Category: Newsletters

 

Dear Friends,

“Follow your dreams…They know the way…”

-Kobi Yamada

Photos of the Day:

 December 7, 2011

 

Lightning Flashes in Chile above a volcano, in this June 5^th Reuters Photo of The Year entry for 2011. (Reuters)

People participate in an early-morning Yoga session in Chandigarh India. (Reuters)

Market Commentary

 

Canada

By Matt Walcoff

 Dec. 7 (Bloomberg) — Canadian stocks rose, led by banks, on speculation the Group of 20, International Monetary Fund and European Central Bank may take measures to alleviate the European debt crisis.

Bank of Nova Scotia, Canada’s third-largest lender by assets, gained 2.3 percent after an analyst at Royal Bank of Canada boosted his rating on the shares. Enbridge Inc., the country’s biggest pipeline company, increased 2.5 percent after releasing plans for its Seaway pipeline. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, fell 4 percent after saying it may have to shut down an oil-sands upgrader for maintenance. The Standard & Poor’s/TSX Composite Index advanced 67.48 points, or 0.6 percent, to 12,148.73 a day before a meeting of European Union leaders.

 “Everyone is waiting and holding their breath to see what happens in Europe,” David Cockfield, a money manager at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($198 million). “The great hope is with France and Germany more or less on the same page, with a little strong-arming they can bring the rest of the group in line and at least give some indication of a joint front to meet some of these problems.”

Like every other developed-market benchmark stock index besides the S&P 500, the S&P/TSX has fallen this year on concern the European debt crisis may weaken the global economy. The Canadian gauge dropped 10 percent this year through yesterday after advancing seven of the previous eight years. The S&P/TSX Banks Index gained after three euro-region officials with knowledge of the discussions said the European Central Bank may announce measures to stimulate bank lending tomorrow. The officials spoke on condition of anonymity because the deliberations are private.

 Stocks extended their rally after Nikkei reported the G-20 is considering establishing a $600 billion IMF lending program for Europe. Shortly before markets closed, CNBC said the IMF denied the report. Royal Bank, Canada’s largest lender by assets, advanced 2.2 percent to C$49.56. Toronto-Dominion Bank, its biggest domestic competitor, increased 1.3 percent to C$73.85. Scotiabank climbed 2.3 percent to C$49.03 after Andre- Philippe Hardy, an analyst at Royal Bank, raised his rating on the shares to “outperform” from “sector perform.” Hardy cited “Scotiabank’s consistent strategy and execution, the greater growth potential of its international banking arm versus purely North American banking franchises, and the improved wealth management platform” in a note to clients.

 Enbridge rallied 2.5 percent to C$35.80, the first advance in a week, after forecasting capacity of 375,000 barrels of oil a day for its Seaway pipeline in 2013. Enbridge is reversing the pipeline’s flow to run from Cushing, Oklahoma, to Houston-area refineries. Canadian Oil Sands dropped 4 percent to C$20.35. The company may it may shut down its oil-sands upgrader for maintenance if it can’t return to full production rates after a disruption last month.EnCana Corp., Canada’s largest natural gas producer, rose 1.7 percent to C$20.48 after agreeing to sell two processing plants to Veresen Inc. for C$920 million.

Petrominerales Ltd., an energy producer with operations in Colombia, fell 5.9 percent to C$16.10 after sinking 16 percent yesterday. Ian W. Macqueen, an analyst at Canadian Imperial Bank of Commerce, cut his rating on the stock to “sector perform” from “sector outperform” a day after Petrominerales said it suspended drilling at two wells.

 Among other S&P/TSX energy companies, Imperial Oil Ltd., the country’s second-biggest company in the industry, gained 3 percent to C$44.50. Cenovus Energy Inc., the fifth-largest, advanced 2.5 percent to C$33.89. Great Basin Gold Ltd. advanced 16 percent, the most since February 2009, to C$1.21. The prospector with operations in South Africa and Nevada said it executed a $150 million loan agreement. Gold producer Jaguar Mining Inc. had the largest decline in the Canadian stock benchmark index, falling 9.2 percent to C$6.62, after saying Chief Executive Officer Daniel Titcomb left the company.

 US

 Dec. 7 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to the highest level since October, amid optimism that European leaders will announce greater efforts to halt the debt crisis at a summit this week.

Treasuries gained, commodities fell and the euro fluctuated. The Dow rose 46.24 points, or 0.4 percent, to close at 12,196.37 and the Standard & Poor’s 500 Index advanced 0.2 percent at 4 p.m. New York time. The euro was little changed at $1.3412, recovering from a loss of as much as 0.4 percent. Ten- year Treasury yields decreased for the first time this week, losing six basis points to 2.03 percent. The S&P GSCI Index of commodities slumped 0.9 percent as sugar, coffee, gasoline and wheat lost more than 2 percent. The S&P 500 erased an earlier loss in the final hour of trading after Nikkei reported that the Group of 20 nations is considering a $600 billion International Monetary Fund lending program to supplement Europe’s efforts to tame the sovereign- debt crisis. Stocks trimmed gains in the final minutes as CNBC said the IMF denied the report.

 “It’s difficult to get a bottom line outcome on the European situation,” Philip Dow, director of equity strategy at Minneapolis-based RBC Wealth Management which oversees about $160 billion, said in a telephone interview. “Macro concerns are driving the market,” he said. “It’s a challenging environment to manage money.”  Financial shares in the S&P 500 rose 1.2 percent as a group, leading gains among seven of the 10 main industry groups.

JPMorgan Chase & Co. climbed 2.3 percent after Chief Executive Officer Jamie Dimon said the company can buy back $1 billion or more in stock, adding that the bank may or may not repurchase more shares. JPMorgan led the Dow’s advance, followed by gains of at least 1.2 percent in Bank of America Corp., Johnson & Johnson, Cisco Systems Inc. and American Express Co. The S&P 500 extended its gain for the year to 0.3 percent

and the Dow is up 5.4 percent in 2011. Pressure on Europe’s leaders to halt the spread of the region’s debt crisis at a summit starting tomorrow intensified as the EU had its AAA long-term rating put on “creditwatch negative” by S&P following a similar action on 15 of the 17 euro governments. The action “does not have any impact on the sovereign credit ratings on non- eurozone members of the European Union,” John Piecuch, director of communications at S&P, said in an e-mail. Deutsche Bank AG and BNP Paribas SA were among European lenders that also were given a negative outlook by S&P.

 The Stoxx Europe 600 Index slipped 0.2 percent. Banca Monte dei Paschi di Siena SpA, Italy’s third-biggest bank, led a drop among lenders. ING Groep NV fell 4.7 percent after saying it plans to take a charge related to its U.S. annuity business. European stocks gained earlier after the Financial Times reported yesterday that officials were negotiating a bigger rescue effort to discuss at the European summit, including running both temporary and permanent rescue funds in tandem.

Gains evaporated after Germany rejected combining the current and permanent euro-area rescue funds and expressed pessimism over the outcome of this week’s summit. Three euro-area officials with knowledge of policy makers’ deliberations said the European Central Bank may announce a range of measures tomorrow to fight the crisis. Options for the ECB include loosening collateral criteria so that institutions have more access to cheap ECB cash and offering them longer-term loans, said the officials, who spoke on condition of anonymity because the discussions are private.

 After U.S. financial markets closed, Canadian Finance Minister Jim Flaherty said today there has not been discussion among the Group of 20 nations on a $600 billion plan to boost lending to the IMF. He reiterated that Canada opposed the idea of the IMF leading a loan package for Europe and said the region’ s governments should solve the problem internally.

The euro depreciated against 11 of its 16 major peers, while the dollar weakened against 13.  Most international investors predict at least one nation will eventually dump the euro and they say greater fiscal ties or a smaller currency area are the best fixes for the region’s debt crisis, according to the quarterly Bloomberg Global Poll. Almost half the respondents in the poll say one or more countries will leave the 17-nation bloc within a year and almost a third more predict an exit by the end of 2016. Never before has the euro influenced U.S. stocks as much as this year, a sign that American equities aren’t going anywhere until Europe’s crisis is solved. The link between the Dow average and swings in the currency reached a record on Dec. 2, according to data compiled by Bloomberg. The so-called correlation coefficient showing how much two markets rise and fall in tandem hit 0.85, the highest level since the euro was founded in 1999, data on 60-day rolling averages show. A reading of 1 means assets are moving in lockstep.

 Have a wonderful evening everyone!

As Always,

 

Kyle for Carolann.

 

Dear Friends,

Tangents:

 

Lord Byron, Journal, December 6^th, 1813.

Awoke, up an hour before being called; but dawdled three hours in dressing.  When one subtracts from life infancy (which is vegetation), sleep, eating, and willing – buttoning and unbuttoning – how much remains of downright existence?  The summer of a dormouse.

Birthdays:

Ira Gershwin, lyricist, b. 1896

Old Man Sunshine – Listen, you!
Never tell me Dreams Come True!
Just try it –
And I’ll start a riot.
Beatrice Fairfax – don’t you dare
Ever tell me he will care;
I’m certain
It’s the Final Curtain.
I never want to hear
From any cheer-
Ful Polyannas,
Who tell you Fate
Supplies a Mate –
It’s all bananas!
They’re writing songs of love,
But not for me;
A lucky star’s above,
But not for me.
With Love to Lead the Way,
I’ve found more Clouds of Gray
Than any Russian play
could guarantee…

        -Gershwin, 1930
Alfred Eisenstaedt, photographer, b. 1898

Market Commentary:

Canada

By Matt Walcoff

Dec. 6 (Bloomberg) — Canadian stocks fell for the third time in four days, led by financial companies, after Bank of Montreal reported fourth-quarter earnings that missed the average analyst estimate in a Bloomberg survey.

BMO, Canada’s fourth-biggest lender by assets, lost 3.5 percent after its profit excluding certain items missed the average estimate by 3.4 percent. Copper producer Quadra FNX Mining Ltd. soared 40 percent after agreeing to be bought by KGHM Polska Miedz SA. Petrominerales Ltd., which produces oil and gas in Colombia, plunged 16 percent after halting some production.

The Standard & Poor’s/TSX Composite Index slipped 38.08 points, or 0.3 percent, to 12,081.25. “People are saying, ‘Where’s the significant growth going to come from for the Canadian banks?’” Anil Tahiliani, a money manager at McLean & Partners in Calgary, said in a telephone interview. The firm oversees about C$1 billion ($989 million). “It’s hard to say what’s going to drive the banks forward other than the global economic picture getting better.”

The S&P/TSX climbed 5.7 percent in the previous six days as central banks in Europe, Asia and North America cut lenders’ borrowing costs and Italy’s cabinet passed a package of spending cuts and tax increases. Canada’s benchmark stock gauge has fluctuated with developments in the European debt crisis this quarter, which has overshadowed growth in Canadian companies’ earnings.                    

The S&P/TSX Financials Index fell after Toronto-based BMO missed the analyst estimate for the first time in five quarters. Bank of Montreal slumped 3.5 percent to C$57.74. Royal Bank of Canada, the country’s biggest lender, slipped 1.5 percent to C$48.50. Regional lender Canadian Western Bank dropped 4.7 percent, the most since July 2009, to C$27.13 after Sumit Malhotra, an analyst at Macquarie Group Ltd., reduced his rating on the shares to “neutral” from “outperform.”

The U.S. Dollar Index declined and raw-materials companies rose after the Financial Times said the European Union was in talks to almost double its bailout fund. The newspaper cited unnamed European officials.

Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, increased 2.9 percent to C$43.90 as corn advanced for the first time in four days. Goldcorp Inc., the world’s second-largest gold producer by market value, climbed 1.4 percent to C$52.54 as the metal erased its losses in electronic trading.                        

Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi copper mine in Mongolia, rose 5.1 percent to C$22.71 after Australia’s Business Spectator said Rio Tinto is “widely expected” to buy the shares of Ivanhoe it doesn’t already own. The website didn’t cite any sources. Luke Distelhorst, a spokesman for Ivanhoe, said the company has no comment on the report.

Quadra FNX, which operates in the U.S., Canada and Chile, jumped a record 40 percent to C$15.88 after saying Lubin, Poland-based KGHM, the biggest copper producer by European output, will buy it for C$15 a share in cash. The purchase would be the biggest acquisition of a Canadian base-metals company by price since Rio Tinto bought Alcan Inc. for $43 billion in 2007.

European Goldfields Ltd., which is developing mines in Greece and Romania, surged 22 percent, the most since December 2008, to C$12.12 after Sky News said Eldorado Gold Corp. has approached it about a potential takeover. The network didn’t say where it got its information. European Goldfields said in a statement it received “preliminary and indicative approaches from third parties” regarding potential deals.                   

Petrominerales plunged 16 percent, the most since September 2008, to C$17.10 after saying it has suspended some production until it improves water-disposal capacity. Pacific Rubiales Energy Corp., which also operates in the country, retreated 4.2 percent to C$20.27.

Athabasca Oil Sands Corp., PetroChina Co.’s partner in oil- sands development, rallied 6.1 percent to C$13.35. The companies may be close to receiving regulatory approval for the MacKay project, Jeff Martin, an analyst at Peters & Co. in Calgary, said in an e-mail message.

Yoga-wear retailer Lululemon Athletica Inc. slumped 6.5 percent to C$45.98 after Taposh Bari, an analyst at Jefferies & Co., reduced his 12-month share-price estimate to $54 from $59. Bari cut his 2012 profit forecasts after the Vancouver-based company reported sales that missed the average analyst estimate in a Bloomberg survey last week.

Canadian National Railway Co., the country’s largest railroad, slipped 1.8 percent to C$78.39 after Gary Chase, an analyst at Barclays Plc, cut his rating on the shares to “underweight” from “equal weight.” CN is more-expensive relative to forecast earnings for 2012 than other North American railroads, Chase wrote in a note to clients.

Capstone Infrastructure Corp., which owns stakes in alternative-energy power plants, sank 37 percent to a record-low C$3.54 after cutting its earnings forecast and saying it may reduce its dividend.

Sandvine Corp. tumbled 35 percent, the most since March 2008, to C$1.20. The maker of hardware and software for Internet service providers said fourth-quarter revenue was C$19.5 million ($19.3 million) to C$20 million, compared with an average analyst estimate in a Bloomberg survey of C$29 million.

US

By Rita Nazareth

Dec. 6 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a second day, on speculation European leaders may act to contain the debt crisis after S&P put 15 euro nations on review for possible downgrade.

3M Co. added 1.5 percent as revenue may increase as much as 6 percent next year amid a boost from acquisitions. General Electric Co. rose 2.4 percent as Sanford C. Bernstein & Co. raised its recommendation. Darden Restaurants Inc., operator of the Red Lobster chain, tumbled 12 percent after cutting its full-year sales and profit growth forecasts.

The S&P 500 advanced 0.1 percent to 1,258.47 at 4 p.m. New York time, rebounding from an earlier drop of 0.3 percent. The Dow Jones Industrial Average added 52.30 points, or 0.4 percent, to 12,150.13. About 6.3 billion shares changed hands on U.S. exchanges, or 19 percent below the three-month average.

“The market wants to go higher,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which manages $3.4 billion, said in a telephone interview. “Europe is finally talking on a constructive manner to solving its problems. If they come up with something that’s credible, this market has another 7 percent to 10 percent to the upside.”

German Finance Minister Wolfgang Schaeuble said S&P’s warning will help force European leaders to ratchet up efforts to resolve the crisis. S&P said today the European Financial Stability Facility may lose its top credit rating if any of its guarantors have their own debt grade cut.

Stocks turned higher in the afternoon as the Financial Times reported that officials are negotiating a bigger rescue effort to discuss at this week’s European Union summit, including running two separate bailout funds simultaneously. Bloomberg News reported discussions about the combination of the temporary and permanent rescue funds on Oct. 20.

“Europe is going to be an ongoing story,” Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., which oversees about $75 billion, said in a telephone interview. “It seems like every day they’ve got a new solution of the problem. I hear at least one new story of a bailout package every day. Is this really what’s going to bail them out?”

3M rallied 1.5 percent to $82.13. Sales may be $30.2 billion to $31.5 billion, according to a presentation on the company’s website, in line with the $30.6 billion average estimate from analysts surveyed by Bloomberg. The maker of Scotch-Brite sponges and Nexcare thermometers expects earnings per share of $6.25 to $6.50 next year, also tracking estimates.                          

GE added 2.4 percent to $16.72. Sanford C. Bernstein raised its recommendation for the Fairfield, Connecticut-based company to “outperform” from “market perform,” citing rising dividends and energy orders starting in 2012. Eli Lilly & Co. advanced 3.9 percent to $38.86, the highest price since Nov. 8. Shares of the drugmaker could rise more than 50 percent should its drug for Alzheimer’s disease succeed, Sanford C. Bernstein said in a note to clients.

A gauge of 12 homebuilders in S&P indexes rallied 1.2 percent. Toll Brothers Inc. gained 2.7 percent to $21.30. The largest U.S. luxury-home builder reported earnings that beat analysts’ estimates as prices rose and sales improved at its East Coast communities. MetroPCS Communications Inc. added 7.8 percent to $9 for the biggest gain in the S&P 500. The pay-as-you-go U.S. wireless carrier was raised to “outperform” from “market perform” at William Blair & Co., which said the stock’s price doesn’t reflect the company’s “healthy balance sheet.”                      

Darden fell 12 percent, the most in three years, to $41.82. The restaurant operator said sales and profit this year will grow more slowly than previously forecast as the company works to revive its Olive Garden chain.

A measure of transportation shares had the biggest decline in the S&P 500 among 24 industries, falling 0.8 percent. Union Pacific Corp. lost 1.7 percent to $102.84. Laszlo Birinyi says he knew it would be hard to make predictions for 2012 in October, when he saw a headline suggesting that markets would rise or fall depending on whether the tiny nation of Slovakia approved a bailout plan for Europe.

Birinyi, president of stock market research and money- management firm Birinyi Associates Inc., says markets are so volatile that it doesn’t take much to send them reeling, reports Bloomberg Markets magazine in its January issue.

“There are so many exogenous factors that to try to forecast the market with a degree of confidence is difficult,” Birinyi says. The best strategy for stock investors, he says, is to stick with iconic brands, such as Apple Inc. or Ralph Lauren Corp., and with companies that offer “meaningful dividends” of at least 5 percent.

 Have a wonderful evening everyone.

Be magnificent!

The whole universe is to us a writing of the Infinite in the language of the finite.

-Swami Vivekananda, 1863-1902

As ever,

Carolann

If you think you can, you can.  And if

you think you can’t, you’re right.

             -Mary Kay Ash, 1918-2001 

 

Dear Friends,

Tangents:

On this day,

Actor, filmmaker, Woody Allen, was born in 1935:

How to make God laugh: Tell him your future plans. ~Woody Allen.

1891: Basketball created.

1955: Rosa Parks was arrested.

I dwell in Possibility-

A fairer House than Prose-

More numerous of Windows-

Superior – for Doors –

 

Of Chambers as the Cedars-

Impregnable of Eye-

And for an Everlasting Roof-

The Gambrels of the Sky-

 

Of Visitors – the fairest-

For Occupation – This –

The spreading wide my narrow Hands-

To gather Paradise-

     -Emily Dickinson

Photo of the Day 

A member of dancer-illusionists company Momix performs during a press rehearsal of its latest show called ‘reMIX’ in Madrid. Sergio Perez/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Dec. 1 (Bloomberg) — Canadian stocks fell for the first time in four days, led by banks and commodity producers, as a contraction in Chinese manufacturing and an increase in U.S. jobless claims revived concern that growth will slow.

Gildan Activewear Inc. lost 33 percent, the most in the benchmark equity index, after forecasting a quarterly loss. Bank of Nova Scotia, Canada’s third-biggest lender by assets, fell 2.5 percent. First Quantum Minerals Ltd., the country’s second- largest publicly traded copper producer, erased 3.1 percent. The Standard & Poor’s/TSX Composite Index fell 90.82 points, or 0.7 percent, to 12,113.29.

“We had a very impressive rally yesterday, so it’s not unexpected that the market is off ever so slightly today,” Jennifer Radman, a money manager at Caldwell Investment Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($982 million). “Everyone has to digest a little bit the actions taken by the central banks, because it was very similar to the announcements made in the fall of 2008, and we all know what happened in the markets at that point.”

The S&P/TSX rallied 4 percent in the biggest one-day gain since March 2009 yesterday after central banks in Europe, Asia and North America cut lenders’ borrowing costs to bolster the financial system. The S&P/TSX fell 17 percent in October 2008 after the U.S. Federal Reserve cut the Fed Funds Target rate to 1 percent from 2 percent.                    

A purchasing managers’ index compiled by the China Federation of Logistics and Purchasing slid to 49 in November, lower than all but two of 18 forecasts in a Bloomberg News survey. Readings below 50 signal a contraction.

U.S. jobless claims climbed by 6,000 to 402,000 in the week ended Nov. 26 that included the American Thanksgiving holiday, Labor Department figures showed today in Washington. The median forecast of 43 economists in a Bloomberg News survey called for a drop to 390,000.

Gildan Activewear dropped 33 percent, the most in a day since 2008, to C$16.54. The company forecast a loss in the first quarter of 40 cents a share, citing high cotton prices, distributor destocking and discounting.                      

Lululemon Athletica Inc. slumped 5.7 percent, the most since Oct. 3, to C$47.88. The yoga-wear retailer reported third- quarter sales that trailed analysts’ estimates. Revenue increased 31 percent to $230.2 million, missing the average analyst estimate of $235.3 million.

Magna International Inc., Canada’s largest auto-parts maker, fell 2.2 percent to C$35.60.

Banks fell for the first time in four days even after Toronto-Dominion Bank and Canadian Imperial Bank of Commerce reported quarterly results that beat analyst estimates.

Toronto-Dominion, country’s second-largest lender by assets, fell 1.5 percent to C$71.90. The bank said fourth- quarter profit rose 58 percent to C$1.57 billion ($1.54 billion), or C$1.69 a share. Earnings excluding some items of C$1.77 a share exceeded the average analyst estimate of C$1.55 a share.

CIBC, the country’s fifth-largest lender, declined 1.3 percent to C$72, after its earnings excluding some items beat the average analyst estimate by 3.5 percent. Bank of Nova Scotia lost 2.5 percent to C$50.24. Royal Bank of Canada, the country’s largest lender, declined 0.5 percent to C$47.03.

Mining companies slumped as gold erased earlier gains and as copper dropped. Barrick Gold Corp., the largest producer of the precious metal, slipped 1.3 percent to C$53.38. Goldcorp Inc., the world’s second-largest gold producer by market value, fell 1.2 percent to C$54.32. First Quantum erased 3.1 percent to C$19.96.

US

By Rita Nazareth

Dec. 1 (Bloomberg) — U.S. stocks declined as better-than- forecast manufacturing growth and a rally in French and Spanish bonds were not enough to extend the biggest three-day gain in the Standard & Poor’s 500 Index since March 2009.

Financial stocks fell the most in the S&P 500 among 10 industries, dropping 1 percent, as Massachusetts sued some of the largest lenders over foreclosure practices. Alcoa Inc. lost 2.1 percent as commodities retreated. Kohl’s Corp. slumped 6.4 percent after November sales missed estimates. Yahoo! Inc. advanced 3.3 percent as a group including Alibaba Group Holding Ltd. was said to prepare a bid for the company.

The S&P 500 slid 0.2 percent to 1,244.58 at 4 p.m. New York time. The index rallied 4.3 percent yesterday as six central banks took action on Europe’s debt crisis by making it cheaper for lenders to borrow in dollars. The Dow Jones Industrial Average decreased 25.65 points, or 0.2 percent, to 12,020.03. Trading volume on U.S. exchanges dropped to about 6.8 billion shares, or 16 percent below the three-month average.

“Pressures on the financials are still out there,” Timothy Ghriskey, who oversees $2 billion as chief investment officer of Solaris Group LLC in Bedford Hills, New York, said in a telephone interview. “The economic data was positive, but Europe is still a concern. The coordinated central bank action is not a solution. It buys them some time.”

Stocks rose earlier today as Spain and France sold 8.1 billion euros ($10.9 billion) of bonds, sending yields lower across Europe. In the U.S., manufacturing expanded in November at the fastest pace in five months.                      

Equities reversed gains as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. were among five banks sued by Massachusetts for allegedly conducting unlawful foreclosures and deceiving homeowners.

The KBW Bank Index lost 0.8 percent after yesterday’s 7.2 percent jump. JPMorgan decreased 1.7 percent to $30.46. Citigroup slipped 1.8 percent to $26.99. Bank of America added 1.7 percent to $5.53, reversing an earlier decline.

Gauges of commodity shares in the S&P 500 fell at least 0.6 percent after a contraction in China’s manufacturing fueled concern Europe’s crisis is damaging the global economy as yesterday’s moves by central banks were viewed as only a temporary fix. Alcoa, the largest U.S. aluminum producer, dropped 2.1 percent to $9.81.

Kohl’s fell the most in the S&P 500, erasing 6.4 percent to $50.37. The department-store chain said sales at stores open at least one year decreased 6.2 percent in November. Analysts on average estimated an increase of 2.1 percent.                      

Barnes & Noble Inc. plunged 16 percent, the most since Aug. 19, to $14.59. The largest U.S. bookstore chain reported second- quarter sales that missed the average analyst estimate by 4.3 percent, according to Bloomberg data.

Stocks pared declines in the afternoon as investors awaited tomorrow’s jobs report. Payrolls may have climbed by 125,000 workers in November, after rising 80,000 the prior month, economists surveyed by Bloomberg projected ahead of the Labor Department report.

“People are looking for catalysts,” Peter Jankovskis, who helps manage about $2.4 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “One catalyst may be additional signs of strength in the U.S. You may have some people wanting to make sure that they are in because they are expecting a big number on the jobs front.”

Yahoo rallied 3.3 percent to $16.23. Alibaba Group and Softbank Corp. are in advanced talks with Blackstone Group LP and Bain Capital LLC about making a bid for all of Yahoo, said three people with knowledge of the matter.                          

A bid may value Yahoo at more than $20 a share because of tax savings tied to the Internet company’s stakes in Alibaba and Yahoo Japan, said two of the people, who declined to be identified.

 Clearwire Corp. rallied 14 percent to $2.03. The money- losing wireless carrier paid creditors $237 million in interest after striking a new network-sharing agreement with partner Sprint Nextel Corp.

The S&P 500 will end next year at 1,250 as a stagnating U.S. economy damps valuation increases for equities, Goldman Sachs Group Inc.’s David Kostin said.

The strategist lifted his estimate for earnings by companies in the benchmark measure to $100 a share in 2012 from $98, according to a note dated yesterday. He boosted his projection for combined profit this year by $1 to $97.

The S&P 500 declined 0.9 percent this year through yesterday amid concern European officials will fail to tame the region’s debt crisis, triggering a global recession. The gauge’s price-earnings multiple based on estimated profit for the next year has averaged 12.9 times this year and fell as low as 11 times on Oct. 3, according to data compiled by Bloomberg.

“The U.S. economy remains in stagnation,” Kostin said. “This fact will limit any significant rally or sustained P/E expansion in the S&P 500 in 2012. The high degree of political uncertainty coupled with downside policy tail risk drives our view that equity investors should focus on the underlying fundamentals and position portfolios for the worst while hoping for the best.”

Have a wonderful evening everyone.

Be magnificent!

Your reactions are shared by all humanity.

Your brain is not yours,

it has evolved through centuries of time.

So we are questioning deeply whether there is an

individual at all.  We are the whole of humanity,

we are the rest of mankind.

 

-Krishnamurti, 1895-1986

As ever,

Carolann

Everything that irritates us about others

can lead us to an understanding about

ourselves.

               -Carl Jung, 1875-1961 

 

 

Dear Friends,

Tangents: Sorry, no newsletter last night because our office building was hit with the power outage that affected much of downtown intermittently yesterday as a result of B.C. Hydro’s problems.  

Today: 1989, Czechoslovakia ends Communist rule.           

            1878, writer C.S. Lewis was born.

            1832, writer Louisa May Alcott was born.

I was reading an article in the most recent edition of The New Yorker last night that reminded me of the debate going on in Canada right now over the beaver as our national symbol.   It was a commentary by Adam Gopnik in honor of the U.S. Thanksgiving holiday last Thursday on how the turkey almost became the symbol of America.  Benjamin Franklin disliked the choice of the bald eagle as the national bird, and it was in a letter to his daughter, in 1784, that he proposed putting the turkey in its place.  The eagle, Franklin points out, is “a bird of bad moral character.  He does not get his living honestly….He watches the labor of the fishing hawk; and when that diligent bird has at length taken a fish, and is bearing it to his nest for the support of his mate and young ones, the bald eagle pursues him, and takes it from him.”  Truly, a one-per-cent kind of bird. 

Photos of the day

November 29, 2011

Green Peace activists dressed as trees protest the deforestation of the Brazilian Amazon jungle in Durban, South Africa on the second day of the two-week UN climate conference attended by 192 parties seeking agreement on future action to curb climate change. John Robinson/Green Peace/AP.

Ecuador’s Tungurahua volcano spews volcanic lava accompanied by large clouds of gas and ash near Banos, south of Quito. Authorities are encouraging residents living near the volcano to evacuate. The Tungurahua volcano has been in an active state since October 1999. Carlos Campana/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 29 (Bloomberg) — Canadian stocks rose for a second day as energy stocks gained with natural gas futures on forecasts for colder temperatures in the northern U.S. and banks and Research In Motion Ltd. rallied.

Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, advanced 3.3 percent. Royal Bank of Canada, the country’s biggest lender by assets, increased 1.6 percent after the U.S. Conference Board reported higher consumer confidence. RIM, the BlackBerry maker, climbed 5.8 percent after an analyst at Sanford C. Bernstein & Co. raised his rating on the shares.

The Standard & Poor’s/TSX Composite Index rose 92.29 points, or 0.8 percent, to 11,732.50.

“Natural gas seems to have a little bit of life, and oil, no matter what the economy seems to be doing, stays around $100” a barrel, Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, said in a telephone interview. The firm oversees about C$1.7 billion ($1.7 billion). “That’s good for Canadian companies.”

The S&P/TSX surged 1.6 percent yesterday after falling each of the previous four weeks, the longest streak of weekly drops since July 2008. The index has fluctuated with developments in the European debt crisis this quarter as concern that problems in Greece, Italy and Spain will hurt the global economy has overshadowed growth in Canadian companies’ profits.

Energy stocks advanced after AccuWeather Inc. forecast below-normal temperatures for New York and Chicago. Crude oil increased for a third day on the U.S. consumer confidence report.

Canadian Natural climbed 3.3 percent to C$36.35. Suncor Energy Inc., the country’s largest oil and gas producer, rose 1.5 percent to C$29.35. Athabasca Oil Sands Corp., PetroChina Co.’s partner in oil-sands development, jumped 5.1 percent to C$11.63.

Nexen Inc., an oil and gas producer with operations on five continents, advanced 4.5 percent to C$15.95 after agreeing to sell a 40 percent stake in British Columbia shale-gas fields to Tokyo-based Inpex Corp. and JGC Corp.

Canada’s seven largest banks each climbed after the New York-based Conference Board said its index of consumer confidence rose more than all 70 economist forecasts in a Bloomberg survey.

Royal Bank gained 1.6 percent to C$45.01. Toronto-Dominion Bank, its biggest domestic rival, increased 1.1 percent to C$69.63. Bank of Montreal, Canada’s fourth-largest lender by assets, advanced 1.2 percent to C$57.41.                        

RIM climbed 5.8 percent to C$18 after Pierre Ferragu, an analyst at Bernstein, raised his rating on the stock to “market perform” from “underperform.” The shares had plunged 71 percent this year through yesterday.

“As the failure of RIM’s current strategy becomes more obvious, we see shareholder activism leading to a change in management and a takeover — or at least the anticipation of it,” Ferragu wrote in a note to clients.

Shares also rallied after Alan Panezic, vice president of platform product management said in an interview that RIM will offer companies software to support competing smartphones. Laszlo Birinyi, founder of Westport, Connecticut-based Birinyi Associates Inc., recommended RIM shares in an interview on CNBC.

Raw-materials producers in the S&P/TSX rose as the U.S. dollar fell against all other major currencies and gold and copper gained.

Goldcorp Inc., the world’s second-biggest gold producer, advanced 1 percent to C$51.24. San Gold Corp., which operates in Manitoba, rallied 10 percent to C$1.80 after closing at the lowest since April 2009 yesterday. SouthGobi Resources Ltd., which mines coal in Mongolia, rose 7.6 percent to C$7.21.

Mercator Minerals Ltd., a copper and molybdenum producer, surged 9.8 percent to C$1.68. Jeffrey Woolley, an analyst at Paradigm Capital Inc., began coverage of the company with a “buy” rating in a note dated yesterday.

US

By Michael P. Regan and Rita Nazareth

Nov. 29 (Bloomberg) — Stocks and commodities rose for a second day as U.S. consumer confidence increased by the most since 2003 and European finance ministers discussed efforts to tame the region’s debt crisis. Treasuries pared losses.

The Standard & Poor’s 500 Index added 0.2 percent to 1,195.19 at 4 p.m. in New York, trimming its rally from 0.9 percent. The Stoxx Europe 600 Index rose 0.8 percent. The euro climbed 0.1 percent $1.3329 after earlier erasing a gain of as much as 0.9 percent. The S&P GSCI gauge of 24 commodities advanced 1.3 percent as oil approached $100 a barrel. Ten-year U.S. Treasury yields rose two basis points to 2 percent after dropping 1 point.

U.S. equities added to yesterday’s rally after the Conference Board’s sentiment gauge climbed to 56 from a revised 40.9 in October as consumers grew more optimistic about jobs and income prospects. Europe’s effort to expand its bailout fund to 1 trillion euros ($1.3 trillion) is falling short and finance ministers tonight will discuss channeling European Central Bank loans to struggling nations through the International Monetary Fund.

“The economic reports have shown that the U.S. has been insulated from all the noise coming out of Europe,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “Consumers are not really bothered by that, at least not yet.”

The S&P 500 snapped a seven-day slump yesterday, rallying 2.9 percent for its largest gain in a month, after Thanksgiving- weekend retail sales rose to a record and speculation grew that European leaders would increase efforts to fight the region’s debt crisis.

Today’s gains were led by energy, utility and consumer staples companies. Hewlett-Packard Co., Home Depot Inc. and Exxon Mobil Corp. climbed at least 1.3 percent to pace gains in the Dow Jones Industrial Average.

AMR Corp., the parent of American Airlines, tumbled 79 percent after filing for bankruptcy as it failed to secure cost- cutting labor agreements. Corning Inc., the world’s largest maker of glass for flat-panel televisions, plunged 11 percent to lead a drop in technology shares after cutting its fourth- quarter earnings forecast because of the loss of a contract and lower glass prices.

The reading of 56 in the Conference Board’s confidence gauge topped the most optimistic economist forecast in a Bloomberg survey and compared with the median estimate of 44.

The report was the third-strongest relative to expectations since at least 1999, Bespoke Investment Group LLC said in a note to clients today, and the S&P 500 has rallied on average 1.3 percent on days when the number beat the consensus forecast by 10 or more.

“What it may indicate is that the U.S. equity market has made its low for 2011 since major lows in the equity market do often coincide with lows in consumer confidence,” Michael Shaoul, chairman of Marketfield Asset Management in New York, said in a note to clients.

The Dollar Index, which tracks the U.S. currency against those of six trading partners, declined 0.3 percent. The S&P GSCI index extended yesterday’s 1.4 percent rally as wheat and natural gas climbed more than 2.9 percent to lead gains in 18 of 24 commodities.                     

Federal Reserve Vice Chairman Janet Yellen said the central bank has leeway to spur the U.S. recovery and reduce unemployment by purchasing more assets and clarifying its plan to sustain record-low borrowing costs. Fed Bank of Atlanta President Dennis Lockhart said expanding securities purchases is unlikely to give a sufficient boost to U.S. growth, without ruling out the strategy or other easing options.

Oil climbed 1.6 percent to $99.79 a barrel and earlier topped $100 a barrel in New York as Iranian protesters broke into and vandalized the British Embassy’s compound in Tehran.

Among European stocks, Remy Cointreau jumped 2.9 percent after France’s second-biggest distiller predicted “a substantial increase” in full-year earnings. BASF SE and K+S AG pulled a gauge of chemical makers higher, rising more than 2 percent. IG Group Holdings Plc rallied 9.3 percent, the most since 2010. Italy was again forced to sell bonds at rates exceeding 7 percent today, a level that led Greece, Portugal and Ireland to seek bailouts.               

 Italy sold 3.5 billion euros in three-year debt, 2.5 billion euros of 2022 bonds and 1.5 billion euros in 2020 bonds.

The 2014 note yielded 7.89 percent, the highest since 1996 for a three-year bond and up from 4.93 percent when similar-maturity debt was sold last month. Demand for the 2014 bond was 1.5 times the amount sold and the bid-to-cover for the 2022 bond was 1.34 times, both higher than Oct. 28 auctions.

“High yields are not a real surprise, given the recent developments in Italian yields,” Annalisa Piazza, a strategist at Newedge Group in London, wrote in a report. “Bid-cover was higher than at the previous auction at the end of October as very cheap valuations might have attracted some interest.”

The yield on Italian 10-year bonds increased less than one basis point to 7.24 percent after rising as high as 7.38 percent, while two-year yields slipped one basis point to 7.10 percent after increasing to as high as 7.37 percent earlier.

German 10-year bund yields increased three basis points to 2.33 percent, while yields on U.K. and French 10-year debt decreased. U.S. 30-year bond yields rose three points to 2.96 percent after earlier dropping below German counterparts for the first time since 2009.

Finance ministers tonight are holding an initial discussion on channeling ECB loans to cash-strapped euro nations through the International Monetary Fund, aiming to bring the central bank onto the front lines without violating its ban on direct lending to governments, said people familiar with the situation, who declined to be identified because the talks are at an early stage.

Luxembourg Finance Minister Luc Frieden said the European Financial Stability Facility alone won’t be able to solve the euro region’s debt crisis. The EFSF will need help from the IMF and the European Central bank, Frieden told reporters in Brussels today before a meeting of euro area finance chiefs.

The cost for European banks to fund in dollars rose to the highest level since October 2008 for a fifth day. The three- month cross-currency basis swap, the rate banks pay to convert euro payments into dollars, was 158 basis points below the euro interbank offered rate, from minus 149 basis points yesterday.

The gap has widened from as little as minus 8 basis points on May 4. The MSCI Emerging Markets Index climbed 1 percent.

Benchmark gauges for China, South Korea, Taiwan and Indonesia gained more than 1 percent, while indexes in Russia and India dropped. Egypt’s EGX-30 Index jumped 5.5 percent, the most since 2009 on a closing basis, after a peaceful first day of parliamentary elections.

Have a wonderful evening everyone.

Be magnificent!

 

We think as our ancestors did, away back in pre-historic ages.

Where even tradition cannot pierce the gloom of that past,

there our glorious ancestors have taken up their side of the problem

and have thrown the challenge to the world.

Our solution is renunciation, giving up, fearlessness, and love;

these are the fittest to survive.  Giving up the senses makes a nation survive.

 

      -Swami Vivekananda, 1863-1902

As ever,

Carolann

Under capitalism , man exploits man.  Under communism,

it’s just the opposite.

                 -John Kenneth Galbraith, 1908-2006

 

Dear Friends,

  “There are but two levers which move men – Fear and Interest…”

 -Napoleon Bonaparte

Photo of the Day:

Ed Manders makes final adjustments to lighting artist Bruce Munro’s latest installation Field of Light in the grounds of the Holbourne Museum in Bath, England. (Getty Images)

 

Market Commentary:

Canada 

By Kaitlyn Kiernan

 Nov. 25 (Bloomberg) — Canadian stocks fell for a third day, heading for a fourth straight weekly decline, as the country’s Finance Minister said contagion from the European debt crisis is spreading.

 Suncor Energy Inc., Canada’s biggest oil and gas producer, fell 1.7 percent. Royal Bank of Canada, the nation’s biggest lender, fell 1.2 percent, leading a decline in financial shares. The Standard & Poor’s/TSX Composite Index fell 49.91 points, or 0.4 percent, to 11,441.30 at 2:08 p.m. in Toronto. The index has dropped 3.8 percent in five days, heading for the longest streak of weekly losses since July 2008. “The Canadian economy is a very open economy with exports making up a large part of GDP, so there are a lot of worries about the global situation,” Stephen Gauthier, a portfolio manager at Fin-XO Securities in Montreal, said in a telephone interview. The firm oversees about C$600 million ($573.5 million). “We’ve been losing a lot of ground the last few days because we are waiting to see what is going to happen on a worldwide basis.”

The S&P/TSX fell 15 percent this year though yesterday as it heads toward its first yearly decrease since 2008 and second in nine years. S&P/TSX Materials and Energy indexes lost 19 percent and 18 percent, respectively, this year as the European debt crisis threatened to curb global growth. Energy and raw- materials companies make up 47 percent of Canadian stocks by market value, the most among major developed markets, according to Bloomberg data.

 Stocks erased earlier gains after Reuters reported that Greece is demanding that new bonds issued to investors as part of a debt swap have a net present value of 25 percent, lower than the “high 40s the banks have in mind.” Jim Flaherty, the Canadian Minister of Finance, said in the text of a speech in Toronto that Europe’s debt crisis is creating “contagion” outside the region and policy makers must act while the situation can still be stabilized.

Energy shares fell 0.7 percent as a group after climbing as much as 0.5 percent earlier. Suncor fell 1.7 percent to C$28.27. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, fell for a seventh day, slipping 1.8 percent to C$34.13. TransCanada Corp., the owner of the country’s largest pipeline system, lost 0.7 percent to C$40.69. Royal Bank of Canada slid 0.8 percent to C$43.57. Bank of Nova Scotia, the third-biggest lender, fell 0.6 percent to C$48.05. Toronto-Dominion Bank, the country’s second-largest lender by assets, lost 0.6 percent to C$68.30.

Guyana Goldfields Inc. gained 5.1 percent to C$8.53. The gold explorer signed confidentiality agreements with six parties interested in buying the company and its Aurora gold project in the South American country, Chief Operating Officer Claude Lemasson said. Harry Winston Diamond Corp., the co-owner of the Diavik mine, climbed 1.8 percent to C$10.36 as diamond prices rose 0.2 percent this week.

  US

 By Michael P. Regan and Rita Nazareth Nov. 25 (Bloomberg) — U.S. stocks slipped, capping the worst Thanksgiving-week loss since 1932, and commodities fell as a reduction in Belgium’s credit rating and reports that Greece is demanding bondholders accept larger losses fueled concern Europe’s debt crisis is worsening. Treasuries fell.

 The S&P 500 declined for a seventh straight day, losing 0.3 percent to close at 1,158.67 at 1 p.m. in New York and extending its weekly retreat to 4.7 percent. The S&P GSCI Index of commodities slipped 0.3 percent. The euro lost 0.9 percent to $1.3229. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments lingered near a record, up 6 basis points at 386. The dollar rallied against most peers. U.S. equities erased earlier gains as Reuters reported Greece is demanding that new bonds issued to investors as part of a debt swap have a net present value of 25 percent, lower than the “high 40s the banks have in mind.” Greece’s 10-year bond traded at about 24.3 percent of face value as of today’s close. Equities rose earlier amid reports European leaders were discussing sparing private investors from sharing the costs of bailing out troubled nations.

 “The demands of Greece now totally change the game,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said in an e-mail. “The situation can no longer be called voluntary by any stretch of the imagination.

The equity markets in the United States may test the lows again as there is increasing concern of a major recession in Europe.” Energy producers and retailers had the biggest declines among 24 industries in the S&P 500, with Exxon Mobil Corp. down 0.9 percent and Amazon.com Inc. slumping 3.5 percent. 

Twenty-two of 30 retailers in the S&P 500 retreated as Black Friday, the biggest retail day of the year, arrived with consumer sentiment at levels previously reached during recessions, as a record share of households said this is a bad time to spend, according to the Bloomberg Consumer Comfort Index. The measure has reached minus 50 or less in nine of the past 10 weeks, an unprecedented performance in its 26-year history. Banks advanced following reports that some European officials oppose forcing private investors to share the cost of bailing out countries with the region’s permanent rescue fund.

German Chancellor Angela Merkel and French President Nicolas Sarkozy “confirmed their support for Italy, saying that they are aware that the collapse of Italy would inevitably lead to the end of the euro,” Italian Prime Minister Mario Monti told a Cabinet meeting, according to an e-mailed statement.

 European governments may ease provisions in a planned permanent rescue fund requiring bondholders to share losses in sovereign bailouts, German Finance Minister Wolfgang Schaeuble suggested. Schaeuble signaled that Germany may retreat from demands that private creditors contribute to rescues in exchange for European treaty amendments toughening rules on budget oversight. The S&P 500 Financials Index rose 0.4 percent today and has tumbled 13 percent in November to lead the S&P 500’s 7.6 percent slide.

 U.S. financial shares “had been knocked down dramatically and there’s a better tone today,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview. “We have to hope they can get their act together in Europe and we go back to concentrating on what we’re doing here.” Treasuries fell on speculation investors seeking refuge from volatility in the European sovereign-debt markets may have pushed U.S. government yields too low. The 10-year note’s yield rose eight basis points to 1.97 percent. The rate is up from a record low of 1.67 percent on Sept. 23.

 The dollar increased against 15 of 16 major peers, surging 1.2 percent against the Swiss franc and at least 1 percent against the Norwegian krone and Swedish krona. The euro weakened against 12 of 16 major peers. Silver and gasoline lost at least 1.9 percent to lead declines in 19 of 24 commodities tracked by the S&P GSCI. Crude oil 1.2 percent to $97.36 a barrel as of 1:44 p.m. in New York.

  Have a Wonderful Weekend Everyone!

As Always,

 Kyle, for Carolann.

 

Dear Friends,

Tangents:

I read an interesting story on The Dead Sea Scrolls today; it was part of a story on the current exhibit of the Scrolls at Discovery Times Square Museum in New York, which opened October 28^th and will run to April 15^th, 2012.  These ancient scraps of animal skin or papyrus are over 2000 years old and are written in Hebrew, Aramaic and Greek , with texts sacred to all three Abrahamic religions – Judaism, Christianity and Islam, and so, of course, they inspire many.   More than 60 years after the first of them were discovered in caves at Qumran, in the West Bank about 13 miles east of Jerusalem, they have recently begun the second phase of their modern existence, thanks to technology.  This is due to the fact that in September, the Israel Museum, with the help of Google, began putting its Dead Sea Scroll collection online, where it can now be examined at leisure and in great detail by everyone. The Israel Antiquities Authority (IAA), with its own large collection of scrolls, is expected to follow suit in December.  Both efforts are intended to open the scrolls to “crowd sourcing,” where new insights might come from anyone who studies them online, thereby aiding the work of scholars.  Isn’t that amazing?  The Israel Museum’s Dead Sea Scrolls are viewable online at : dss.collections.imj.org.il/.  

My mother phoned this morning and she was reminiscing about this day, November 22^nd, in 1963 when J.F. Kennedy was assassinated.  She loved JFK, as so many did.  I am exactly the same age as Caroline Kennedy, so what I remember is being sent home from school in the middle of the day, and taking a short-cut through the woods with my sister, in order to get home quickly.  It was a cold November day in Montreal and there was so much snow; when we arrived home, we found my mother seated, watching, she had moved the television set into the kitchen so she wouldn’t miss anything… 

Photos of the day 

November 22, 2011

 Swans sit in a boat during the annual collection of Hamburg’s famous ‘Alster Swans’ in Hamburg, Germany. Every year the swans are collected from waterways around the northern German city of Hamburg and taken to winter quarters where they are fed and cared for until the spring. Fabian Bimmer/Reuters.

Market Commentary:

Canada

By Kaitlyn Kiernan

Nov. 22 (Bloomberg) — Canadian stocks rose for the first time in five days as gold shares surged after debt concerns in the U.S. and Europe spurred demand for the metal as a protection of wealth.

Barrick Gold Corp., the largest producer of the precious metal, gained 2.2 percent. Royal Bank of Canada, the nation’s biggest lender, rose 1.1 percent after the Federal Reserve said it discussed monetary easing at its last meeting. Suncor Energy Inc., Canada’s biggest oil and gas producer, dropped 1.7 percent on concern slower growth will hurt fuel demand.

The Standard & Poor’s/TSX Composite Index rose 10.47 points, or 0.1 percent, the most since Nov. 11, to 11,795.19.

“I would call this a directionless market,” Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees about C$300 million ($289.6 million). “There are just a lot of uncertainties and unknowns. The politicians in Washington have large difficulty ahead of them and the budget problems will be with us for awhile, while Europe continues to relatively do nothing while bond yields rise.”

The S&P/TSX erased 3.6 percent from Nov. 15 through yesterday as the index had its longest streak of losses since June 8. The benchmark index of Canadian stocks has slipped 12 percent this year and is set to underperform the S&P 500 for the first year since 2003. The Standard & Poor’s 500 Index, the U.S. equity benchmark, has dropped 5.5 percent this year.

Spain’s three-month borrowing costs more than doubled at an auction today, sending two-year yields toward the highest level since 2003, while Belgium’s 10-year bond yields rose to more than 5 percent, adding to concern the euro crisis is spreading. Concern that leaders are running out of options to solve the crisis sent French and Italian yields higher.

U.S. gross domestic product climbed at a less-than-forecast 2 percent annual rate from July through September, down from a previous estimate of 2.5 percent, revised Commerce Department figures showed today in Washington.

Gold rebounded from the lowest in almost four weeks after mounting debt woes in the U.S. and Europe increased demand for gold as a safe haven.

Goldcorp Inc., the world’s second-largest producer of the metal by market value, gained 1.9 percent to C$52.41. Barrick climbed 2.2 percent to C$50.98. Kinross Gold Corp., Canada’s third-largest company in the industry by market value, climbed 5.8 percent to C$13.61.                        

An index of banks in the S&P/TSX gained 0.3 percent after the Federal Reserve released minutes from their Nov. 1-2 meeting that showed some policy makers said the central bank should consider further economic stimulus.

Royal Bank of Canada rose 1.1 percent to C$44.93. Bank of Nova Scotia, the third-biggest lender, gained 0.3 percent to C$49.94.

Canadian energy companies fell as slowing U.S. economic growth and the European debt crisis increased concern that demand for fuel would slump, while a strengthening Canadian dollar threatened to crimp profits. The Canadian currency rose after a report showed retail sales in the country grew at the fastest pace in a year in September.                      

Suncor slipped 1.7 percent to C$30.42. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, dropped 1 percent to C$36.10. Enbridge Inc., Canada’s biggest pipeline company, lost 1.3 percent to C$35.76.

Smartphone maker Research In Motion Ltd., which gets 39 percent of its revenue from the U.S., slid 2.9 percent to C$17.51. The shares had fallen 3.8 percent yesterday after two analysts cut profit estimates and the company reported a glitch that caused some customers to be unable to turn on their BlackBerry Bold devices.

Consumer staples companies also slipped as Saputo Inc. fell 3 percent to C$38.92. Canada’s largest food producer was cut to “market perform” from “outperform” at Bank of Montreal, which cited a 12-month price estimate of C$45 a share.

Shoppers Drug Mart Corp., Canada’s largest drug store chain, slipped 1 percent to C$41.78. Metro Inc., a Montreal- based grocery chain, erased 0.9 percent to C$50.15.

US

By Rita Nazareth

Nov. 22 (Bloomberg) — U.S. stocks fell, driving the Standard & Poor’s 500 Index to its longest slump in almost four months, as slower-than-estimated economic growth overshadowed signs the Federal Reserve may provide more stimulus.

Alcoa Inc. and Bank of America Corp. slid at least 2.1 percent to pace losses in the Dow Jones Industrial Average. The Dow Jones Transportation Average slumped 1.1 percent. Campbell Soup Co. decreased 5.3 percent as the world’s largest soup maker’s sales trailed projections. Netflix Inc., the video- streaming and DVD subscription service, sank 5.4 percent after agreeing to sell $400 million in stock and convertible notes.

The S&P 500 declined 0.4 percent to 1,188.04 at 4 p.m. New York time. The gauge lost 5.6 percent in five days. The Dow retreated 53.59 points, or 0.5 percent, to 11,493.72 today.

“Economic growth remains slow,” John Carey, a Boston- based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $220 billion. “The evidence is not there that the actions of the Fed and the fiscal stimuli have really helped much. Investors remain concerned about Europe. People are getting concerned as they look into next year and wonder what happens to Europe and what happens here.”

Stocks fell as revised Commerce Department figures showed that gross domestic product climbed at a 2 percent annual rate from July through September, less than projected and down from a 2.5 percent prior estimate. Equities briefly turned higher as some Fed officials said the central bank should consider easing policy further, according to minutes of their Nov. 1-2 meeting.

Benchmark gauges also rose earlier today after the International Monetary Fund revamped its credit-line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, as European leaders fail to end their debt turmoil. Michael Meister, finance spokesman for German Chancellor Angela Merkel’s Christian Democratic party, said “we haven’t any new bazooka to pull out of the bag.”

“The IMF has realized there’s an unresolved issue and they are trying to do what they can to keep this from reaching a liquidity crisis,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati, which oversees $14.5 billion of assets, said in a telephone interview.

The Morgan Stanley Cyclical Index dropped 0.8 percent amid concern about economic growth. The KBW Bank Index retreated 1.3 percent. Bank of America lost 2.2 percent to $5.37. Alcoa declined 2.2 percent to $9.26.

Campbell Soup lost 5.3 percent to $31.84. The company reported fiscal first-quarter sales of $2.16 billion, trailing the average analyst estimate by 2.4 percent, according to Bloomberg data.                         

Netflix sank 5.4 percent to $70.45. Technology Crossover Ventures will purchase $200 million in zero-coupon senior convertible notes due 2018, and T. Rowe Price Associates Inc. funds will buy $200 million in stock. The transactions suggest Netflix’s cash squeeze may last longer than it had anticipated, said Michael Pachter, an analyst with Wedbush Securities. The company needs to spend more to make its streaming content stand out against a growing list of competitors, he said.

Hewlett-Packard Co. slipped 0.8 percent to $26.65 after losing as much as 6 percent following profit forecasts that missed analysts’ estimates. Meg Whitman, who took over as chief executive officer two months ago, used her first earnings conference call to tell investors they need to lower their expectations. The first-quarter profit forecast and full-year earnings outlook both missed estimates — a sign the company is still reeling from a technology-spending slump.

 The recent retreat in U.S. stocks, led by banks and brokerages, is signaling more losses through the end of the year, a period in which the S&P 500 usually performs best, according to Bank of America Corp.

Financial shares have posted the worst return this month among the S&P 500’s 10 industries, dropping 9.9 percent through yesterday. The weakness in the group and the benchmark gauge’s decline below 1,200 suggested the index is at risk of sinking to this year’s intraday low of 1,074.77, said Mary Ann Bartels, Bank of America’s head of U.S. technical and market analysis.

“A seasonal year-end rally will likely turn into a Christmas Bah, Humbug,” Bartels wrote in a note to clients yesterday. She sees a 50 percent chance of “a European meltdown” that would send the S&P 500 to as low as 935.

Have a wonderful evening everyone.

Be magnificent!

I often ask myself at what point can a man and a beast that cannot talk recognize each other.

From the early paradise, at the dawn of creation, runs the path where their hearts meet.

Although their connection has long been forgotten,

traces of their continuing association has not been erased.

And, suddenly, in a wordless harmony,

a dim memory awakens and the beast looks on the face of the man with tender trust

and the man casts his eyes upon the beast with an amused tenderness.

It is as if two friends, both wearing masks, meet

and vaguely recognize each other through their disguises.

 

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

The most positive men are

the most credulous.

  -Alexander Pope, 1688-1744

 

 

Dear Friends,

Tangents:

Notable:  November 21^st, 1783 ~ Man’s first flight in a balloon.

Just back from Vancouver and got to see the Occupy Vancouver sight in front of the Art Gallery dismantling with one of my clients who drove me back to Harbor Air after our meeting.  No comment.

Gary came in from Toronto yesterday afternoon from an oncology meeting he attended the past couple of days.  We went to see Gordon Lightfoot last night at the Vancouver Center.…great poet, lyricist, artist, musician….but might be time to forget the live performances we thought.  However, it was the first night of his tour, so he deserves the benefit of the doubt;  maybe he’ll be more into it as the tour progresses. 

Before the show, we checked out the new restaurant l’Abbatoir which has been getting some positive traction in the past year.  Innovative for sure; pretty good food.  Worth a visit. 

Market Commentary:

Canada

By Kaitlyn Kiernan

Nov. 21 (Bloomberg) — Canadian stocks dropped for a fourth day, led by technology and energy companies, as U.S. lawmakers failed to agree on budget cuts and Moody’s Investors Service warned of France’s fiscal challenges.

 Suncor Energy Inc., Canada’s biggest oil and gas producer, lost 1.8 percent as crude oil fell to a one-week low amid European recession concerns. Teck Resources Ltd., Canada’s largest base-metals producer, dropped 1.3 percent as copper and gold fell. Research In Motion Ltd. retreated 3.8 percent after saying some customers couldn’t turn on the company’s BlackBerry Bold devices because of a glitch.

The Standard & Poor’s/TSX Composite Index fell 107.72 points, or 0.9 percent, to 11,784.72.

“It’s ugly,” said Brendan Caldwell, chief executive officer of Caldwell Investment Management Ltd. in Toronto, which manages C$1 billion ($962 million). “The markets are suffering from uncertainty fatigue,” Caldwell said in a telephone interview. “The markets would very much like to move on away from the machinations of politicians. We invest in companies, not politicians. The businesses themselves are doing quite well, but the political backdrop is completely chaotic.”

The S&P/TSX dropped 3.1 percent last week, its third straight weekly loss, as Italian, Spanish and French bond yields increased, adding to concern the European debt crisis will continue to spread. The benchmark index of Canadian stocks extended its decline to 2.9 percent this month through Nov. 18 after advancing 5.4 percent in October to end a 7-month slump.

The index is heading for its first yearly decrease since 2008 and second in the past nine years.                       

 The U.S. deficit-cutting congressional supercommittee will probably announce that it has failed to agree on $1.2 trillion of federal budget savings for today’s deadline, a Democratic aide said in an e-mail. France’s rising financing costs are increasing the nation’s fiscal challenges, according to a report issued by Moody’s Investors Service today.

The S&P/TSX Information Technology Index fell the most of 10 industry groups as Research In Motion slipped. The BlackBerry maker erased 3.8 percent to C$18.04 after reporting the Bold glitch.

JMP Securities LLC cut the Waterloo, Ontario-based company to “underperform” from “market perform,” saying low-priced smartphones are “increasingly threatening.” Mike Abramsky, an analyst at RBC Capital Markets in Toronto, lowered his price estimate on the stock to $23 from $29 because of slower sales and lower earnings projections.

Celestica Inc., which makes electronics for companies including Research In Motion, slipped 2.8 percent to C$8.25.

Raw material companies retreated after gold fell to the lowest level in three weeks as a stronger dollar curbed demand for the metal as an alternative investment.

Goldcorp Inc., the world’s second-largest producer of the metal by market value, slipped 0.8 percent to C$51.46. Barrick Gold Corp., the world’s largest producer, decreased 0.6 percent to C$49.87. Kinross Gold Corp., Canada’s third-largest company in the industry market value, declined 2.3 percent to C$12.87.

Teck Resources erased 1.3 percent to C$34.69 as copper fell to a four-week low. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, slumped 1.7 percent to C$17.69.

Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi copper and gold project in Mongolia, decreased 1.5 percent to C$19.31.                     

The S&P/TSX Energy Index lost 1.4 percent as crude oil fell.  Suncor decreased 1.8 percent to C$30.94. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, dropped 1.6 percent to C$36.48. Financial stocks fell along with U.S. and European banks.

Manulife Financial Corp., North America’s fourth-biggest insurer, lost 1.2 percent to C$11.20. Bank of Montreal, Canada’s fourth-biggest bank, fell 1.5 percent to C$56.18.

SXC Health Solutions Corp. rose 4.5 percent to C$56.90. The pharmacy benefits manager was raised to “outperform” from “neutral” at Cowen & Co., which cited “strong fundamentals and growth opportunities ahead.”

Valeant Pharmaceuticals International Inc., the country’s largest drugmaker, rose 0.6 percent to C$44.02. The Mississauga, Ontario-based company agreed to buy iNova Pharmaceuticals (Australia) Pty. for as much as A$700 million ($698 million), gaining the Duro-Tuss and Difflam cold remedies and broader access to markets in the Southern Hemisphere.

US

By Rita Nazareth

Nov. 21 (Bloomberg) — U.S. stocks slumped, giving the Standard & Poor’s 500 Index its longest decline since September, amid concern the U.S. government will be forced to submit to $1.2 trillion in automatic spending cuts.

All 10 industries in the benchmark measure declined as 468 out of 500 companies retreated. Bank of America Corp. tumbled 5 percent to pace losses in financial shares. Hewlett-Packard Co. and Caterpillar Inc. dropped at least 2.9 percent. The Dow Jones Transportation Average slid 2.3 percent. Gilead Sciences Inc. plunged 9.1 percent after agreeing to buy Pharmasset Inc. for about $11 billion in cash. Pharmasset soared 85 percent.

The S&P 500 fell 1.9 percent to 1,192.98 at 4 p.m. New York time. The benchmark gauge for American equities has lost 5.2 percent in four days. The Dow Jones Industrial Average declined 248.85 points, or 2.1 percent, to 11,547.31 today. The supercommittee created to cut the deficit said after the close of U.S. exchanges that it failed to reach a deal.

“The supercommittee was expected to pave the way to extend the stimulus that is in the system,” Barry Knapp, the New York- based head of U.S. equity strategy at Barclays Plc, said in a telephone interview. If stimulus is not extended, “you get a big hit to the economy in the first quarter right at the point when the economic fallout from the European debt crisis is hitting,” he said.

The decline pushed the S&P 500 below levels representing the top of a price range that prevailed in the two months after the U.S. was stripped of its AAA credit rating by S&P on Aug. 5.

Rallies after the downgrade brought the S&P 500 to closing highs of 1,204.49 on Aug. 15, 1,218.89 on Aug. 31 and 1,216.01 on Sept. 16, according to data compiled by Bloomberg.

The S&P 500 may fall to 1,100 if the supercommittee fails to reach an agreement, according to Goldman Sachs Group Inc.’s David Kostin. The strategist said in a note dated Nov. 18 that lawmakers’ failure to agree on at least the minimum required savings would demonstrate “the inability of elected officials to act in the long-term best interests of all Americans.”

U.S. shares joined European equities in retreating. The Stoxx Europe 600 Index declined 3.2 percent, the most since Nov. 1.  France’s rising financing costs are increasing the nation’s fiscal challenges, according to report issued by Moody’s Investors Service. Germany’s Finance Ministry said the country’s expansion is “noticeably slower” this quarter.

“The selloff in risk assets reflects concerns about the inability of policy makers to catch up with unsettling economic and financial realities, particularly in Europe and America,”

Mohamed A. El-Erian, the chief executive officer at Pacific Investment Management Co. in Newport Beach, California, said in an e-mail. His firm runs the biggest bond fund.

Stocks slumped last week as higher government bond yields in Spain, France and Italy spurred concern the European debt crisis is intensifying outside Greece. Financial stocks in the S&P 500 lost 5.6 percent last week, the biggest drop among 10 industries, after Fitch Ratings said further contagion from Europe’s debt turmoil would be a risk for U.S. banks.

Financial, industrial and technology shares had the biggest losses in the S&P 500 among 10 groups today, slumping at least 1.9 percent. The Morgan Stanley Cyclical Index slid 2.4 percent on concern about economic growth. Bank of America sank 5 percent to $5.49. Caterpillar dropped 3 percent to $91.12. Hewlett- Packard fell 4 percent to $26.86.

Gilead Sciences tumbled 9.1 percent to $36.26, while Pharmasset soared 85 percent to $134.14. Gilead agreed to buy Pharmasset, betting that its experimental hepatitis C treatments will lead the next generation of therapies in a market that may reach $20 billion by 2020.

Jefferies Group Inc. rose 0.4 percent to $10.20, after losing 9.5 percent last week. The investment bank whose stock dropped in the wake of MF Global Holdings Ltd.’s bankruptcy, cut stakes in European debt again to fend off speculation about its financial strength.

Focus Media Holding Ltd. plummeted 39 percent to $15.43 after Muddy Waters LLC, the short-selling firm known for prompting Sino-Forest Corp.’s retreat, recommended betting against the digital advertising company.

Muddy Waters spurred a 74 percent drop in Sino-Forest between June and August after saying the timber owner overstated the value of its assets. Today’s report said Focus Media has fewer television screens in its ad network than it says and may have overpaid for takeovers to mask losses.                       

Barton Biggs, the hedge fund manager who reduced U.S. equity investments in September before the biggest monthly rally since 1991, cut bullish bets again on concern the odds of a U.S. recession have increased.

The Traxis Global Equity Macro Fund’s net long position has been lowered to less than 40 percent, and may be reduced another 15 percentage points, Biggs said during an interview on Bloomberg Television “In the Loop” with Betty Liu today.

“It’s a much more bearish environment than I anticipated,” he said. “We are going to have a decline at least back to the lows of last summer. God forbid, maybe even testing the lows of 2008 and 2009.” testing the lows of 2008 and 2009.’’

The money manager’s optimism on U.S. stocks has gyrated along with the market. He raised the Traxis Global fund’s long equity position to 65 percent after slashing it to 40 percent in September, he said in an Oct. 17 interview. Biggs then boosted the figure to 80 percent, he said two weeks later.

Have a wonderful evening everyone.

Be magnificent!

The autumn comes, a maiden fair

In slenderness and grace,

With nodding rice-stems in her hair

And lilies in her face.

In flowers of grasses she is clad;

And as she moves along,

birds greet her with their cooing glad

Like bracelets’ tinkling song.

 

-Kalidasa, 450-600 AD?

As ever,

Carolann

What loneliness is more lonely

than distrust?

   -George Eliot, 1819-1880

 

Dear Friends,

Tangents:

 

-from The Book of Days,

 

John Donne, November 19^th, 1627:

Angels are creatures that have not so much of a body as flesh is, as froth is, as a vapour is, as a sigh is; and yet with a touch they shall moulder a rock into less atoms than the sand that it stands upon, and a millstone into smaller flour than it grinds.  They are creatures made – yet not a minute older now than when they were first made, if they were made before all measure of time began.  Nor, if they were made in the beginning of time and be now six thousand years old, have they one wrinkle of age in their face or one sob of weariness in their lungs.  They are God’s eldest sons.  They are super-elementary meteors.  They hang between the nature of God and the nature of man and are of middle condition.  And (if we may without offence express it so) they are the riddles of Heaven and the perplexities of speculation.

P.S. I believe in angels.

Photos of the day

November 18, 2011

A woman carries a bag as she harvests chrysanthemum at a field in a flower plantation in Tongxiang, Zhejiang province, China. Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 18 (Bloomberg) — Canadian stocks fell, completing a third straight weekly decline, as gold producers dropped after the U.S. Dollar Index erased most of the day’s loss.

Barrick Gold Corp., the world’s largest gold producer, decreased 1 percent as the metal finished its biggest weekly slump since Sept. 23. TransCanada Corp., the owner of the country’s largest pipeline system, advanced 2.4 percent after Chief Executive Officer Russ Girling said it will fund a rerouted Keystone XL pipeline without issuing more debt.

The Standard & Poor’s/TSX Composite Index slipped 22.99 points, or 0.2 percent, to 11,892.44, extending its weekly decline to 3.1 percent.

“We are caught in this purgatory; the market doesn’t know what it wants to do,” Greg Taylor, a money manager at Aurion Capital Management in Toronto, said in a telephone interview. The firm oversees about C$5 billion ($4.9 billion). “The fears of Europe have compressed valuations on every stock out there.”

The index dropped the most since Sept. 23 this week as bond yields increased in Italy, Spain and France, indicating concern the European debt crisis’s spread will continue. Raw-materials companies led the retreat as the U.S. dollar climbed against 15 of 16 other major currencies.

Gold erased most of its gains today, after advancing as much as 1.1 percent on the Comex in New York, as the U.S. Dollar Index pared its loss to 0.3 percent, after falling as much as 1 percent. Barrick slipped 1 percent to C$50.17. Eldorado Gold Corp., Canada’s fifth-largest gold producer by market value, retreated 2.1 percent to C$17.62.                        

Great Basin Gold Ltd., which mines in Nevada, slumped 6.9 percent to C$1.22, the lowest since March 2009. Leon Esterhuizen, an analyst at Royal Bank of Canada, cut his rating on the shares to “sector perform” from “outperform.”

 Pipeline companies in the S&P/TSX rose for a fourth day. Enbridge Inc., Canada’s biggest pipeline company, rose 0.7 percent to a record C$36.19, advancing for a third day after saying it will buy a stake in the Seaway pipeline system. At least four analysts boosted their 12-month price estimates on the shares yesterday.

TransCanada gained 2.4 percent to C$41.57. The company fell to its lowest market value relative to Enbridge’s since 2000 yesterday after the U.S. State Department delayed approval of the proposed Keystone XL line due to environmental concerns.                         

Neo Material Technologies Inc. surged 10 percent to C$7.83.

The rare earths and zirconium products maker may have jumped because Mark Smith, chief executive officer of Molycorp Inc., said he may buy a company in that industry, Matthew Gowing, an analyst at Mackie Research Capital Corp., said in a telephone interview. Molycorp is considering companies listed on the TSX, Smith said.

Canadian National Railway Co., the country’s largest railroad, advanced for the first time this week, increasing 1.6 percent to C$80.02 as crude oil fell to a seven-day low.

The S&P/TSX Commercial Banks Index climbed after closing at the lowest relative to earnings since March 2009 yesterday.

Royal Bank of Canada, the country’s largest lender by assets, rose 1.1 percent to C$44.42. Bank of Nova Scotia, the third- biggest bank, gained 1.2 percent to C$49.89.

US

By Rita Nazareth

Nov. 18 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index completing its biggest weekly drop in two months, as technology and energy losses overshadowed optimism that the economy is accelerating.

The S&P 500 fell less than 0.1 percent to 1,215.66 at 4 p.m. New York time after rising 0.6 percent earlier, according to preliminary closing data. It retreated 3.8 percent this week. The Dow Jones Industrial Average increased 25.50 points, or 0.2 percent, to 11,796.23.

“The next big catalyst for the stock market will probably be a growing appreciation that not only is the U.S. economy not recessing, but U.S. economic growth is actually accelerating,” James Paulsen, who helps oversee about $333 billion as chief investment strategist at Minneapolis-based Wells Capital Management, said in an e-mail.

The S&P 500 swung between gains and losses as investors watched developments in Europe. The Conference Board’s index of U.S. leading indicators rose more than forecast in October, signaling the largest economy will keep growing in 2012. The U.S. economy may end 2011 expanding at its fastest pace in 18 months as analysts increase their forecasts for the fourth quarter.

Economists at JPMorgan Chase & Co. in New York now see gross domestic product rising 3 percent in the final quarter, up from a previous prediction of 2.5 percent. Macroeconomic Advisers in St. Louis increased its forecast to 3.2 percent from 2.9 percent at the start of November, while Morgan Stanley boosted its outlook to 3.5 percent from 3 percent.

Stocks erased gains earlier today as Deutsche Presse- Agentur reported that Germany’s Foreign Ministry said the nation was considering the possibility of “orderly defaults” beyond Greece. The euro snapped a four-day slump as European Central Bank purchases pushed down Italian and Spanish bond yields and speculation grew that the International Monetary Fund may play a larger role in fighting the debt crisis.

“Until we have some sense of stability in Europe, the volatility will continue,” Mark Bronzo, who helps manage $24 billion at Security Global Investors in Irvington, New York, said in an e-mail. “Better economic growth in the U.S. will provide support for the markets and potentially set the stage for a nice rally if and when Europe does stabilize.”

Have a wonderful weekend everyone.

Be magnificent!

How can you regard yourself as subject and other beings as objects,

when you know that all are one.

 

Brihadaranyaka Upanishad

As ever,

Carolann

Each time someone stands up for an ideal,

or acts to improve the lot of others or

strikes out against injustice, he sends

forth a tiny ripple of hope.

     -Robert F. Kennedy, 1925-1968

 

 

Dear Friends,

Tangents:

 

NATURE POETRY

Concrete, glass, steel –

Meaning limestone, silica, gypsum, sand,

Manganese, sodium, sulfur, ore –

Anything unnatural here?

              -Meg Kearney

 

Photo of the day 

November 17, 2011

Denis Sinyakov/Reuters

Market Commentary:

Canada

By Matt Walcoff

Nov. 17 (Bloomberg) — Canadian stocks fell to a four-week low, led by raw-materials companies, as oil, metals and world equities declined on concern that the European debt crisis will curb growth.

Barrick Gold Corp., the world’s largest gold producer, decreased 3.8 percent after futures dropped the most in seven weeks as investors sold precious metals to cover losses in other assets. Agrium Inc., a farm retailer and fertilizer producer, tumbled 6.5 percent as corn and wheat retreated. Royal Bank of Canada, the country’s biggest lender by assets, dropped 2.6 percent as Spanish bond yields surged to a euro-era high.

 The Standard & Poor’s/TSX Composite Index fell 258.93 points, or 2.1 percent, to 11,915.43, the lowest level since Oct. 20. “Two real countries are in the midst of a massive funding crisis,” Keith McLean, a managing partner at GMP Investment Management in Toronto, said in a telephone interview, referring to Italy and Spain. McLean oversees about C$200 million ($195 million). “Everyone knows the exit price for gold, oil, copper, everything is higher. But if we go into an ‘08 scenario, those prices go a lot lower before they go a lot higher, even gold.’’

The S&P/TSX has dropped 11 percent this year as stocks in the index’s three biggest industries –finance, energy and raw materials — have declined. Equities most-closely tied to the economy had retreated in part on concern the European crisis will lead to sovereign-debt defaults or a recession.                          

Spanish bond yields rose today as the country’s Treasury failed to meet its maximum target of 4 billion euros ($5.4 billion) of notes in a sale. The Madrid-based Treasury sold 3.56 billion euros in bonds at an average yield of 6.975 percent.

The European Financial Stability Facility has no plans for financial assistance for Italy, Reuters quoted an unnamed euro- zone official as saying today. Italian bonds yields also rose this month to highest level since the introduction of the euro.

Precious-metals companies in the S&P/TSX fell today as gold dropped and silver declined the most since Sept. 23 on the Comex in New York.

Barrick lost 3.8 percent to C$50.66. Goldcorp Inc., the world’s second-largest gold producer by market value, slipped 1.9 percent to C$52.51. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, decreased 6.5 percent to C$33.19.

Avion Gold Corp., which mines in Africa, slumped 11 percent to C$1.64. The shares have plunged 25 percent since the company cut its 2011 production forecast on Nov. 15.                         

Corn futures retreated the most since Sept. 30 after the U.S. Agriculture Department said exports of the crop fell to the lowest since June 2004 last week. Profercy, a Leamington Spa, England-based firm that provides research on the fertilizer industry, said natural gas prices will fall in Ukraine, which would reduce a cost advantage for North American producers of nitrogen-based fertilizers.

Agrium dropped 6.5 percent, the most since October 2009, to C$72.26. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, declined 4.3 percent to C$44.11 for a fourth-straight loss.

The S&P/TSX Commercial Banks Index closed at the lowest level since February 2010. Royal Bank decreased 2.6 percent to C$43.95, the lowest price since May 2009. Bank of Nova Scotia, Canada’s third-largest lender by assets, retreated 3.2 percent to C$49.32. Manulife Financial Corp., North America’s fourth- biggest insurer, fell 2.6 percent to C$11.49.                        

Energy stocks declined as crude oil erased yesterday’s 3.2 percent gain, dropping under $99 a barrel. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 3.9 percent to C$37.19. Suncor Energy Inc., Canada’s biggest oil and gas producer, slipped 2.8 percent to C$31.82. Precision Drilling Corp., Canada’s largest contract driller, slumped 6.8 percent to C$11.45.

Iberian Minerals Corp., a base-metals producer with operations in Spain and Peru, soared 38 percent, the most since July 2003, to C$1.09 after agreeing to be bought by Trafigura Beheer BV. The Amsterdam-based oil and metals trading company said it would pay C$1.10 a share for the 52 percent of Iberian it doesn’t already own.

Pharmacy-benefits manager SXC Health Solutions Corp. climbed 7.6 percent to C$54.40 after saying it will buy Greenwood Village, Colorado-based peer HealthTrans LLC. SXC will pay $250 million for HealthTrans, which has about $270 million in annual revenue, SXC said in a statement.

US

By Rita Nazareth

Nov. 17 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index to the lowest level in a month, as concern grew that Europe’s debt crisis will worsen and lawmakers will fail to agree on plans to cut the American deficit.

Commodity and technology shares had the biggest declines among 10 groups in the S&P 500, falling at least 2.1 percent.

Sears Holdings Corp. slid 4.6 percent as the retailer reported a steeper loss. Applied Materials Inc., a producer of chipmaking equipment, sank 7.5 percent as forecasts trailed estimates. Jefferies Group Inc. retreated 2 percent and dropped below $10 intraday for the first time since March 2009.

 The S&P 500 lost 1.7 percent to 1,216.13 at 4 p.m. in New York. Losses accelerated after it fell below 1,229.10, its closing level on Nov. 9 after sinking 3.7 percent. The gauge dropped below its 100-day average. The Dow Jones Industrial Average sank 134.86 points, or 1.1 percent, to 11,770.73.

“It’s a risk-off day,” Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees $1 billion, said in a telephone interview. “There’s a lot of liquidation in the commodity space. You have the obvious story of European yields. The supercommittee may disappoint, but I don’t think this is going to be a main driving force behind this market. There’s too much stuff going on.”

Stocks fell as Reuters reported a euro-area official as saying there are no aid plans for Italy from the European Financial Stability Facility. Spanish bonds sank, driving 10- year yields to the highest since the euro was introduced, as borrowing costs climbed at an auction. Republicans and Democrats on Congress’s supercommittee hardened their positions with less than a week until the deadline to propose deficit cuts.                      

Today’s decline sent the benchmark measure of American equities below its average price of the past 100 days of 1,226, which could be a harbinger of more losses, according to Ryan Detrick, at Schaeffer’s Investment Research.

 “It’s a bad sign for the bulls,” Detrick, the senior technical strategist at Schaeffer’s, said in a telephone interview from Cincinnati. “It’s a sign that the bears are once again trying to take charge and push things lower here. It’s a little discouraging when the market shrugs off good economic news and focus on other things.”

Earlier today, economic reports helped push stocks higher. The fewest Americans in seven months filed for unemployment benefits. Builders broke ground on more homes than forecast in October and construction permits climbed to the highest level since March 2010. Another report showed that manufacturing in the Philadelphia region expanded less than forecast in November as orders and sales cooled.                    

Handheld computers used by traders on the floor of the New York Stock Exchange malfunctioned near the end of session and the closing process was extended past 4 p.m., NYSE Euronext spokesman Rich Adamonis said.

More than seven stocks fell for every two that gained on U.S. exchanges. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, rose 3 percent to 34.51, surging 15 percent in four days.

Concern about global growth drove down commodity shares as China’s central bank said prices haven’t stabilized enough to loosen monetary policy. The Morgan Stanley Cyclical Index slumped 2.4 percent. Alcoa Inc., the largest U.S. aluminum producer, retreated 3.5 percent to $9.62. Intel Corp., the world’s biggest chipmaker, lost 2.4 percent to $24.34.

Sears slumped 4.6 percent to $65.19. Hedge-fund manager Edward Lampert and new Chief Executive Officer Lou D’Ambrosio are emphasizing smaller stores, online commerce and licensing Sears’s brands to turn around the four-year sales slide.

Retailers are having a harder time attracting shoppers, with consumer confidence at the lowest in more than two years.

Applied Materials fell 7.5 percent to $11.53. Profit before certain costs will be 8 cents to 16 cents a share, the company said. Revenue will decline up to 15 percent from the prior quarter, Applied said, indicating sales of as little as $1.85 billion. Analysts on average predicted profit of 18 cents on sales of $2.07 billion, data compiled by Bloomberg show.

Jefferies slumped 2 percent to $10.11. Debt of the New York-based firm tumbled today to levels considered distressed.

Jefferies came under pressure from short sellers after MF Global Holdings Ltd.’s $6.3 billion bet on European debt led to an Oct. 31 bankruptcy and spurred scrutiny of similar stakes at financial firms.

 Chief Executive Officer Richard Handler said turmoil around the investment bank’s shares and publicly traded debt will ease as the fallout dissipates from the collapse of MF.

“It is not surprising that our bonds are under pressure after the assault on our company over the past two weeks,”

Handler said yesterday in an e-mail. “Some bond investors sell first and ask questions later. We expect the market to return to normal pricing once we move beyond the ripple effect of the inaccuracies others have recently disseminated and once investors digest all the information” that Jefferies disclosed.

NetApp Inc. tumbled 12 percent, the most in the S&P 500, to $35.73 The maker of data-storage products forecast third-quarter adjusted earnings of no more than 60 cents a share, 4 cents less than the average analyst estimate.

Angie’s List Inc., the consumer-review website with more than 1 million paying members, surged 25 percent to $16.26 in its trading debut after raising $114 million in an initial public offering.

Have a wonderful evening everyone.

Be magnificent!

Between me and the smallest animal,

the difference is only in manifestation,

but as a principle he is the same as I am,

he is my brother, he has the same soul as I have.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

You don’t stop laughing because you grow

old.  You grow old because you stop

laughing.

          -Michael Pritchard, 1967- 

 

Dear Friends,

Tangents:

 

November 16^th, 1885: Louis Riel hanged, led North West Rebellion, Manitoba, Canada.

-from The Book of Days:

Emily Eden to her sister Lady Buckinghamshire, November 16^th, 1817:

 

Indeed, nobody but an excellent sister could be induced to write on such a gloomy, dispiriting afternoon, but I have put the table close by the fire, with one leg (belonging to the table, not to me) in the fender, to prevent it from slipping away, the armchair close behind the table, and me supported by them both, holding a pen in one hand and the poker in the other, and now, have at you.

Photos of the day 

November 16, 2011

A general view is seen of the Nyamulagira Volcano eruption in eastern Democratic Republic of Congo. The eruption appears to be on a lower section of the volcano, or in a separate caldera with lava flowing north into a non-populated section of the park. Kenny Katombe/Reuters.

Market Commentary:

Canada

By Matt Walcoff

Nov. 16 (Bloomberg) — Canadian stocks fell, led by raw- materials producers, after Fitch Ratings said the spread of the European debt crisis “poses a serious risk” to U.S. banks.

Teck Resources Ltd., Canada’s largest base-metals producer, fell 3.7 percent as copper futures dropped a first time in four days. Barrick Gold Corp., the world’s biggest gold-mining company, declined 1.4 percent as the U.S. dollar advanced a third day against the euro. Jaguar Mining Inc., which produces gold in Brazil, soared 46 percent after two people familiar with the matter said Shandong Gold Group Co. bid for the company.

“It’s no secret that Europe is pretty fragile,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview. The firm oversees about C$1 billion ($980 million). “The Fitch thing is adding more fuel to the fire.”

The Standard & Poor’s/TSX Composite Index slipped 54.91 points, or 0.5 percent, to 12,174.36 after advancing as much as 0.5 percent before the Fitch statement.

 The S&P/TSX has dropped 9.4 percent this year as industries most-tied to economic growth, such as base-metals mining, energy and finance, have declined. World equities have retreated in part on concern the European debt crisis will weaken the broader economy. The International Monetary Fund said in September the world economy will expand 4 percent this year and next, compared with June forecasts of 4.3 percent in 2011 and of 4.5 percent in 2012.

Stocks fell after Fitch said “the broad credit outlook for the U.S. banking industry could worsen” if the debt issue in Europe isn’t resolved soon. Earlier today, the Bank of England said failure to resolve the turmoil could lead to “significant adverse effects” on the global economy.

Base-metals and coal producers in the S&P/TSX declined to a three-week low. Teck lost 3.7 percent to C$37.45. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi copper and gold project in Mongolia, decreased 5.9 percent to C$21.20. Lundin Mining Corp., which operates in Europe, slumped 4.7 percent to C$3.65.

Uranium One Inc., a mining company controlled by Moscow- based ARMZ Uranium Holding, sank 5.7 percent to C$2.49 after S&P assigned the company a “BB-” credit rating, three levels below investment grade. In a statement, the ratings company cited Uranium One’s “limited operating and geographic diversification, relatively short collective mine life, limited track record, and reliance on residual cash flows from its joint venture mine operations.”                   

Precious-metals producers retreated as the U.S. dollar rose against all 16 other major currencies today as investors sought safer assets. Barrick Gold Corp., the world’s largest gold producer, slipped 1.4 percent to C$52.65. Kinross Gold Corp., Canada’s third-biggest company in the industry by market value, fell 1.5 percent to C$14.04. Minefinders Corp., a precious-metals company with operations in Mexico, plunged 11 percent, the most since December 2008, to C$12.46 after the Gold Stock Report newsletter recommended that investors sell the shares.

 Jaguar jumped 46 percent, the most since October 2003, to C$7.98 after two people familiar with the offer said Shandong, the parent of China’s second-largest gold producer by market value, bid $9.30 a share for the company. The people asked not to be identified because the information is confidential. Jaguar received “proposals over the past few weeks” and has decided to explore alternatives, the Concord, New Hampshire-based company said today in a statement.

NovaGold Resources Inc., which is developing gold and base- metals properties, surged 25 percent to C$11.25 after saying it will spin off the Ambler copper project in Alaska. The new company, NovaCopper Inc., will be led by current NovaGold Chief Executive Officer Rick Van Nieuwenhuyse, while Gregory A. Lang, president of Barrick’s North American unit, will become NovaGold’s CEO. The shares’ rally was the biggest since September 2009.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, fell 1.7 percent to C$46.08. James T. Prokopanko, the chief executive officer of Plymouth, Minnesota-based peer Mosaic Co., said at an industry conference today that higher supplies of the nutrient will make prices unsustainable above $600 a ton through 2020.

West Texas Intermediate crude oil settled at a five-month high of $102.59 a barrel after Enbridge Inc. said it agreed to buy ConocoPhillips’s 50 percent interest in the Seaway pipeline system, which runs from Cushing, Oklahoma, to the Gulf Coast, for $1.15 billion. Enbridge will reverse the flow of the line, shipping oil southward. A bottleneck at the Cushing hub has helped keep WTI prices below those of Brent crude traded in London this year.

Canadian Natural Resources Ltd., the country’s second- largest energy producer by market value, rose 3.2 percent to C$38.69. Suncor Energy Inc., the country’s largest oil and gas producer, gained 1.5 percent to C$32.75. Cenovus Energy Inc., Canada’s fifth-biggest company in the industry, increased 1 percent to C$33.94.

US

By Michael P. Regan and Rita Nazareth

Nov. 16 (Bloomberg) — U.S. stocks fell, erasing yesterday’s gains in benchmark indexes, as Fitch Ratings said further contagion from Europe’s debt crisis would pose a risk to American banks. The euro weakened, while oil climbed to a five- month high above $102 a barrel.

The Standard & Poor’s 500 Index lost 1.7 percent to 1,236.91 at 4 p.m. in New York. Most stocks in the Stoxx Europe 600 Index retreated. The euro slipped 0.6 percent to $1.3460 after losing as much as 0.8 percent. Credit-default swaps insuring Italian and Spanish debt retreated from records and Italy’s 10-year yield fell as the European Central Bank bought the nations’ debt. Oil rallied as Enbridge Inc. planned to reverse the direction of a pipeline, potentially alleviating a bottleneck that had reduced prices.

Stocks slid to their lows of the session in the final minutes of trading after Fitch said that while U.S. lenders have “manageable direct exposures” to Greece, Ireland, Italy, Portugal and Spain, further turmoil in those markets poses a “serious risk.” Benchmark U.S. indexes briefly erased losses earlier as Federal Reserve Bank of Boston President Eric Rosengren said the Fed may need to coordinate with the ECB on fighting turmoil in credit markets.

“It’s fear of the unknown spooking the market,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview.

“There may be more exposure to Europe out there than people really think, even if banks think they are covered,” she said. “Increasing oil prices is a concern because it’s like a tax on the consumer.”                      

Early losses in stocks came after Bank of England policy makers said that failure to resolve the European debt turmoil could lead to “significant adverse effects” on the global economy. UniCredit SpA, Italy’s largest bank, prepared to ask central-bank officials to broaden the types of assets accepted as collateral.

Gauges of financial and commodity stocks dropped more than 2 percent to lead losses in all 10 of the main industry groups in the S&P 500. JPMorgan Chase & Co., Citigroup Inc. and Goldman Sachs Group Inc. slid at least 3.8 percent.

 Fitch said its current outlook on the U.S. banking industry is stable because of improving fundamentals and ratings that are lower than before the debt crisis.

“However, risks of a negative shock are rising and could alter this outlook,” the ratings company said today in a statement. “Fitch believes that unless the Eurozone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,”

JPMorgan and Goldman Sachs are among the world’s biggest traders of credit derivatives and have disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Yet they are among firms that don’t provide a full picture of potential losses and gains from a default, giving only net numbers or excluding some derivatives altogether.

Rambus Inc. plunged 61 percent after it lost a $3.95 billion jury trial over allegations that Micron Technology Inc. and Hynix Semiconductor Inc. prevented its memory chips from becoming an industry standard. Abercrombie & Fitch Co. tumbled 14 percent as the retailer’s profit trailed estimates amid higher costs. Dell Inc. slipped 3.2 percent as the computer maker told investors to expect more slow sales growth for the rest of the year.                         

Stocks slid even after the Fed said industrial production in the U.S. advanced 0.7 percent in October, more than the median economist forecast and adding to evidence the world’s largest economy is weathering Europe’s crisis. Other data showed the cost of living unexpectedly fell and homebuilder sentiment improved.

The rally in oil came as Enbridge Inc. agreed to acquire ConocoPhillips’s share of the pipeline that runs between Cushing, Oklahoma, and the Gulf Coast and announced the reversal. The change may alleviate a bottleneck at the Cushing storage hub that had lowered the price of West Texas Intermediate, the grade traded in New York, versus other oils.

Oil helped lead the S&P GSCI Index up 0.9 percent even amid declines in 15 of the 24 commodities tracked by the gauge. Nickel and zinc also climbed at least 2.8 percent, while Kansas wheat, silver and natural gas lost at least 1.8 percent.

Among European stocks, Electricite de France SA slid 4.4 percent as the nation’s opposition Socialist and Green parties united to campaign for the closure of 24 nuclear reactors by 2025. Vivendi SA, the owner of the world’s largest video-game and music companies, advanced 5.6 percent after reporting profit that exceeded analysts’ estimates.

Credit-default swaps on Italy dropped 18 basis points to 576, while contracts on Spain were down 11 basis points at 470.

The yield on the 10-year Italian security declined six basis points to 7.00 percent, while the equivalent-maturity Spanish yield added eight basis points to 6.41 percent. French 10-year yields rose three basis point to 3.71 percent and the nation’s borrowing costs relative to benchmark German bunds retreated from a euro-era record.

The ECB bought larger-than-usual sizes and quantities of Italian debt, said two people with knowledge of the trades, who declined to be identified because the deals are private.

Mario Monti was sworn in as Italian prime minister and finance minister, taking over an unelected government charged with imposing austerity to prevent the euro area’s third-biggest economy from succumbing to the debt crisis. Greek Prime Minister Lucas Papademos won a confidence vote in parliament, receiving a mandate to push through budget measures necessary to secure financing designed to avert a collapse of the economy and keep Greece in the euro.

Benchmark German bunds fell, sending 10-year yields up three basis points to 1.82 percent. German Chancellor Angela Merkel said the nation is prepared to cede some national sovereignty to the European Union to achieve closer economic and political ties.

The pound slid for a third day against the dollar after a report showed U.K. unemployment rose in the three months through September as joblessness among young people climbed above 1 million for the first time since at least 1992. The jobless rate climbed to a 15-year high of 8.3 percent. The FTSE 100 Index of stocks lost 0.2 percent.

The MSCI Emerging Markets Index fell 1 percent. The Hang Seng China Enterprises Index in Hong Kong tumbled 2.9 percent, while Taiwan’s Taiex Index fell 1.4 percent. South Korea’s Kospi Index dropped 1.6 percent.

 Have a wonderful weekend everyone.

 Be magnificent!

I do not mean a universal philosophy, or a universal mythology, or a universal ritual,

but I mean that this world must go on, wheel within wheel.

What can we do?

We can make it run smoothly, we can lessen friction, we can grease the wheels, as it were.

But what?

By recognizing variation.

Just as we have recognized unity, by our very nature so we must also recognize variation.

We must learn that truth may be expressed in a thousand ways, and each one yet be true.

We must learn that the same thing can be viewed from a hundred different standpoints,

and yet be the same thing.

 

-Swami Vivekananda, 1863-1902

As ever,

Carolann

The days that are still to come

are the wisest witnesses.

   -Pindar, 522-443 BC