938.67	-27.02   -.21%
S&P 500	1357.66	-4.55   0.33%
NASDAQ	2933.17	-15.40   -0.52%
TSX	12701.26	+77.90   +0.62

International Markets

Market Index	Close	Change
NIKKEI	9554.00	+90.98   +0.96%
HANG SENG	21549.28	+70.56   +0.33%
SENSEX	18145.25	-283.36   -1.54%
FTSE 100	5916.55	-11.65   -0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.052	2.093
CND. 30 Year Bond	2.636	2.669
U.S.      10 Year Bond	2.0017	2.0591
U.S. 30 Year Bond	3.1379	3.2073

Currencies

BOC Close	Today	Previous
Canadian $	0.99980	0.99699
US $	1.00020	1.00302
Euro Rate 1 Euro=		Inverse
Canadian $	0.75506	1.32440
US $	0.75490	1.32467

Commodities

Gold	Close	Previous
London Gold Fix	1770.00	1759.50
Oil	Close	Previous
WTI Crude Future	106.01	105.50

Market Commentary:

Canada

By Katia Porzecanski and Andrew Theen

Feb. 22 (Bloomberg) — Canadian stocks rose, extending a five-month high, as energy shares gained with oil prices on concern Iran will curb supply and gold producers rallied with the metal.

Suncor Energy Inc., the country’s largest oil and gas producer, increased 1.9 percent. Barrick Gold Corp., the world’s largest producer of the precious metal, gained 1.6 percent. Teck Resources Ltd., Canada’s largest copper and coal producer, advanced 2.9 percent. Manulife Financial Corp. the country’s biggest insurer, declined 1.7 percent.

The S&P/TSX Composite Index rose 61.68 points, or 0.5 percent, to 12,685.04 at 1:57 p.m. Toronto time.

“On balance, things are slowly but surely improving,”

Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview. His firm oversees C$1 billion. “There are a lot of investors who are chomping at the bit wanting to get invested. They’ll buy on weakness; they’ll stick their toe in the water and the market will saw-tooth its way upwards.”

The index rallied 1.3 percent yesterday after European finance ministers approved 130 billion ($172 billion) in aid for Greece. Canadian stocks have gained eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Energy and raw material producers account for 48 percent of Canadian stocks by market value, according to Bloomberg data.

The S&P/TSX Energy Index gained 0.6 percent as oil extended a nine-month high after United Nations inspectors in Iran said they were denied access to a suspected nuclear-related military base.

Suncor Energy increased 1.9 percent to C$35.40, while oilfield-services company Calfrac Well Services Ltd. rose 3.4 percent to C$28.13. Nexen Inc., an oil and gas producer with operations on five continents, gained 0.8 percent to C$20.67.

Materials companies rallied as gold and copper prices erased earlier declines.

The S&P/TSX Gold Index rose for a second day. Barrick jumped 1.6 percent to C$49.02. Nevsun Resources Ltd., which mines gold in the African country of Eritrea, advanced 7.5 percent to C$4.29.

Lake Shore Gold Corp., which mines in Ontario, surged 12 percent to C$1.69 after the company said new resources at its Gold River Trend are almost triple a previous estimate.

Teck Resources, Canada’s largest base-metals and coal producer, advanced 2.9 percent to C$40.59. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, gained 0.5 percent to C$23.17.

Money may flow from commodities into individual oil securities or gold securities “because a lot of the actual common shares have been lagging the bullion price and the oil price,”  Michael said.

Rogers Communications Inc. gained 1.2 percent to C$38.24 after reporting fourth-quarter earnings rose 8.3 percent, helped by increasing wireless revenue as customers spent more time on their smartphones.

Aircraft maker Bombardier Inc. advanced 0.9 percent to C$4.71. The company’s business-jet deliveries climbed 21 percent last year, outperforming a global industry in which total shipments declined, a U.S. trade group said.

Financial shares fell after U.S. purchases of previously owned homes climbed less than forecast and reports signaled declines in European and Chinese manufacturing.

Manulife fell 1.7 percent to C$12.50. Brookfield Asset Management Inc., the country’s largest real-estate company, fell

2.1 percent to C$31.11. Sun Life Financial Inc., Canada’s third largest insurer, declined 1.8 percent to C$21.09.

US

By Rita Nazareth

Feb. 22 (Bloomberg) — U.S. stocks fell, a day after the Standard & Poor’s 500 Index failed to hold at an almost four- year high, as sales of previously owned houses missed estimates and data from Europe and China spurred economic concern.

The S&P 500 slid 0.3 percent to 1,357.61 at 4 p.m. New York time, according to preliminary closing data.

“You can ride this, but you’ve got to be very careful and sit near the exit,” David Darst, the New York-based chief investment strategist at Morgan Stanley Smith Barney, said in a phone interview. His firm has $1.6 trillion in client assets.

“Most of the economies are slowing. Earnings will be slowing.

The market is overbought.”

Stocks fell today as purchases of previously owned homes rose to a 4.57 million annual rate, less than forecast, data from National Association of Realtors showed. China’s manufacturing may shrink for a fourth month, according to data from HSBC Holdings Plc and Markit. European services and manufacturing output unexpectedly shrank. Fitch Ratings lowered Greece’s credit rating and said a default is highly likely.

Today’s loss trimmed the S&P 500’s gain in February to 3.4 percent. Still, the index was poised for a third straight month of gains, the longest streak in a year, on higher-than-estimated economic data and expectations Europe would tame its crisis. The S&P 500 yesterday failed to hold above its April 2011 peak of 1,363.61, which was the highest level since June 2008.

“We have a trifecta of worrisome news,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion, said in a telephone interview. “The softness in economic data suggests that global momentum remains muted. We have slower earnings growth and the market is facing some technical resistance.”

Earnings at S&P 500 companies will grow 7.4 percent this year, according to the average analyst estimate in a Bloomberg survey, following a 15 percent increase in 2011.

A two-week retreat in the Dow Jones Transportation Average may signal a warning for the rally that has added $1.35 trillion to American equity values this year, according to analysts who use charts to predict markets.

The gauge has fallen 3.8 percent since Feb. 3, a period in which the Dow Jones Industrial Average climbed 0.8 percent and reached the highest level since May 2008. The transportation average is viewed by some analysts as a leading indicator because truckers, airlines and couriers may be the first to experience the effects of an economic slowdown.

“This market does seem to be overdue for a pullback,”

Chuck Carlson, chief executive officer at Horizon Investment Services LLC in Hammond, Indiana, said in a phone interview.

Horizon oversees $150 million and uses the relationship between the industrial and transportation gauges to determine how much cash to hold. A divergence “doesn’t always necessarily signal a change in the major trend, but it can foreshadow a bit of a correction,” he said.

Futures traders are pricing in the biggest increase in U.S.

equity hedging costs since 2010 after the S&P 500 rose within 2 points of erasing last year’s slump.

April futures on the Chicago Board Options Exchange Volatility Index closed at 25.15 yesterday, or 6.96 points higher than the level of the gauge, according to data compiled by Bloomberg. The gap widened to 7.02 points on Feb. 17. The last time two-month futures were that high in relation to the index known as the VIX was July 2010.

The S&P 500 has surged 24 percent since Oct. 3 on optimism Europe will resolve the debt crisis. Now, traders are increasing hedges to protect against losses, according to Dominic Salvino, a specialist on the CBOE floor for Group One Trading.

“The consensus bet is that we’re going to have turmoil or some levels of higher volatility in the future,” Liam Dalton, who oversees about $1.8 billion as chief executive officer of Axiom Capital Management Inc. in New York, said in a telephone interview yesterday. “If you were to talk about a breakdown in cooperation in Europe, it would affect everything. If the sentiment goes negative, then you can get these periods of increased volatility.”

Have a wonderful evening everyone.

 

Be magnificent!

When a man has an idea of what he must be and how he must act,

and undermines this by not ceasing to act in the opposite way,

he must realize that his principles, his beliefs, his ideals,

will inevitably fall prey to hypocrisy and dishonesty.

It is the ideal that begets the opposite of itself.

-Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Mediocrity doesn’t mean average intelligence;

it means an average intelligence that resents

and envies its betters.

-Ayn Rand, 1905-1982

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

 

Tangents:

 

From the verbatim report of the trial of Joan of Arc, 1431.

 

On Monday the nineteenth day of February …. the Bishop of Beauvais …. explained to them that a woman named Jeanne called the Pucelle, who was accused of invoking devils and other crimes, and had been delivered and handed over to him from the Very Illustrious Prince the King of France and England [Henry VI] …. Since the Grand Inquisitor of the Faith was not in the town of Rouen, but only his deputy was there, it was ordered and directed by the bishop that the deputy should be called; and that in the presence of notaries he should be summoned to hear the articles and informations which had been made concerning the crimes and evildoing of the said Jeanne, and the scandal which had thereby arisen. –from The Book of Days.

photos of the day

February 20, 2012

Abu Dhabi Ocean Racing with skipper Ian Walker from the UK, on the helm, chases Team Sanya, skippered by Mike Sanderson from New Zealand, during the start of leg 4 of the Volvo Ocean Race 2011-12, from Sanya, China, to Auckland, New Zealand. Race organizers will hold the six boats in Sanya to allow enough time for dangerous conditions to clear, with fears that waves of up to eight meters could wreak havoc with the fleet.

A waning moon is seen in the sky over a building crane decorated with illuminations in Minsk, Belarus.

Sergei Grits/AP

Market Closes for February 20, 2012:

North American Markets

	Market Index	Close	Change
	Dow Jones S&P 500 NASDAQ	Closed for President’s Day
	TSX	Closed for Family Day (Ontario)
International Markets   Close Change NIKKEI 9485.09 +100.92 +1.08% HANG SENG 21424.79 -66.83   -0.31% SENSEX 18289.35 +135.36 +0.75% FTSE 100 5945.25 +40.18 +0.68% CAC 40 3472.54 +32.92 +0.96% DAX 6948.25 +100.22 +1.46% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	Closed for Family Day (Ontario)
CDN. 30 year bond
U.S. 10-year bond	Closed for President’s Day
U.S. 30-year bond

 

Currencies

 

BOC Close	Today	Previous
Canadian $	0.99349	0.99715
US $	1.00656	1.00286

 

Euro  Rate 1 Euro=		Inverse
Canadian $	1.31585	0.75996
US $	1.31448	0.75501

 

Commodities

Gold	Close	Previous
London Gold Fix	1733.70	1724.50

Oil	Close	Previous
WTI Crude Future	104.92	103.24

Market Commentary:

North American markets closed.

 

Have a wonderful evening everyone.

 

Be magnificent!

The absurd denial of the truth  is natural in man.

Man does not want to be, but to appear to be.

He does not want to see what he is, but tries only to see himself as the person

other people take him for, when they talk about him.

-Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

 

Ask yourself whether you are happy

and you cease to be so.

-John Stuart Mill, 1806-1873

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

 

Tangents:

“Mobile devices will outnumber humans this year, according to network firm Cisco’s latest analysis of global mobile data traffic,” says BBC News.  “By 2016, it predicts that there will e 10 billion mobile connected devices around the world.”

In New York Diaries: 1609 to 2009, editor Teresa Carpenter has drawn from numerous personal journal entries and collaged together snapshot impressions of New York over the years.  Here are a few of the moments she captures:

“[The natives] all came on board, one after another in their canoes….They had no houses, but slept under the blue heavens, sometimes on mats of bulrushes interwoven, and sometimes on the leaves of trees.”

-Henry Hudson, Sept. 5, 1609

“Once more in Broadway!…Take care of the pigs.  Two portly sows are trotting up behind this carriage, and a select part of half-a-dozen gentlemen-hogs have just now turned the corner.”

-Charles Dickens, March 2, 1842

“Wrote a few lines to my beloved Catherine, an occupation that takes me out of this odious country….Let me die in a ditch in England, rather than in the Fifth Avenue of New York here.”

-Shakespearean actor William Macready, March 6, 1849

“Today I arrived by train in New York City….walked through the grandeur of Grand Central Terminal, stepped outside, got my first look at eh city and instantly fell in love.  [I]nside myself, I yelled: I should have been born here!”

-Journalist Edward Robb Ellis, May 22, 1947

“I am holding in my hands a piece of paper….that I found lying on the ground in the financial district.  It is an expense report from a company called ‘Cantor Fitzgerald’ written by a man named David R. Meyer….How this piece of paper [is] in such good condition, I can only speculate.”

-Writer Eric Rosenfield, Sept. 11, 2011

photos of the day

February 17, 2012

Librarian Alexander Gordin presents parts of influential scientist Sir Issac Newton’s newly digitized theological collection, at Israel’s national library in Jerusalem. Now Israel’s national library, an unlikely owner of a vast trove of Newton’s writings, has digitized his theological collection, some 7,500 pages in Newton’s own handwriting, and put it online.

Sebastian Scheiner/AP

Filipino students Rudy Roa (l.) and Claire Vinzon prepare to scribble a message on the tribute wall for the late American singer Whitney Houston at a shopping mall in suburban Quezon city, northeast of Manila.

Bullit Marquez/AP

 

Market Closes for February 17, 2012:

North American Markets

	Market Index	Close	Change
	Dow Jones	12949.87	+45.79 +0.35%
	S&P 500	1361.23	+3.19 +0.23%
	NASDAQ	2951.78	-8.07 -0.27%
	TSX	12458.30	-27.29 -0.22%
International Markets   Close Change NIKKEI 9384.17 +146.07 +1.58% HANG SENG 21491.62 +214.34   +1.01% SENSEX 18289.35 +135.36 +0.75% FTSE 100 5905.07 +19.69 +0.33% CAC 40 3439.62 +46.37 +1.37% DAX 6848.03 +96.07 +1.42% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.044	2.011
CDN. 30 year bond	2.631	2.595
U.S. 10-year bond	2.0017	1.9310
U.S. 30-year bond	3.1476	3.0945

 

Currencies

 

BOC Close	Today	Previous
Canadian $	0.99715	0.99708
US $	1.00286	1.00293

 

Euro  Rate 1 Euro=		Inverse
Canadian $	1.31036	0.76315
US $	1.31411	0.76097

 

Commodities

 

Gold	Close	Previous
London Gold Fix	1724.50	1728.10

 

Oil	Close	Previous
WTI Crude Future	103.24	102.29

Market Commentary:

Canada

By Matt Walcoff

Feb. 17 (Bloomberg) — Canadian stocks fell, trimming a weekly gain, as gold shares dropped for the 10th time in 11 days following slower-than-estimated U.S. inflation and before European finance ministers meet to discuss a Greek bailout.

Barrick Gold Corp., the world’s largest gold producer, dropped 2.4 percent as the metal declined. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, rose 0.8 percent as crude oil and natural gas advanced.

Enbridge Inc., Canada’s largest pipeline company, dropped 4.1 percent after reporting earnings that missed estimates.

The S&P/TSX Composite Index decreased 27.29 points, or 0.2 percent, to 12,458.30, reducing its weekly increase to 0.6 percent. The gauge erased gains after the Wall Street Journal reported the International Monetary Fund will contribute less to a Greek bailout than to previous rescues.

“All eyes are on Greece,” 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 ($55 million). “It’s obviously getting people nervous. Greece is not the only problem in the EU. You’ve got Portugal, you’ve got Spain that are potential problems. If you can’t figure one piece of the puzzle out that’s so small, how are you going to figure out those other problems?”

The index has advanced eight of the past nine weeks as improving U.S. employment, manufacturing and housing data overshadowed the European debt crisis. Seventy-four percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

The IMF is likely to contribute 10 percent of a 130 billion-euro ($171 billion) aid package for Greece, the Wall Street Journal said today, citing people familiar with the matter. The organization paid 27 percent of Greece’s 110 billion-euro bailout in 2010, the newspaper said.

Stocks had risen around the world earlier after Italian Prime Minister Mario Monti, German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism today that an agreement on a Greece bailout can be reached on Feb. 20.

The S&P/TSX Gold Index slumped 1.6 percent, extending its loss since Feb. 2 to 6.3 percent. U.S. consumer prices increased

0.2 percent in January, the Labor Department said today.

Economists forecast a 0.3 percent rise in the inflation gauge, according to the median estimate in a Bloomberg survey.

Barrick dropped 2.4 percent to C$46.83. Agnico-Eagle Mines Ltd., which operates in Canada, Mexico and Finland, declined 3.6 percent to C$35.27. NovaGold Resources Inc., which is developing projects in Alaska and British Columbia, lost 3.7 percent to C$8.41.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, decreased 2.9 percent to C$38.30 as copper retreated for a sixth day on the Comex in New York, the longest slump since August.

Natural-gas futures on the New York Mercantile Exchange extended their two-day surge to 11 percent a day after the U.S.

reported a bigger drop in inventories than most analysts in a Bloomberg survey had forecast. Crude oil climbed to a nine-month high.

Canadian Natural rose 0.8 percent to C$37.38. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, gained 1.6 percent to C$13.60.

PetroBakken Energy Ltd., a western Canadian oil and gas producer, jumped 5.3 percent to C$15.42 after agreeing to sell some of its Saskatchewan assets to Crescent Point Energy Corp.

for C$427 million. Petrobank Energy & Resources Ltd., PetroBakken’s largest shareholder, rose 5.3 percent to C$15.38.

Crescent Point dropped 1.9 percent to C$45.59.

Calvalley Petroleum Inc., which operates in Yemen, soared

19 percent to C$1.60 after plunging 19 percent Feb. 14. Workers have suspended a strike at the Masila oil field, which had disrupted oil transportation in the country, according to a government official who declined to be identified because he is not authorized to speak on the matter.

Enbridge, Keyera Corp., and Fairfax Financial Holdings Ltd.

retreated after reporting earnings that trailed analysts’

estimates in Bloomberg surveys.

Enbridge lost 4.1 percent, the most since February 2009, to

C$37.58 after reporting fourth-quarter profit that trailed the average analyst estimate by 6.1 percent, excluding certain items. The company also said Noverco Inc. plans to sell a third of its stake in Enbridge. Caisse de Depot et Placement du Quebec and Enbridge together own Noverco.

Keyera, a natural gas marketing company, slumped 5.6 percent, the most since March 2009, to C$44.75 after reporting a fourth-quarter loss. All five analysts in a Bloomberg survey had forecast a profit.

Fairfax Financial, an insurance holding company, slipped

4.3 percent to C$400 after saying it lost $771.5 million in the fourth quarter. The loss was the most in a quarter since at least 2000.

Propane distributor Superior Plus Corp. jumped 8.6 percent to C$6.43 after reporting fourth-quarter financial results.

Unseasonably warm weather in North America reduced cash flow less than analysts may have forecast, Damir Gunja, an analyst at Toronto-Dominion Bank, said in a note to clients.

US

By Rita Nazareth

Feb. 17 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index near the highest level in about three years, amid optimism Greece will get a bailout.

Banks had the biggest gain in the S&P 500 among 24 groups, rallying 1.7 percent. H.J. Heinz Co., the biggest ketchup maker, and Campbell Soup Co., the largest soup maker, climbed at least

2.6 percent as earnings beat projections. Gilead Sciences Inc.

tumbled 14 percent as some patients relapsed on its hepatitis C drug. General Mills Inc., the maker of Cheerios cereal, retreated 3.6 percent after cutting its profit forecast.

The S&P 500 rose 0.2 percent to 1,361.23 at 4 p.m. New York time. The index is 0.2 percent below its April peak of 1,363.61, the highest level since June 2008. The Dow Jones Industrial Average added 45.79 points, or 0.4 percent, to 12,949.87.

“Greece is the word,” Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion, said in a phone interview. “We’re just reacting to what the euro zone is telling us in terms of the state of negotiations. Do I believe that the euro zone will give Greece more money? Yes. Otherwise, Greece defaults.”

Equities rose as euro-area governments closed in on a deal to unlock a 130 billion-euro ($171 billion) aid package for Greece, seeking to avert the region’s first sovereign default.

Germany signaled that finance ministers may be ready to back Greece’s second bailout in two years when they meet Feb. 20.

“The bar has been raised,” Eric Thorne, who helps oversee about $6 billion at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania, said in a phone interview. “If things don’t go quite smoothly as expected, then the market would experience a fairly steep selloff.”

Today’s gain extended this year’s rally in the S&P 500 to

8.2 percent. Stocks climbed as Europe stepped up efforts to tame its debt crisis and after reports on U.S. manufacturing, housing and jobs bolstered optimism in the world’s largest economy.

Seven out of 10 groups in the S&P 500 rose today as consumer discretionary and financial shares had the biggest gains. The KBW Bank Index of 24 stocks added 1 percent. JPMorgan Chase & Co. advanced 1.2 percent to $38.47. Bank of America Corp. lost 0.9 percent to $8.02. Intel Corp. had the biggest advance in the Dow, rallying 2 percent to $27.37. It’s the highest level since 2007.

Should the S&P 500 rally above its closing peak in April, the gauge would extend its gains, according to Ryan Detrick at Schaeffer’s Investment Research. He said the next target for the S&P 500 would be 1,440, the intraday peak in May 2008.

“It would be a good sign that confidence is coming back,”

Detrick, senior technical strategist at Schaeffer’s, said in a telephone interview from Cincinnati. “People are realizing that things are on much better footing and that should lead to higher equity prices.”

H.J. Heinz gained 4.6 percent to $54.47. The company reported third-quarter earnings excluding some items of 95 cents a share, beating the average analyst estimate of 85 cents.

Campbell Soup added 2.6 percent to $32.90. The company reported second-quarter earnings excluding some items of 64 cents a share. On average, the analysts surveyed by Bloomberg estimated profit of 62 cents.

First Solar Inc. surged 7.3 percent to $42.59. The biggest maker of thin-film solar panels resolved a permitting issue with Los Angeles County for a $1.36 billion power project under construction, paving the way for financing to resume.

Chesapeake Energy Corp. jumped 4 percent to $24.71 after being raised to “buy” from “hold” at Stifel Nicolaus & Co.

The 12-month share-price estimate is $29.

Gilead tumbled 14 percent to $47. Among eight patients with hepatitis C genotype 1 in a clinical trial, six had a viral relapse within four weeks after stopping a 12-week treatment with the medicine, GS-7977, plus ribavirin, Gilead said today in a statement. The two other patients are two weeks out from stopping treatment, and haven’t relapsed, the company said.

General Mills dropped 3.6 percent to $38.34. The company said “weak volume performance” across U.S. retail food categories in December and January hurt results in its fiscal third quarter.

The companies investors hated the most in 2011 have returned twice as much as the S&P 500 this year, burning speculators who bet stocks from Sears Holdings Corp. to Netflix Inc. would keep falling.

The 26 companies in the S&P 500 with the highest so-called short interest relative to shares available for trading rallied

18 percent this year, compared with 8 percent for the full index, data compiled by Bloomberg show. Speculators who borrowed Sears shares and sold them to profit from a drop got hammered as the stock surged 73 percent. Netflix, with short interest of 17 percent at the end of 2011, rose 76 percent.

Banks, commodity and industrial companies, the only groups to post losses last year, are leading stocks higher on signs the U.S. economy is gaining momentum. That’s forcing speculators to cut bearish wagers after pushing them to the highest levels since the market bottomed in 2009, according to a survey by International Strategy & Investment Group.

“It’s been a rotation back into fundamentally sound, economically sensitive companies that had been unduly punished in the second half of last year,” David Spika, who helps oversee $13 billion as an investment strategist at Westwood Holdings Group Inc. in Dallas, said in a telephone interview.

“When the market turns, those shorts have to be covered and that creates momentum.”

Have a wonderful weekend everyone.

Be magnificent!

As long as you pursue pleasure, you are attached to the sources of pleasure;

and as long as you are attached to the sources of pleasure,

you cannot escape pain and sorrow.  The soul shines in the hearts of all living beings.

When you see the soul in others, you forget your own desires and fears,

and lose yourself in the service of others.

The soul shines equally in people on the farthest island, and in people close at hand.

Mundaka Upanishad

As ever,

 

Carolann

Think of all the beauty still left

around you and be happy.

-Anne Frank, 1929-1945

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

 

Tangents:

On this day, in 1932, the firs patent was issued for a tree to James Markham for a peach tree.

 

Nature Note: TREE FORMS IN WINTER

On a walk in the winter you can observe tree forms.  Each species has its own characteristic shape.  But you can also see how a group of two or more trees, perhaps of different species, have grown in concert to form one crown.  Here you are observing a key element in life: when given a chance, nature forms unified wholes. –CH

We all travel the milky way together, trees and men; but it never occurred to me until this storm-day, while swinging in the wind, that trees are travelers in the ordinary sense.  They make many journeys, not extensive ones it is true; but our own little journeys, away and back again, are only little more than tree-wavings – many of them not so much.  –John Muir

The first oil painting I made, when I was five or six years old, was a picture of a tree.  I am sure that I have painted and drawn hundreds of other versions since then.  In their complexity, variety, and particular specificity, trees are among the world’s special archetypal forms.  They offer endless opportunities for artistic invention and rich metaphorical allusion.  In [this] recent painting, Branches and Lines, the branches of the “tree” are made of careening, sweeping railroad trains.  I think of the painting as a metaphor for the experience of contemporary life at the nexus of nature and culture.  –Christopher Brown, Artist.

photos of the day

February 16, 201

People dressed for carnival pose for photographers at the start of the Luzern-Carnival in Lucerne in the early morning hours. The history of Lucerne’s carnival can be traced back over more than 600 years and is best known for its individually hand-crafted masks and costumes paraded in the town’s streets and squares by thousands of revellers during the three-day carnival festival.

A worker looks at an Eiffel tower made from lemons and oranges during the lemon festival in Menton. Some 145 metric tons of lemons and oranges were used to make displays during the 79th festival, which is themed ‘The regions of France,’ and runs from February 17 through March 7.

Eric Gaillard/Reuters

Market Closes for February 16, 2012:

North American Markets

	Market  Index	Close	Change
	Dow Jones	12904.08	+123.13  +0.96%
	S&P 500	1358.04	+14.81  +1.10%
	NASDAQ	2959.85	+44.02  +1.51%
	TSX	12485.59	+123.56  +1.00%
International Markets   Close Change NIKKEI 9238.10 -22.24  -0.24% HANG SENG 21277.28 -87.95    -0.41% SENSEX 18153.99 -48.42  -0.27% FTSE 100 5885.38 -6.78  -0.12% CAC 40 3393.25 +2.90  +0.09% DAX 6751.96 -5.98  -0.09% Bonds

 

Bonds	%Yield	Previous %Yield
CDN. 10 year bond	2.011	2.016
CDN. 30 year bond	2.595	2.595
U.S. 10-year bond	1.9310	1.9344
U.S. 30-year bond	3.0945	3.0809

 

Currencies

 

BOC Close	Today	Previous
Canadian   $	0.99708	0.99985
US   $	1.00293	1.00015

 

Euro  Rate  1 Euro=		Inverse
Canadian $	1.30968	0.76354
US  $	1.31355	0.76129

 

Commodities

 

Gold	Close	Previous
London Gold Fix	1728.10	1726.30

 

Oil	Close	Previous
WTI Crude Future	102.29	102.02

Market Commentary:

Canada

By Matt Walcoff

Feb. 16 (Bloomberg) — Canadian stocks rose for a second day, led by gold and energy producers, after U.S. employment and housing reports beat estimates and natural gas inventories in Canada’s biggest trade market declined more than forecast.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, gained 1.5 percent.

Goldcorp Inc., the world’s second-biggest gold producer by value, advanced 4.3 percent after topping analysts’ average earnings estimate. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by value, increased 2 percent after the U.S. reported higher corn exports.

The S&P/TSX Composite Index climbed 107.35 points, or 0.9 percent, the most in three weeks, to 12,469.38 at 2:03 p.m. Toronto time.

“There’s positive news out of the U.S.,” said Luciano Orengo, who oversees C$1.6 billion ($1.6 billion) as a money manager at Manulife Financial Corp. in Toronto. “Those are the two things that have been weighing the heaviest in the U.S.: the housing picture and the employment picture.”

The S&P/TSX fell 0.7 percent this month through yesterday after rallying 4.2 percent in January. Gold stocks led the decline as the U.S. dollar advanced on concern Greece’s efforts to reduce its budget deficit won’t avert a default. Seven of the world’s 20 largest gold companies by revenue are Canadian, according to Bloomberg data.

Americans filed 348,000 first-time unemployment claims last week, the Labor Department said today in Washington. None of the 45 economists in a Bloomberg survey had estimated a total that low. New-home construction advanced 1.5 percent to an annual rate of 699,000 in January, the Commerce Department said. That beat the median economist estimate of 675,000.

Energy stocks gained with natural gas futures after the U.S. Energy Department said inventories dropped more than 21 of 24 analysts in a Bloomberg survey had forecast.

Canadian Natural increased 1.5 percent to C$36.93. Encana Corp., the country’s biggest natural gas producer, climbed 3.3 percent to C$19.96. Nexen Inc., an oil and gas producer with operations on five continents, rose 3.8 percent to C$19.66 after reporting fourth-quarter earnings that surpassed the average analyst estimate in a Bloomberg survey by 55 percent, excluding certain items.

The S&P/TSX Materials Index gained for the first time in 10 days, ending the longest streak of losses since June 2001.

Goldcorp Inc., the world’s second-largest gold producer by market value, increased 4.3 percent to C$47.19 after beating the average fourth-quarter earnings estimate of analysts in a Bloomberg survey by 9.8 percent, excluding certain items.

Kinross Gold Corp., Canada’s third-biggest gold producer by market value, advanced 7.1 percent, the most since May 2010, to C$11.08 after Tony Lesiak, an analyst at Macquarie Group Ltd., raised his rating on the shares to outperform from neutral. An outperform rating means the analyst forecasts the company will return at least 5 percentage points more than its benchmark over 12 months.

Agnico-Eagle Mines Ltd., which produces gold in Canada, Mexico and Finland, surged 6.6 percent to C$36.37. The shares sank as much as 7.7 percent earlier, after Agnico-Eagle took a $644.9 million writedown on its Meadowbank project and posted a quarterly loss.

Investors who had sold borrowed shares of the company to make a profit on a decline probably took advantage of the tumble to close their positions, John Stephenson, a money manager at First Asset Investment Management Inc. in Toronto, said in an e- mail message. The firm oversees $2.7 billion.

Potash Corp. climbed 2 percent to C$45.73 as corn futures rebounded on the Chicago Board of Trade after settling at the lowest since Jan. 24 yesterday. U.S. exporters sold more corn last week than in any week since October, the Agriculture Department said today in Washington.

Finning International Inc., the world’s biggest Caterpillar dealer, rallied 5.2 percent to C$28.15 after its fourth-quarter earnings surpassed the average analyst estimate by 19 percent, excluding certain items.

Stantec Inc., an engineering and architecture services company, surged 5.1 percent to C$30.79 after initiating a quarterly dividend. The company will pay 15 Canadian cents a share, with the first payment on April 17. Stantec touched C$31.25, the highest intraday since May 2008.

Property-services company FirstService Corp. jumped 5.3 percent to C$31.84 after Frederic Bastien, an analyst at Raymond James Financial Inc., raised his rating on the shares to outperform from market perform. Higher profit margins at the company’s commercial-real-estate unit in the fourth quarter “marked a turning point for the division,” Bastien wrote in a note to clients. An outperform rating means the analyst forecasts the stock will outgain the S&P/TSX over the next year.

Parex Resources Inc., an oil and gas producer with operations in Colombia and Trinidad, plunged 16 percent to C$7.08 after releasing production results that Darren B. Engels and Martin P. Molyneaux, analysts at FirstEnergy Capital Corp., called “disappointing.” At least three firms, including FirstEnergy, cut their ratings on the shares.

US

By Rita Nazareth

Feb. 16 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index near the highest level in about three years, amid better-than-estimated economic reports and optimism that Greece will receive a second bailout.

Financial shares rebounded from earlier losses as Bank of America Corp. rose 4 percent. Microsoft Corp. climbed 4.1 percent on a report that S&P is likely to increase its weighting in the S&P 500. General Motors Co. jumped 9 percent after the automaker posted the biggest annual profit in its 103-year- history. NetApp Inc. increased 7.2 percent as the maker of data- storage products reported revenue that beat analysts’ estimates.

The S&P 500 rose 1.1 percent to 1,358.04 at 4 p.m. New York time. The benchmark gauge for American equities is 0.4 percent away from its peak nine months ago of 1,363.61, which was the highest level since June 2008. The Dow Jones Industrial Average increased 123.13 points, or 1 percent, to 12,904.08.

“I don’t see what the case is for the market collapsing,” Brian Barish, who helps oversee about $7 billion as Denver-based president of Cambiar Investors LLC., spoke in a phone interview.

“The U.S. economy is doing pretty well. Taking the possibility of a euro-Lehman type of event off the table, that has a big effect on sentiment.”

Stocks rose as Americans filed the fewest claims for jobless benefits since 2008 and builders broke ground on more homes than forecast. Manufacturing in the Philadelphia region expanded in February at the fastest pace in four months as orders and sales picked up.

Benchmark gauges extended gains and banks rallied as three euro-area officials said the European Central Bank is swapping its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring. European governments are considering cutting interest rates on emergency loans to Greece and using contributions from the ECB to plug a new financing gap in the second bailout program for Athens, two people familiar with the discussions said.

“We’re more important to Europe than Europe is to us,” Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab Corp., said in a telephone interview. Her firm has $1.68 trillion in client assets. “U.S. economic numbers have been much better than expected. I’m pretty optimistic, but I don’t think we’re going to boom. The debt overhang puts a lid on how fast the U.S. economy can grow.”

Financial shares underperformed the S&P 500 earlier today as Moody’s Investors Service is reviewing 17 banks and securities firms with global capital markets operations.

The KBW Bank Index rose 2.2 percent as all of its 24 companies gained. The gauge fell as much as 0.6 percent earlier today. Bank of America added 4 percent to $8.09. Morgan Stanley rose 1.2 percent to $19.19, after tumbling as much as 4 percent.

Twenty-nine out of 30 companies in the Dow gained today.

Microsoft jumped 4.1 percent, the most in the Dow, to $31.29. The shares rose to the highest price since April 2010. S&P is likely to increase Microsoft’s weighting in the S&P 500 by about 12 percent later this year because Chairman Bill Gates’s stock sales are increasing the amount of shares available for public trading, Adam Holt, an analyst at Morgan Stanley, wrote in a report today.

GM surged 9 percent to $27.17. North America earnings before interest and taxes more than tripled for the year to $7.19 billion. The automaker’s Europe business, including the Opel brand, lost $747 million for the year.

NetApp rallied 7.2 percent, the most in the S&P 500, to $42.74. The maker of data-storage products said revenue in the third quarter was $1.57 billion, above the average analyst estimate of $1.56 billion. The company said it won a record number of new customers and significantly increased the amount of units shipped.

CVR Energy Inc. surged 5.8 percent to $29.20. Carl Icahn offered to pay $30 a share in cash and give stockholders the right to collect an additional $7 a share if any other bidder tries to buy the oil-refining company.

Even with the stock’s 24 percent gain since Icahn disclosed an investment in January, a buyer could offer about a 40 percent premium and still purchase CVR at the lowest valuation relative to earnings of any takeover greater than $500 million in the U.S. oil refining and marketing industry, according to data compiled by Bloomberg. Icahn, CVR’s biggest investor, urged the company this week to put itself up for sale.

Amazon.com Inc. sank 2.5 percent to $179.93. The world’s largest Web retailer fell after Morgan Stanley downgraded the stock, citing competition from Apple Inc. and the decline of traditional media such as CDs and video games.

J.M. Smucker Co. slumped 8.4 percent to $71.60. The maker of Folgers coffee forecast 2012 earnings excluding some items of $4.65 a share at most. On average, the analysts surveyed by Bloomberg estimated profit of $5.

A gauge of homebuilders in S&P indexes dropped 0.8 percent. PulteGroup Inc., the largest U.S. homebuilder by revenue, declined 1.8 percent to $8.87. The shares retreated after David Goldberg, an analyst at UBS AG, cut the rating to “neutral” from “buy,” citing valuation concern.

Price swings by the S&P 500 have narrowed to a nine-month low following the measure’s biggest rally to start a year since 1997. The distance between its intraday low and high has averaged 0.86 percent since Feb. 2, a 10-day level last seen on May 5, according to data compiled by Bloomberg.

Volatility has diminished after the S&P 500 advanced 6.8 percent in 2012. When the 10-day average swing was this low in May, the index had just peaked on April 29 and went on to slump 19 percent through October. The current narrowing signals the rally may be running out of steam, said Katie Stockton, chief market technician at Greenwich, Connecticut-based MKM Partners.

“It reflects a loss of momentum, which had been very strong until last week,” Stockton wrote in an e-mail.

 

Have a wonderful evening everyone.

 

Be magnificent!

When a man is deprived of the foundation that provides him everything,

his poverty loses its best virtue, simplicity, to become no more than disgraceful and sordid.

His wealth is no longer splendid, but becomes merely extravagant.

His appetites no longer remain within natural limits; they no longer have the one goal

of meeting the needs of his life; they become an end in themselves,

setting fire to his existence, and dancing madly by the light of the flames.

-Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Inspiration comes very slowly and quietly.

-Brenda Ueland, 1891-1985

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

Senior Vice-President &

Senior Investment Advisor