Category: Uncategorized

Dear Friends,

The Duke of Ever-blunt

The Duke of Edinburgh turns 90 this week.  Some of his memorable comments, according to listverse.com:

• To the Queen, after her coronation: “Where did you get the hat?”
• When asked if he would like to visit the Soviet Union: “The bastards murdered half my family.”
• To Elton John after hearing he had sold his Gold Afton Martin: “Oh, it’s you that owns that ghastly car – we often see it when driving to Windsor Castle.”
• To the president of Nigeria, dressed in traditional robes: “You look like you’re ready for bed!”
• On key problems facing Brazil: “Brazilians live there.”

We shall all be old one day – provided, of course, we can

avoid being slaughtered on the roads or beaten up by some

hooligan in a peace demonstration.

              -Prince Philip, Duke of Edinburgh, 1921-

-from The Globe & Mail, Wednesday, June 8^th, 2011

photos of the day

June 8, 2011

A medium-sized solar flare erupted from the sun in an impressive display captured by NASA cameras aboard an orbiting satellite called the Solar Dynamics Observatory. NASA says the flare peaked Tuesday and created a large cloud that appeared to cover almost half the surface of the sun.

NASA/SDO/AP

A woman walks her dog past a wall near the seafront in Brighton, England.Cathal McNaughton/Reuters

A man looks at the work ‘Organ Mapping’ by Mariechen Danz at the Based in Berlin exhibition in Berlin. The exhibition shows the work of 80 emerging artists who live and work in Berlin.

Thomas Peter/Reuters

Canada

By Matt Walcoff

     June 8 (Bloomberg) — Canadian stocks fell to a six-month low as metal prices dropped a day after U.S. Federal Reserve Chairman Ben S. Bernanke called his country’s economic recovery “frustratingly slow.”

     Barrick Gold Corp., the world’s largest gold producer, declined 2 percent as the U.S. dollar rose. Contract driller Major Drilling Group International Inc. tumbled 6.6 percent after reporting earnings that missed analyst estimates. Sino- Forest Corp., the forestry company that plunged after a short seller said it manipulated financial data, gained 21 percent after analysts at Royal Bank of Canada and Dundee Securities Ltd. expressed confidence in the company.

     The Standard & Poor’s/TSX Composite Index retreated 99.13 points, or 0.8 percent, to 13,183.79, the lowest close since Dec. 16 and the first under the 200-day moving average since Aug. 25. The S&P/TSX has declined seven straight days, the longest streak of losses since June 2006.

     “We continue to have poor numbers” from the U.S., said Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, which manages C$18 billion ($18 billion). “With 70 percent or 80 percent of exports that go to the U.S., if you have an economy that’s not going as well as we thought, it’s certainly a negative for the TSX.”

     The stock benchmark has dropped 4.7 percent since May 30 as data on U.S. employment and manufacturing and Canadian building permits reflected slowing growth. The index closed at its lowest price relative to earnings since September.                      

 Bernanke’s speech in Atlanta yesterday indicated a third round of asset purchases known as quantitative easing is unlikely, according to Sung Won Sohn, an economics professor at California State University-Channel Islands and former chief economist at Wells Fargo & Co.

     The U.S. Dollar index extended its gains after Germany said industrial production dropped in April and German Finance Minister Wolfgang Schaeuble said bondholders must contribute a “substantial” share of a second aid package for Greece.

     Gold futures slipped while silver slumped 1.1 percent.

Barrick declined for a seventh day, losing 2 percent to C$43.36.

Eldorado Gold Corp., which mines in China and Turkey, decreased 2.5 percent to C$13.80 for an eighth-straight loss, the longest streak since 1997.                      

     Silver Wheaton Corp., Canada’s fourth-biggest precious- metals company by market value, retreated 3.5 percent to C$31.76. Silvercorp Metals Inc., which produces the metal in China, sank 11 percent, the most in two years, to C$8.54.

     Base-metals and coal producers fell as copper futures dropped. Teck Resources Ltd., Canada’s largest company in the industry, declined 1.3 percent to C$46.63. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, lost 3.3 percent to C$122.05. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, decreased 2.3 percent to C$21.47 after closing at an eight-month low yesterday.

     Major Drilling sank 6.6 percent to a six-month low of C$12.85 after its fourth-quarter profit trailed the average of six analyst estimates by 37 percent, excluding certain items.

     Westport Innovations Inc., which develops natural-gas engine technologies, plunged 15 percent, the most since February 2009, to C$19.36 after reporting a larger fourth-quarter loss than all eight analysts in a Bloomberg survey had estimated.

     Uranium producers retreated after the New York Times said energy and nuclear officials from several countries pledged to enhance nuclear-safety rules.

     Cameco Corp., the world’s largest uranium producer, fell 2.4 percent to C$25.88. Uranium One Inc., a mining company controlled by ARMZ Uranium Holding, slumped 6.9 percent to a nine-month low of C$3.09. Denison Mines Corp. dropped 9.2 percent to C$1.78.

     Sino-Forest advanced 21 percent to C$4.92. In a note dated yesterday and made public today, Paul Quinn, a Royal Bank analyst, reiterated an “outperform” rating on the company.

     Richard Kelertas, an analyst at Dundee Securities, said on a conference call yesterday that the assertions made by short seller Carson Block are unfounded.

     The shares had plunged 78 percent from June 1 to yesterday.

On June 2, Block, the founder of Hong Kong-based Muddy Waters Research, said Sino-Forest’s stated land holdings do not match Chinese city records and its disclosed production may be inaccurate. The company has denied the statements and published documents on its website it says support its published financial data.

     BlackBerry maker Research In Motion Ltd. lost 2.7 percent to C$35.93, a four-year low. Stephen Patel, an analyst at Gleacher & Co., cut his 12-month price estimate on RIM’s U.S.- traded share to $43 from $56, citing competition and “uncertainty over new handset launches” in a note to clients.

US

By Rita Nazareth

     June 8 (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the longest losing streak since February 2009, as raw-material and financial shares slumped amid growing concern the economy is slowing.

     Visa Inc. and MasterCard Inc. fell at least 1.5 percent after the U.S. Senate rejected a six-month delay of a Federal Reserve rule capping debit-card swipe fees set by the companies.

Ciena Corp., the maker of network gear for the biggest U.S. phone companies, tumbled 16 percent after reporting a wider- than-estimated loss. Gap Inc. slumped 2.4 percent after Barclays Plc cut its recommendation for the largest U.S. apparel chain.

     The S&P 500 fell 0.4 percent to 1,279.56 at 4 p.m. in New York, dropping for a sixth day. The Dow Jones Industrial Average slid 21.87 points, or 0.2 percent, to 12,048.94 today.

     “There’s enough fear,” said Sara Zervos, a New York-based portfolio manager at OppenheimerFunds Inc., which managed more than $185 billion as of March 31. “We’re getting into that negative side of things. This is a soft spot granted it’s been a very significant string of bad data.”

     Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. recovery was “frustratingly slow.” From March 16, when the S&P 500 fell to its lowest level of the year, industries less-tied to economic growth — health care, consumer staples, telecommunications and utilities — have risen the most among 10 groups in the index.

     The Fed today said the economy expanded at a “steady pace” in most of the U.S. while slowing in four of 12 regions as consumers contended with higher food and fuel prices and shortages of parts reduced auto production.

     Reports from the Fed’s district banks “indicated that economic activity generally continued to expand since the last report, though a few districts indicated some deceleration,” the Fed said today in its Beige Book survey of the economy in Washington.

     Manufacturing “continued to expand in most parts of the country,” while slowing in some areas. Consumer spending was “mixed,” it said, while the job market improved “gradually across most of the nation.”

     Stocks extended a worldwide slump today after the World Bank said global gross domestic product may expand 3.2 percent this year, less than the 3.3 percent forecast in January. German industrial production unexpectedly declined for the first time in four months in April, the government said.                         

     Visa dropped 3.9 percent to $76.71. MasterCard declined 1.5 percent to $270.

     Senator Richard Durbin of Illinois, the No. 2 Democrat in the chamber, led the opposition to the delay amendment, which was defeated in a 54-45 vote. The measure needed 60 votes for approval. The central bank now has until July 21 to implement the final rule on capping the fees, which accounted for more than $16 billion in 2009, according to the Fed.

     In December, the Fed proposed capping the swipe fees, or interchange, at 12 cents a transaction, replacing a formula that averages 1.14 percent of the purchase price.

     Ciena tumbled 16 percent to $20.29. The maker of network gear for the biggest U.S. phone companies reported second- quarter adjusted loss of 24 cents a share. On average, the analysts surveyed by Bloomberg estimated a loss of 11 cents. JDS Uniphase Corp. fell 5.5 percent to $17.40.

     Gap retreated 2.4 percent to $17.49. Barclays cut its recommendation for the largest U.S. apparel chain to “equal weight” from “overweight,” citing risks to sales improvement.

     A gauge of raw material stocks in the S&P 500 sank 1 percent, the most within 10 groups, amid concern about slower demand for metals. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, dropped 1.9 percent to $48.82. Alcoa Inc. decreased 1.8 percent to $15.41.

     Energy shares gained the most among 10 S&P 500 industry groups as crude oil rose. Secretary General Abdalla el-Badri of the Organization of Petroleum Exporting Countries said ministers were unable to reach a decision on production quotas at their meeting in Vienna today and will maintain their current output.

     Exxon Mobil Corp. added 1 percent to $80.76 for the third- biggest gain in the Dow. The world’s largest energy company by market value discovered the equivalent of 700 million barrels of oil in three deep-water Gulf of Mexico wells.

     Cabot Oil & Gas Corp. climbed 4.3 percent, the most in the S&P 500, to $58.31. The Houston-based natural gas producer was boosted to “buy” from “hold” at Canaccord Genuity, which cited “significantly higher” expected output at Marcellus Shale fields.               

     U.S. stocks whose earnings are most correlated to economic growth may decline more than other industries as a gauge of the shares nears its 200-day moving average, according to top-ranked UBS AG technical analysts.

     The Morgan Stanley Cyclical Index of 30 stocks, including Alcoa Inc. and Ford Motor Co., may fall 3 percent to 980 if it breaches major support levels at 1,024 and 1,010, according to a report from UBS analysts Michael Riesner and Marc Muller yesterday. The gauge closed at 1,035.20 yesterday.

     “From a cyclical standpoint, the month of June should be weak for risk assets,” Riesner and Muller wrote in the report.

“On a short-term basis, the U.S. market looks oversold and could bounce later this week, but given the poor picture in technical indicators and the increasing technical damage in key sectors, new lows in financials and cyclicals/energy complex sitting on key support, we are sticking to our cautious market stance.”

Have a wonderful evening everyone.

Be magnificent!

A child must be brought up to understand the word no.  He should be taught yes first of all,

then, yes and no, then no and yes, in such a way that he gradually comes to realize, that there is really only no.

A child’s education is learning to understand no, and this enables him to grow.

Growing up means accepting the concept of no.

-Swami Prajnanpad,1891-1974

As ever,

Carolann

Maturity is only a short break in adolescence.

                         -Jules Feiffer, 1929-

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends, another beautiful day has come and gone…here are the numbers for the day!

To be overcome by the fragrance of flowers
is a delectable form of defeat
. . . Beverly Nichols

Photos of the day

A giant Vesak Day display featuring a seated Buddha during the annual Buddhist festival in Colombo, Sri Lanka.

 

Buddhist followers light candles at the Borobudur temple during Vesak Day. Buddhists in Indonesia celebrate Vesak at the monument anually, which makes it the most visited tourist attraction in Indonesia. It is observed during the full moon in May or June. (Ulet Ifansasti/Getty Images)

Canada

By Matt Walcoff and Nikolaj Gammeltoft

June 7 (Bloomberg) — Canadian stocks fell for a sixth day as Research In Motion Ltd. retreated after an analyst downgrade and gold stocks slipped as concern over the European debt crisis lessened. BlackBerry maker Research In Motion declined 3.2 percent after Morgan Keegan & Co. reduced its rating on the shares to “market perform” from “outperform.” Kinross Gold Corp., Canada’s third-largest gold producer, declined 1.4 percent as the metal retreated from a five-week high. Sino-Forest Corp., a forest-products producer with operations in China, sank 34 percent after short seller Carson Block said he will release new research on the company.  

The Standard & Poor’s/TSX Composite Index fell 35.74 points, or 0.3 percent, to 13,282.92 at 4 p.m. in Toronto after rising as much as 0.6 percent. The Canadian benchmark index fell in the last hour of trading as U.S. Federal Reserve Chairman Ben S. Bernanke, speaking in Atlanta, gave no hint of a new round of stimulus even as economic growth remains slow. “We’re all holding our breath here and hoping the worst is over,” said Barry Schwartz, a money manager at Baskin Financial Services Inc. in Toronto, which oversees C$400 million ($411 million). “Any way you slice it, the stock market is cheap, so it’s hard for me to imagine stocks are going to go lower.”  

The S&P/TSX has dropped 4 percent in the last six days of trading, erasing its gains for the year, as the U.S. reported an increase in unemployment and crude futures slipped. Energy companies make up 27 percent of Canadian stocks by market value, according to Bloomberg data.

 Precious Metals  

Precious-metals producers fell after European Central Bank President Jean-Claude Trichet indicated he endorsed measures to encourage investors to buy new Greek debt.  

Kinross declined 1.4 percent to C$15.07. Eldorado Gold Corp., which mines in China and Turkey, dropped for a seventh day, the longest streak since 2006, losing 2.3 percent to C$14.16.   

B2Gold Corp., which explores in Latin America, surged 9.1 percent to C$3.61 after reporting drilling results from Uruguay that it called “positive.” The shares touched an intraday record of C$3.67. Sino-Forest declined 34 percent to a four-year low of C$4.05 after Block, the founder of Muddy Waters Research, said he will release more research on the company “pretty soon.” The new research will concern Sino-Forest’s accounting, its majority stake in Greenheart Group Ltd. and its 2010 purchase of Homix Ltd, Block said on a conference call.                        

Sino-Forest

Shares of the Hong Kong- and Mississauga, Ontario-based company have plunged 78 percent since June 1, the day before Block asserted the company overstated its land holdings and production. The company has denied doing so and has hired accounting firm PricewaterhouseCoopers LLP to conduct its own investigation.  

Directory publisher Yellow Media Inc. slumped 4.5 percent to C$3.43 after closing at a record low yesterday. The shares have tumbled 30 percent since May 17, when San Francisco banned the unsolicited distribution of phone books. Research In Motion declined 3.2 percent to C$36.92 after Tavis McCourt, an analyst at Morgan Keegan & Co., reduced his rating on the shares to “market perform” from “outperform.” In a note to clients, McCourt said Apple Inc.’s new iMessage program threatens the popularity of RIM’s BlackBerry Messenger program. 

Saputo Inc. slumped 1.3 percent to C$46.50. Canada’s largest food producer reported fourth-quarter of 55 Canadian cents a share, missing the average of six analyst estimates in a Bloomberg survey by 1.8 percent.

US

By Michael P. Regan and Inyoung Hwang

June 7 (Bloomberg) — U.S. stocks fell for a fifth day, the longest drop for the Standard & Poor’s 500 Index in 11 months, and Treasuries erased losses as Federal Reserve Chairman Ben S. Bernanke gave no sign he is planning new stimulus efforts to bolster the weakening economy.    

The Standard & Poor’s 500 Index slipped 0.1 percent to 1,284.94 at 4 p.m. in New York, its lowest closing level since March 18. The 10-year U.S. Treasury yield decreased less than one basis point to 2.99 percent after rising as much as six points earlier, and two-year yields fell to their 2011 low. The euro climbed 0.8 percent to $1.4688, the strongest since May 5, as the European Central Bank signaled it may back Greek debt rollovers. Oil climbed on speculation increase in OPEC production quotas will reduce spare capacity.  

The S&P 500 erased a rally of as much as 0.8 percent, turning lower in the final 10 minutes of trading, as Bernanke said in a speech in Atlanta that the economic recovery remains “uneven” and “frustratingly slow.” While the Fed chief said the central bank should maintain record monetary stimulus, he gave no indication he was planning a third round of asset purchases known as quantitative easing, nicknamed “QE3” by investors.

“Bernanke had a bearish outlook on the state of the economy,” said Kevin Shacknofsky, who helps manage $7 billion in Purchase, New York, for Alpine Mutual Funds. “There may have been some expectation for him mentioning that QE3 was on the table. But the key issues were his comments on the poor momentum of the U.S. economy and job growth as well as the risks that any fiscal austerity measures could damage a fragile economy.”                                           

Slowing Growth

The S&P 500 is down 5.8 percent from an almost three-year high at the end of April as signs of a slowing economy spurred concern analyst estimates for 20 percent earnings growth this year are too optimistic. The slide has left the index trading at 12.2 times estimated profits of its companies, the cheapest forward valuation since last summer. Figures last week showed that payrolls grew at the slowest pace in eight months, the jobless rate unexpectedly rose to 9.1 percent and a private gauge of manufacturing expanded at the slowest pace in more than a year. “The economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed,” Bernanke, 57, said today in a speech to a conference in Atlanta. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”                                                      

Leading Declines

Cisco Systems Inc., Bank of America Corp. and Hewlett- Packard Co. lost at least 1 percent to lead declines in the Dow Jones Industrial Average, which reversed a gain of as much as 89 points to close down 19.15 points, or 0.2 percent, at 12,070.81.Intel Corp. rose 1.1 percent after Citigroup Inc. said that a potential foundry relationship may be forming with Apple Inc. International Paper Co. made a $3.31 billion hostile bid for Temple-Inland Inc., sending the target’s shares up 40 percent. International Paper, the world’s largest pulp-and-paper maker, advanced 0.4 percent.

Treasury two-year yields dropped two basis points to 0.41 percent. Yields on three-year notes dropped for a third day, slipping three basis points to 0.69 percent, after the U.S.government’s $32 billion auction of the debt drew the highest demand from a group including foreign central banks in five months. Longer-term debt yields were little changed before the $21 billion sale of 10-year notes tomorrow and the $13 billion 30-year bond offering June 9.                                                         

Euro Gains  

The euro advanced 0.8 percent against the yen and appreciated versus 12 of its 16 most-traded peers. The dollar weakened against 11 of 16 major counterparts.

The ECB isn’t opposed to private-sector creditors being asked to “maintain their level of outstanding credit,” ECB President Jean-Claude Trichet said in Montreal yesterday, the first sign he endorsed measures to encourage investors to buy new Greek debt to replace maturing securities. German Chancellor Angela Merkel told U.S. President Barack Obama yesterday that the 17-nation euro region will overcome its debt crisis.

Most European stocks declined, with the benchmark Stoxx Europe 600 Index falling 0.1 percent to near a 10-week low, as losses in retail shares offset gains in utility companies. Tesco Plc and Home Retail Group Plc fell as a report showed U.K. retail sales declined last month. Utilities posted the best performance among 19 industry groups in the Stoxx 600, gaining 1.2 percent. Mitchells & Butlers Plc surged 3.8 percent after a report that a group of investors may bid for the pub and restaurant owner.                                                   

Oil Erases Drop                         

Oil erased declines in the final 90 seconds of trading, rising 8 cents to $99.09 a barrel. The S&P GSCI Index gained 0.7 percent as sugar, brent crude and lean hogs climbed more than 2 percent to lead gains in 17 of 24 commodities tracked by the index, while cotton and wheat lost at least 1.3 percent for the biggest declines. The MSCI Emerging Markets Index gained 0.3 percent, after earlier falling more than 0.5 percent. Benchmark gauges in Russia and Turkey advanced more than 1 percent.South Korea’s Kospi index dropped 0.7 percent and the won weakened against most major peers as the nation’s financial markets traded for the first time since a June 3 report showed slower-than-expected growth in U.S. payrolls. Thailand’s SET Index lost 1.1 percent after Goldman Sachs Group Inc. lowered its rating on the country’s stocks. The Australian dollar slipped against 10 of its major counterparts after policy makers kept the nation’s benchmark interest rate unchanged for a sixth consecutive meeting and said current settings were appropriate.

A painter paints pictures on canvas.  But musicians paint their pictures on silence.  ~Leopold Stokowski

Be Magnificent!

As ever~

Summer for Carolann

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Today is the anniversary of the D-Day Invasion.

The D-Day operation of June 6, 1944 brought together the land, air and sea forces of the allied armies in what became known as the largest invasion force in human history.  The operation, given the codename OVERLORD, delivered five naval assault divisions to the beaches of Normandy, France.  The beaches were given the codenames UTAH, OMAHA, GOLD, JUNO and SWORD. A great invasion force stood off the Normandy coast of France as dawn broke on 6 June 1944: 9 battleships, 23 cruisers, 104 destroyers, and 71 large landing craft of various descriptions as well as troop transports, and mine sweepers, the largest armada ever assembled. The naval bombardment that began at 0550 that morning detonated large minefields along the shoreline.

The invasion force included 7,000 ships and landing craft manned by over 195,000 naval personnel from eight allied countries.  Almost 133,000 troops from England, Canada and the United States landed on D-Day.  Casualties from the three countries during the landing numbered 10,300.  By June 30th, over 850,000 men, 148,000 vehicles, and 570,000 tons of supplies had landed on the Normandy shores.  On May 7, 1945, German General Alfred Jodl signed an unconditional surrender at Reims, France.

Army troops on board a LCT, ready to ride across the English Channel to France. Some of these

We visited the beaches of Normandy a couple of years ago and the spiritual energy of those who gave their lives is still palpable

photos of the day

June 6, 2011

WWII veteran Arnold Whittaker of the 3rd Army, 5th Infantry Division, 10 Infantry Regiment company K, of Atlanta, Georgia, visits the US military cemetery in Colleville sur Mer, western France, on the 67th Anniversary of D Day, marking 67 years since Allied forces landed on a swath of beaches in Nazi-occupied France. The June, 6, 1944, invasion and ensuing battle for Normandy helped change the course of the war.

Vincent Michel/AP

Three-month-old female cheetah cubs live at the Nairobi Orphanage in Nairobi, Kenya. The two cubs were abandoned by their mother and were brought to the orphanage when they were one-month old.

Sayyid Azim/AP

Canada

By Matt Walcoff

     June 6 (Bloomberg) — Canadian stocks declined for a fifth day, erasing their 2011 gain, as energy stocks fell on lower crude-oil prices and financial companies dropped after the country reported a 21 percent plunge in building permits.

     Suncor Energy Inc., Canada’s largest oil and gas producer, lost 2.2 percent as crude dropped. Bank of Nova Scotia, the country’s third-biggest lender by assets, slipped 1.2 percent after Statistics Canada said building permits sank the most in five years in April. Sino-Forest Corp., the forestry company accused of manipulating financial data by a short seller, gained 16 percent after tumbling 71 percent in the previous two sessions.

     The Standard & Poor’s/TSX Composite Index decreased 199.25 points, or 1.5 percent, to 13,318.66. Twenty-four of 248 stocks advanced, the fewest since March 10.

     “There’s no doubt the economic news lately not only in the U.S. but in many other parts of the world has not been so good,” said Stephen Gauthier, a money manager at Fin-XO Securities in Montreal, which oversees about C$600 million ($613 million). “Everybody’s a little bit nervous about what we’ll see in the next six months.”

     The S&P/TSX fell 2 percent last week, trimming its 2011 gain to 0.6 percent, as the U.S. unemployment rate climbed to the highest since December. The U.S. accounted for 75 percent of Canadian exports last year, according to Statistics Canada. The index’s five-day slide is the longest since Jan. 10.

     Trading of put options to sell the iShares MSCI Canada Index Fund climbed to a four-month high of 1,550 contracts today, 14 times the four-week average.

     Crude futures declined 1.2 percent to a two-week low in New York as traders speculated slower economic growth will limit demand.

     Suncor dropped 2.2 percent to C$38.75. Penn West Petroleum Ltd., a western Canadian oil and gas producer, lost 3.8 percent to C$23.87. Enbridge Inc., Canada’s largest pipeline company, slipped 2.1 percent to C$30.98.

     Oilfield-services company Trinidad Drilling Ltd. decreased 8.5 percent to C$8.74. Shares of the Calgary-based company have sunk 20 percent since May 31, when it reported first-quarter earnings that missed the average analyst estimate.

     The S&P/TSX Financials Index slumped to a four-month low after building permits fell more than all 13 economists in a Bloomberg survey had forecast. Scotiabank dropped 1.2 percent to C$57.77. Toronto-Dominion Bank, Canada’s second-largest lender by assets, lost 1.8 percent to C$80.21. Manulife Financial Corp., North America’s fourth-largest insurer, declined 1.7 percent to C$16.16.

     Sino-Forest, which operates in China, rose 16 percent, the most since 2008, to C$6.10 in Toronto Stock Exchange trading after publishing documents on its website that it says support its reported land ownership. On June 5, Carson Block, the founder of Hong Kong-based Muddy Waters Research, said the company’s disclosures of timber holdings do not match city records.

     Sino-Forest shares remain down 66 percent since June 1.

     Companies with operations in Peru retreated after Ollanta Humala claimed victory in the country’s presidential election.

Humala has called for greater state control over natural resources.

     Pan American Silver Corp. tumbled 4.9 percent to C$30.22.

Rio Alto Mining Ltd. slumped 14 percent, the most since January 2010, to C$2.05.

     Teck Resources Ltd., which owns an interest in a copper and zinc mine in Peru, fell 3.6 percent to C$47.71. Teck, Canada’s largest base-metals and coal producer, extended its losses after Claudia Onetto, a company spokeswoman, said heavy rains have forced the closure of a copper mine in Chile.

     The S&P/TSX Consumer Discretionary Index retreated to an eight-month low. Tim Hortons Inc., Canada’s largest fast-food chain, fell for a fifth day, the longest streak since October, dropping 2.6 percent to C$43.31.

     Directory publisher Yellow Media Inc. decreased 6 percent to a record-low C$3.59 after Aravinda Galappatthige, an analyst at Canaccord Financial Inc., said shares may fall further as revenue from print products slides.

US

By Rita Nazareth

     June 6 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index trading around the lowest valuation level this year, as a decline in financial stocks overshadowed gains in technology companies.

     Wells Fargo & Co., the largest U.S. home lender, slumped 2.1 percent after Rochdale Securities LLC’s Richard Bove cut his recommendation for the stock. Apple Inc. rose 0.7 percent as Chief Executive Officer Steve Jobs may announce in an annual developers conference today a new way to access digital songs and information on smartphones and computers. Freeport-McMoRan Copper & Gold Inc. added 0.7 percent as Goldman Sachs Group Inc. reiterated its “buy” recommendation for the largest publicly traded copper producer.

     The S&P 500 fell 0.1 percent to 1,298.48 at 9:33 a.m. today. The benchmark gauge for American equities is trading at about 12.4 times its companies’ estimated operating earnings, the cheapest valuation since September, according to data compiled by Bloomberg. The Dow Jones Industrial Average slid 6.81 points, or 0.1 percent, to 12,144.45 today.

     U.S. stocks fell for five straight weeks, the longest slump for the Dow since 2004, as slower-than-estimated growth in jobs fueled concern that earnings forecasts are too optimistic. Labor Department figures last week showed that payrolls grew at the slowest pace in eight months and the U.S. jobless rate unexpectedly climbed to 9.1 percent in May. A separate report showed that manufacturing expanded at the slowest pace in more than a year.

     Wells Fargo slumped 2.1 percent to $26.31. Rochdale’s Bove cut his recommendation to “sell” from “neutral,” citing poor economic environment, weak housing prices, slowing manufacturing indicators and negative regulatory environment.

     Apple added 0.7 percent to $345.74. CEO Jobs, on medical leave since Jan. 17, will make his second public appearance of 2011 at Apple’s conference in San Francisco. He will preview software updates for Apple’s iPhone, iPad and Mac, as well the new iCloud online storage service, which may help those devices wirelessly share the same materials.

     The five-week drop in U.S. stocks has driven technology company valuations to the lowest level in more than a decade, making them too cheap to pass up for some of the nation’s biggest money managers.                     

     The largest group in the benchmark gauge for American equities lost 7 percent, or about $190 billion in value, since the market peaked on Feb. 18, falling more than any industry outside financials. Computer stocks trade for 9.3 times reported earnings before interest, taxes, depreciation and amortization, 1.3 times the index’s multiple, data compiled by Bloomberg show.

The ratio is the smallest since at least 1998.

     While signs of a slowing recovery and the initial public offering of LinkedIn Corp. have spurred concern the industry has entered a speculative bubble, the numbers show something different. Profits will rise 35 percent faster than the Standard & Poor’s 500 Index in 2011, and executives are boosting computer and software spending, data from Bank of America Corp. and Bloomberg show.

     “We see the best supply-demand trend in technology,” said Michael Sansoterra, a money manager at RidgeWorth Capital Management in Atlanta, which oversees $48.5 billion including Broadcom Corp. and Google Inc. shares. “You can measure it pretty much every way you want and it looks attractive.”

     Freeport-McMoRan gained 0.7 percent to $50.30. Goldman Sachs reiterated its “buy” recommendation for the largest publicly traded copper producer, saying that the company should benefit from higher copper prices amid strong demand.

Have a wonderful day everyone.

Be magnificent!

Most parents unfortunately think they are responsible for their children and their sense of responsibility takes the form of telling them what they should do, what they should not do, what they should become and what they should not become.

The parents want their children to have a secure position in society.  What they call responsibility is part of that respectability they worship; and it seems to me that where there is respectability there is no order.

Do you call that care and love?

-Krishnamurti, 1895-1986

As ever,

Carolann

The truth does not change according

to our ability to stomach it.

    -Flannery O’Connor, 1925-1964 

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Will this be your year?

The roster for the 2011 Atlantic hurricane season, released by the U.S. National Hurricane Center, is:  Arlene, Bret, Cindy, Don, Emily, Franklin, Gert, Harvey, Irene, Jose, Katia, Lee, Maria, Sean, Tammy, Vince and Whitney.

                                                                           -from TheGlobe & Mail, 6/3/11

 photos of the day

June 3, 2011

The Popocatepetl volcano spews a cloud of ash and steam high into the air as seen from Puebla, 62 miles east of Mexico City.

Reuters

Rafael Nadal of Spain reacts after winning his semi-final match against Andy Murray of Britain at the French Open tennis tournament at the Roland Garros stadium in Paris.

Benoit Tessier/Reuters

Market Commentary:

Canada

By Matt Walcoff

     June 3 (Bloomberg) — Canadian stocks fell for a fourth day, extending a weekly decline, as Sino-Forest Corp. tumbled after a short seller accused the company of falsifying its financial data.

     Sino-Forest, a forestry company with operations in China, sank 64 percent after Carson C. Block of Muddy Waters LLC said the company overstated timberland holdings and production, an allegation it denied. BlackBerry maker Research In Motion Ltd. fell 3.4 percent after analysts at UBS AG cut their share-price estimate. Caterpillar dealer Toromont Industries Ltd. rose 7.1 percent after spinning off its Enerflex Ltd. unit.

     The Standard & Poor’s/TSX Composite Index slipped 1.59 points, or less than 0.1 percent, to 13,517.91.

     “Where there’s smoke, there’s fire,” Murray Leith, who helps oversee about C$7.5 billion ($7.7 billion) at Odlum Brown Ltd. in Vancouver, said of Sino-Forest’s slide. Leith said he has no first-hand knowledge of the company’s finances. “The market is telling you there’s some substance to the accusations, and people are heading for the hills.”

     For the week, the index fell 2 percent as reports indicated slowing U.S. employment and manufacturing growth. The S&P/TSX Financials Index dropped 2 percent, the most since November.

Canadian Prime Minister Stephen Harper outlined a program today for his freshly seated parliamentary majority to rein in spending, diversify trade and attract more foreign capital to protect the country from a faltering U.S. recovery.

     “Because 75 percent of our trade goes to the U.S., if the U.S. consumer is not buying stuff, we’re toast,” said Paul Ma, who manages about C$500 million as a money manager at McLean & Partners in Calgary.

     Sino Forest tumbled a record 64 percent to C$5.23 after falling 21 percent yesterday. In a statement today, the company called Block’s allegations “inaccurate and unfounded” and said it will establish a committee of independent directors to examine them.

     Other companies with links to China also dropped. Precious- metals producer China Gold International Resources Corp. declined 4.5 percent to C$4.27, the lowest since September. Neo Material Technologies Inc., which makes rare-earths and zirconium products in China, Thailand and North America, plunged 9.4 percent to C$8.60.

     RIM lost 3.4 percent to a four-year low of C$38.15 after Amitabh Passi and Phillip Huang, analysts at UBS, cut their price estimate on its U.S.-traded shares to $45 from $60.

     In a note to clients, the analysts cited a lack of clarity about when new phones would debut, inroads made by Apple Inc.’s iPhone and devices based on Google Inc.’s Android software in corporations, and an overconcentration of responsibility with co-chief executive officers Mike Lazaridis and Jim Balsillie.

     Also today, ComScore Inc. said RIM fell to third place in share of the U.S. smartphone market behind Apple. Android devices are the most-used in the U.S., the market-research firm said.

     Energy and financial stocks rose after the Institute for Supply Management’s index of U.S. non-manufacturing businesses increased more than most economists in a Bloomberg survey had forecast.

     Toronto-Dominion Bank, Canada’s second-largest lender by assets, gained 1.2 percent to C$81.69. Suncor Energy Inc., the country’s biggest oil and gas producer, advanced 1.2 percent to C$39.60. Cenovus Energy Inc., Canada’s fifth-largest energy company, increased 2.4 percent to C$34.96.                      

     Laurentian Bank of Canada, the country’s seventh-largest lender by assets, slumped 5.4 percent, the most in two years, to C$46.88 after retreating 4.1 percent yesterday. The bank reported second-quarter earnings that missed the average analyst estimate by 4.8 percent, excluding certain items, yesterday.

     Sumit Malhotra, an analyst at Macquarie Group Inc., and Kevin R. Choquette, an analyst at Bank of Nova Scotia, cut their ratings on the shares today.

     Toromont Industries Ltd. jumped 7.1 percent, the most since 2008, to C$20.21 after spinning off Enerflex, which makes products for energy producers. Enerflex climbed 5.4 percent from its opening price today to C$12.65.

US

By Rita Nazareth

     June 3 (Bloomberg) — U.S. stocks extended a fifth straight weekly drop, the longest slump for the Dow Jones Industrial Average since 2004, as slower-than-estimated growth in jobs fueled concern that earnings forecasts are too optimistic.

     Alcoa Inc. and DuPont Co. each retreated 1.7 percent, pacing losses among companies most-tied to economic growth. The Dow Jones Transportation Average, which is considered a proxy for the economy, declined 1.7 percent. Monster Worldwide Inc., the largest online-recruiting company, tumbled 5.7 percent after payrolls grew at the slowest pace in eight months and the U.S. jobless rate unexpectedly climbed to 9.1 percent in May.

     The Standard & Poor’s 500 Index retreated 1 percent to 1,300.16 at 4 p.m. in New York, the lowest since March 23. The benchmark gauge for American equities had its longest weekly slump since July 2008, falling 4.7 percent since April 29. The Dow fell 97.29 points, or 0.8 percent, to 12,151.26 today.

     “It’s a highly worrisome jobs report that should jolt policy makers into realizing the U.S. faces an employment crisis,” said Mohamed El-Erian, chief executive officer at Pacific Investment Management Co., which runs the world’s biggest bond fund. “The details indicate that the stimulus- driven cyclical recovery has done little to overcome what is an increasingly structural unemployment problem. The economy is in a soft patch that places pressures on equity prices.”

     The S&P 500 slumped 3.4 percent over the last three days also as a report showed weaker-than-forecast employment growth in ADP Employer Services’ and as manufacturing expanded at the slowest pace in more than a year. Still, the index is up 3.4 percent this year amid government stimulus measures and higher- than-estimated corporate earnings.

     Employers added a less-than-projected 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier.

     “The jobs report is the last nail in the coffin,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., which oversees $3.65 trillion as the world’s largest asset manager.

“It confirms that the economy is dramatically slowing. It tells me that the Fed will be in no rush to tighten monetary policy.

This to me is a rational correction in stocks. You probably need to see some moderation in earnings estimates.”

     Michael Shaoul, whose Marketfield Fund Ltd. beat 81 percent of competitors last year with investments in transportation and retail companies, said private-sector hiring has risen by an average 145,000 a month over the last year, faster than economists had predicted. He noted that smaller gains in nonfarm payrolls reported in February and July 2004 failed to derail the last bull market, which peaked in October 2007.

     “What the data will do, however, is accelerate the process of economic revision, with estimates of U.S. growth being forced significantly lower across the board,” Shaoul wrote in a note to clients. “As damaging as the process may be for asset values, it has surprisingly little to do with the actual ability of corporations to generate revenue.”

     UBS AG strategists led by Chief Economist Larry Hatheway reduced their stance on global equities to “underweight,”saying the worldwide economy “is clearly enduring a soft patch.”

     Data on the economy is trailing forecasts by the widest margin since the bull market began in March 2009, according to the Citigroup Economic Surprise Index for the U.S. At the same time, stock analysts have been boosting forecasts for S&P 500 profit growth. Companies in the index are forecast to earn $105.31 a share over the next 12 months, compared with $96.92 at the beginning of January, data compiled by Bloomberg show.

     Based on those estimates, the S&P 500 is trading at a price-earnings ratio of 12.3, compared with an average forward multiple of 14.7 since 2006, the data show. Profit forecasts have beaten analyst estimates for nine straight quarters. The index is priced at 1.3 times reported sales, down from a 32- month high of 1.4 in February, and 2.2 times book value, according to data compiled by Bloomberg.

     “The only saving grace for the stock market in that environment is that P/E multiples are not very challenging relative to history,” said Jim McDonald, chief investment strategist at Northern Trust Corp. in Chicago, which manages $662 billion. Stocks are not expensive. That’s something that helps mitigate the downside.’’

     Companies most-tied to economic growth slumped. The Morgan Stanley Cyclical Index fell 1.6 percent as 28 of its 30 stocks retreated. Alcoa dropped 1.7 percent to $15.92. DuPont declined 1.7 percent to $50.29. FedEx Corp. slumped 1.5 percent to $90.15.

     Monster Worldwide, the largest online-recruiting company, tumbled 5.7 percent to $13.58, the lowest level since October.

The stock also had the third-biggest decline in the S&P 500.

     Newell Rubbermaid Inc. tumbled 12 percent to $14.97. The maker of Rubbermaid containers cut its profit forecast amid slower consumer spending. More than two-third of Newell’s sales come from the U.S., where persistent joblessness and surging prices for food and gas have forced shoppers to watch their wallets.

     The benchmark index for U.S. stock options and the S&P 500 fell, breaking their pattern of moving in opposite directions, as lower-than-estimated job growth failed to spur traders to pay more for insurance against equity losses. The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell 0.8 percent to 17.95. The index measures the cost of using options as protection against declines in the S&P 500.

Have a wonderful weekend everyone.

Be magnificent!

If this individuality is wiped away, the creative joy that crystallized it disappears, even if no material was lost, even if no atom was destroyed.

And if it is lost, it is also a loss for the entire world.  It is particularly precious because it is not universal.

-Rabindranath Tagore,1861-1901

As ever,

Carolann

Train yourself to let go of the things

you fear to lose.

                     -George Lucas, 1944-

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

ANNIVERSARY today: June 2, 1953 The Coronation of Queen Elizabeth II.  Louis St. Laurent attended and footage was flown across the Atlantic by RAF jets so that Canadians could see it the same day.  A lot has changed in the world of communication in the intervening 58 years.

In his diary, A Mingled Measure, James Lees-Milne describes the coronation:

The weather was damnable.  It rained all day.  The moment the procession started it positively poured, and the troops were soaked.  Yet the procession was magnificent.  The colour and pageantry cannot be described.  Uniforms superb and resplendent.  The most popular figure Queen Salote of Tonga, a vast, brown, smiling bundle with a tall red knitting needle in her hat:  knitting needle having begun as a plume of feathers.  Despite the rain she refused to have the hood of her open carriage drawn, and people were delighted.  They roared applause.  Extraordinary how the public will take someone to its bosom, especially someone not very exalted who is putting up a good show.  All along the route they adored her.  Beside her squatted a little man in black and a top hat – her husband.  Noël Coward, when asked who he was, said, ‘Her dinner.’

56

photos of the day

June 2, 2011

A trader works on the floor at the New York Stock Exchange in New York.

Seth Wenig/AP

A visitor poses with artist James Hugonin’s ‘Binary Rhythm (I)’ at the press view of the Summer Exhibition 2011 at the Royal Academy of Arts in London.

Luke MacGregor /Reuters

Market Commentary:

Canada

By Matt Walcoff

     June 2 (Bloomberg) — Canadian stocks fell for a third day, led by raw-materials producers, as gold and silver dropped after the euro gained, eroding demand for precious metals as a haven.

     Barrick Gold Corp., the world’s largest producer of the metal, declined 2.2 percent as gold lost 0.7 percent. Sino- Forest Corp., a forestry company with operations in China, plunged 21 percent after a short seller said it overstated timberland holdings and production. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, rose 1.5 percent as corn and wheat gained.

     The Standard & Poor’s/TSX Composite Index slipped 8.38 points, or 0.1 percent, to 13,519.50.

     “People have been going to gold not for investment purposes but more as a currency,” said Robert “Hap” Sneddon, president of Oakville, Ontario, money manager CastleMoore Inc. and vice president of the Canadian Society of Technical Analysts. “You get the euro strengthening a little bit, and it’s probably going to come at the expense of gold.”

     The S&P/TSX slumped 2 percent yesterday, the most since August, after private reports indicated slowing employment and manufacturing growth in the U.S. Seventy-five percent of Canadian exports went to the U.S. last year, according to Statistics Canada.

     An index of S&P/TSX gold stocks fell the most in three weeks as demand for a safe haven weakened. The metal advanced 8.6 percent this year through yesterday as investors speculated European countries will have difficulty managing their debt crisis.                      

     Barrick dropped 2.2 percent to C$45.06. Goldcorp Inc., the world’s second-largest gold producer by market value, declined 1.2 percent to C$47.58. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, lost 2.1 percent to C$34.36 as silver sank 4 percent.

     Sino-Forest tumbled 21 percent, the most since 1995, to C$14.46 before being halted. Carson C. Block, a Hong Kong-based analyst who has bet against Sino-Forest shares, said in a report that the amount of land the company reported buying from Lincang City in Yunnan province doesn’t match city records.

     Dave Horsley, chief financial officer at Sino-Forest, didn’t immediately return calls to his mobile phone and the company’s Mississauga, Ontario office. No one immediately replied to voicemail messages left at Sino-Forest’s Hong Kong and Mississauga offices.                      

     Fertilizer producers climbed as wheat futures rose on speculation Russian exports won’t be enough to help meet higher global demand and corn gained. Potash Corp. increased 1.5 percent to C$54.19. Agrium Inc., Canada’s second-largset fertilizer producer, advanced 1.8 percent to C$84.81.

     Oilfield-services company Trinidad Drilling Ltd. plunged 5.3 percent to C$9.74 a day after sinking 6 percent. Yesterday, the company reported earnings that missed the average analyst estimate by 7.2 percent, excluding certain items. At least three analysts cut their ratings on the shares today.

     Transat A.T. Inc., the owner of airline Air Transat, slumped 7.9 percent to C$11.78 after Claude Proulx, an analyst at Bank of Montreal, reduced his rating on the shares to “market perform” from “outperform.” In a note to clients, Proulx wrote that second-quarter earnings may decline in the second half of the fiscal year due to excess capacity and competition from Air Canada.

     Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, rallied 4.1 percent to C$51.29 as company executives met with potential investors in New York.

US

By Rita Nazareth

     June 2 (Bloomberg) — U.S. stocks retreated, a day after the biggest slump for the Standard & Poor’s 500 Index since August, as investors awaited the Labor Department’s monthly report on employment in the world’s largest economy.

     Limited Brands Inc. and Gap Inc. paced losses among chain stores, falling at least 2.1 percent. Goldman Sachs Group Inc. retreated 1.3 percent after two people familiar with the matter said it received a subpoena from the Manhattan District Attorney regarding the bank’s activity leading into the credit crisis.

Joy Global Inc. gained 5.4 percent, spurring a rally in industrial companies, after the mining-equipment maker reported profit that beat analysts’ estimates.

     The S&P 500 fell 0.1 percent to 1,312.94 at 4 p.m. in New York. It slumped 2.3 percent yesterday, the most since August, after data showing slower-than-forecast job growth spurred concern that tomorrow’s Labor Department report will trail estimates. The Dow Jones Industrial Average dropped 41.59 points, or 0.3 percent, to 12,248.55 today.

     “Nobody is going to jump in with strong conviction before the jobs report,” said Peter Jankovskis, who helps manage about $2.7 billion at Oakbrook Investments in Lisle, Illinois. “We’ve been experiencing fairly weak economic figures. Investors need more evidence that this is a temporary slowdown.”

     The S&P 500 tumbled to a six-week low yesterday following ADP Employer Services’ jobs report and separate data from the Institute for Supply Management that showed manufacturing expanded at the slowest pace in more than a year. Citigroup Inc.’s U.S. Economic Surprise Index, which tracks the rate at which data are beating or missing estimates, turned negative in May and has since fallen to the lowest level since January 2009.                       

     Stocks fell today as data showed the economic recovery is slowing. Orders placed with U.S. factories fell in April by the most in nearly a year as demand for aircraft waned and Japan’s earthquake restrained auto-related supplies. A separate report showed that more Americans than forecast filed applications for unemployment benefits last week, signaling the job market is weakening as employers trim staff to cut costs.

     “There are so many worries that hit the screen that investors don’t know where to focus on first,” said Bruce McCain, who oversees $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “There’s sluggish growth, the European crisis, fiscal issues, high commodity prices. It’s not like we’ll suddenly go over the edge and into an abyss. Still, those are uncertain times. That is reflected in global markets.”

     Moody’s Investors Service said that if there is no progress on increasing the statutory debt limit in coming weeks, it expects to place the U.S. government’s rating under review for possible downgrade, due to the very small but rising risk of a short-lived default. Moody’s said if the debt limit is raised and default avoided, the Aaa rating will be maintained. Lack of an agreement could prompt Moody’s to change its outlook to negative on the Aaa rating.

     Limited Brands, Gap and other U.S. retailers reported May sales that trailed analysts’ projections as increasing prices and surging gasoline costs deterred budget-conscious shoppers.

Limited, operator of the Victoria’s Secret chain, posted a gain of 6 percent in same-store sales, missing the 7.4 percent average of analysts’ estimates compiled by Retail Metrics Inc.

Sales at Gap, the largest U.S. apparel chain, fell 4 percent, more than five times the rate analysts projected.

     Surging costs for cotton, oil and labor in Asia have forced some apparel chains to pass costs on to consumers, with several saying hikes will accelerate this year. Some shoppers are scrimping on trips to stores because they can’t keep up with the price of fuel.

     Limited Brands slumped 2.2 percent to $37.87. Gap dropped 4.1 percent to $18.12.

     Goldman Sachs Group Inc. slid 1.3 percent to $134.38. The fifth-biggest U.S. bank by assets received a subpoena from the Manhattan District Attorney’s office seeking information related to a Senate subcommittee report on Wall Street’s role in the housing market collapse, according to two people familiar with the matter.

     Joy Global gained 5.4 percent to $90.51. The mining- equipment maker reported second-quarter profit of $1.52 a share.

Analysts surveyed by Bloomberg had estimated earnings of $1.35 a share on average.

     For-profit colleges rallied as the U.S. Education Department gave the industry more time to comply with rules that will cut off federal aid to institutions whose students struggle the most to repay their government loans.

     Corinthian Colleges Inc. gained 27 percent to $5.06. Apollo Group Inc. advanced 11 percent to $46.90.

     More than $578 billion has been erased from U.S. equity markets since the S&P 500 peaked at 1,363.61 on April 29, pushing the index’s valuation to 13.3 times estimated profit for 2011 from 13.8 times. The drop is creating a buying opportunity for investors willing to withstand declines that may reach 10 percent, according to Blackstone Group LP’s Byron Wien. Wien, who estimates earnings for companies in the gauge will climb about 12 percent in 2011, says shares will prove a bargain and the index will rally.

     “Investors should be looking for buying opportunities,” said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world’s largest private-equity firm. “The economy is not as bad as it looks right now. Corporate profits will be good, very good.

People are asking me, ‘Do you still think the market can get to 1,500 by the end of the year?’ I do.”

Have a wonderful evening everyone.

Be magnificent!

Man lives in confusion and fear until he discovers the uniformity of the law in nature; until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason, which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Life is not always a matter of holding

good cards, but sometimes of playing

a poor hand well.

     -Robert Louis Stevenson, 1850-1894

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

It’s The Glorious First of June:  So named because on June 1, 1794, the Channel Fleet under Lord Howe gained a decisive victory over the French under Admiral Villaret de Joyeuse.  Off Ushant, six  French ships were captured and one sunk, but the convoy of corn ships, which they were escorting, got through Brest.

June is probably named after the Roman gens or clan name Junius, related to juvenis, meaning young.  However, some sources take the name from Juno.  In Roman mythology, Juno is the “venerable ox-eyed” wife and sister of Jupiter, and Queen of Heaven.  She is identified with the Greek Hera, who was the special protectress of marriage and of women and was represented as a war-goddess.

photos of the day

June 1, 2011

In this late Tuesday, May 31, 2011 photo, opera singers walk to the stage for a rehearsal of Verdi’s opera, ‘Aida’ near by the historical site at Masada, Israel.

Oded Balilty/AP

Space Shuttle Endeavour (STS-134) makes its final landing at the Shuttle Landing Facility (SLF) at Kennedy Space Center in Cape Canaveral, Florida. Endeavour touched down at its Florida home base capping a 16-day mission to deliver a premier science experiment to the International Space Station on NASA’s next-to-last shuttle flight.

Bill Ingalls/NASA

Market Commentary:

Canada

By Matt Walcoff

     June 1 (Bloomberg) — Canadian stocks fell the most in nine months, led by financial and energy companies, after private reports showed growth in U.S. employment and manufacturing slowed last month.

     Canadian Imperial Bank of Commerce, the country’s fifth- largest lender by assets, dropped 3.5 percent after an analyst at Royal Bank of Canada cut his rating on the shares. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, lost 4 percent as oil futures retreated. BlackBerry maker Research In Motion Ltd. declined 5.1 percent after UBS AG named it a “least-preferred” stock.

     The Standard & Poor’s/TSX Composite Index decreased 275 points, or 2 percent, to 13,527.88 after the Institute for Supply Management’s index of U.S. manufacturing dropped to its lowest level since September 2009. The May figure trailed 82 of 83 economists’ forecasts in a Bloomberg survey.

     “This is a further confirmation of a slowing down of the economy,” said Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, which oversees C$1.6 billion ($1.6 billion). “The statistics are coming down below estimates, therefore the market reacts negatively.”

     The index yesterday completed its third-straight monthly loss, the longest streak since February 2009. Indexes of S&P/TSX energy and materials stocks slumped 4.5 percent and 5.9 percent, respectively, in May as crude futures sank 9.9 percent and silver plunged 21 percent while the U.S. dollar climbed for the first time since November. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

     ADP Employer Services said today that U.S. employers added 38,000 jobs last month, missing the median estimate 175,000 in a Bloomberg survey of economists.

     Also today, Moody’s Investors Service cut its credit rating on Greek bonds to Caa1 from B1, and JPMorgan Chase & Co. reduced its forecast for U.S. second-quarter economic growth to an annualized rate of 2 percent from 2.5 percent.

     An index of S&P/TSX financial stocks declined the most since August. Toronto-Dominion Bank, Canada’s second-largest lender by assets, fell 3.2 percent, the most in a year, to C$80.81. Royal Bank, its bigger rival, decreased 2.9 percent to C$54.98. Manulife Financial Corp., North America’s fourth- largest insurer, slid 4.8 percent to C$16.44.

     CIBC retreated 3.5 percent to C$77.54 after Andre-Philippe Hardy, an analyst at Royal Bank, cut his rating to “sector perform” from “outperform.” The lender has the most to lose among Canadian banks from a slowdown in domestic consumer lending, Hardy wrote in a note to clients.

     The S&P/TSX Energy Index fell for the first time in six days as crude oil dropped the most in three weeks and natural gas futures declined.                        

     Encana Corp., Canada’s largest nautral gas producer, lost 2.6 percent to C$32.15. Cenovus Energy Inc., the country’s fifth-biggest energy company, declined for the first time in eight days, decreasing 4.4 percent to C$34.21. Canadian Natural retreated 4 percent to C$40.48.

     Corridor Resources Inc., which explores for oil and gas in eastern Canada, plunged 25 percent to an 18-month low of C$3.18 after saying Apache Corp. has pulled out of a shale-gas joint venture in New Brunswick.

     Oilfield services company Trinidad Drilling Ltd. fell 6 percent, the most in nine months, to C$10.29 after reporting profit and sales that missed analyst estimates.

     Base-metal and coal producers dropped as copper declined.

Teck Resources Ltd., Canada’s largest company in the industry, lost 3.7 percent to C$48.94. Northern Dynasty Minerals Ltd., Anglo American Plc’s partner in the Pebble project in Alaska, decreased 5.9 percent to C$11.55.

     Reitmans (Canada) Ltd., which owns the country’s biggest chain of women’s clothing stores, tumbled 7.2 percent, the most in 25 months, to C$16.47 after reporting first-quarter profit of 1 Canadian cent a share, excluding certain items. Two analysts had estimated earnings of 23 Canadian cents a share and 24 Canadian cents a share, respectively.

     RIM, Canada’s largest technology company, slumped 5.1 percent to C$39.23 after closing at a four-year low yesterday.

In a note to clients, Amitabh Passi, an analyst at UBS, said increasing competition in the smartphone market may reduce profit margins.

     Intact Financial Corp., Canada’s biggest property and casualty insurer, soared 9.7 percent to more than a four-year high of C$54.62 after agreeing to buy Axa SA’s Canadian unit for

C$2.6 billion. The purchase will increase Intact’s premiums by C$2 billion to more than C$6.5 billion, the company said in a statement.

     Sino-Forest Corp., a forestry company with operations in China, dropped 5.5 percent to C$18.21 after a purchasing managers’ index for the country showed manufacturing grew at the slowest pace in nine months in May.

US

By Stephen Kirkland and Rita Nazareth

     June 1 (Bloomberg) — Stocks sank, dragging the Standard & Poor’s 500 Index to its worst loss since August, and Treasuries rallied as slower growth in jobs and manufacturing fueled concern the economy is faltering. The Dollar Index erased losses, and commodities fell.

     The S&P 500 plunged 2.3 percent, the Stoxx Europe 600 Index slid 1 percent and Brazil’s Bovespa retreated 1.9 percent as of 4:15 p.m. in New York. Ten-year Treasury note yields dropped below 3 percent for the first time since December and the Dollar Index rose 0.3 percent after sinking 0.4 percent earlier. The Swiss franc snapped a two-day drop against the euro. The S&P GSCI Index of commodities tumbled 1.5 percent.

     U.S. equities halted their longest streak of gains in a month after companies added 38,000 workers to payrolls in May, according to figures from ADP Employer Services, less than one- quarter of the median growth forecast by economists. Stocks extended losses after the Institute for Supply Management’s factory index showed U.S. manufacturing expanded at the slowest pace since September 2009.

     “It’s going to be pretty rocky,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “The bond market is in full-on pessimistic mode. We still think that this ultimately will be only a soft spot. The question is how long? It will be risk-off until this soft spot is confirmed.”

     Financial firms, industrial companies and raw-material producers fell at least 3 percent to lead declines in all 10 industry groups in the S&P 500. Caterpillar Inc., Alcoa Inc. and Bank of America Corp. fell 4.3 percent or more for the biggest losses in the Dow Jones Industrial Average. The Russell 2000 Index of small U.S. companies slumped 3.2 percent, the most since August, while the Dow Jones Transportation Average retreated 3.4 percent.

     The ISM’s factory index fell to 53.5 in May from 60.4 the prior month. Economists projected the gauge would drop to 57.1, according to the median forecast in a Bloomberg News survey.

Estimates of the 83 economists polled ranged from 53 to 60.

     The S&P 500 has fallen 3.6 percent from an almost three- year high at the end of April, and Treasuries have rallied, as economic data trailed economists’ estimates and investors prepared for the Federal Reserve to complete its $600 billion bond-purchase program by the end of this month. Citigroup Inc.’s U.S. Economic Surprise Index, which tracks the rate at which data is beating or missing estimates, turned negative in May and has since fallen to the lowest level since January 2009.

     Labor Department data on June 3 will probably show a projected 180,000 gain in payrolls following a 244,000 April increase, according to a Bloomberg survey.

     The recent lower-than-forecast economic data has caused some investors to speculate that the Fed will plan a third round of so-called quantitative easing after its latest program of bond purchases, known on Wall Street as “QE2,” is completed this month.

     “We do not want to see QE3,” Brian Belski, Oppenheimer & Co.’s New York-based chief investment strategist, said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “QE3 is a short-term event, which will cause the market to go higher because investors over the last 10 years have become so reliant on cheap money and low interest rates. We think that only prolongs the inevitable when the Fed has to eventually sell these securities that they have been buying.”

     The dollar beat stocks, bonds and commodities for the best performance in May. The Dollar Index climbed 2.3 percent in the month, while the MSCI All-Country World Index of equities fell 2.5 percent, the S&P GSCI Index of commodities sank almost 7 percent in the month and bonds of all types returned 1.1 percent on average.

     Crude oil slid 2.4 percent, the most in three weeks, to $100.29 a barrel in New York. All but four of the 24 commodities tracked by the S&P GSCI Index retreated. Silver, coffee, sugar and wheat lost at least 2.9 percent for the biggest declines.

     The Stoxx 600 retreated for the second day this week. Banca Monte dei Paschi SpA sank 7.6 percent, as the Italian lender’s controlling shareholder sold 450 million shares on behalf of Fondazione Monte dei Paschi di Siena, a term sheet for the deal showed.

     The difference in yield between Greek 10-year bonds and benchmark German bunds increased 15 basis points to 13.17 percent. Greece’s next aid package may include incentives for bondholders to keep lending without triggering a downgrade that would roil Europe’s banking system, two people with knowledge of the talks said. So-called negative incentives are also under consideration, such as cutting off old Greek bonds from eligibility for use as collateral with the European Central Bank, the people said.

     The franc strengthened against all 16 of its major counterparts, gaining 1.7 percent versus the euro, after retail sales rose in April at the fastest rate for two years, boosting speculation the Swiss National Bank will increase borrowing costs. Britain’s pound weakened against 10 of its 16 major peers after a manufacturing index fell to a 20-month low and U.K. mortgage approvals dropped to the least in four months.

     The MSCI Emerging Markets Index fell 0.3 percent, breaking a four-day winning streak. Taiwan’s Taiex Index climbed 0.6 percent. The Bombay Stock Exchange Sensitive Index rose 0.6 percent after Morgan Stanley predicted it will rebound 19 percent this year. Thailand’s SET Index slid 0.8 percent before the central bank raised its benchmark one-day bond repurchase rate for the fourth time this year.

Have a wonderful evening everyone.

Be magnificent!

The main purpose of life is to live rightly, think rightly, act rightly.

The soul must languish when we give all our thought to the body.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

LAST WORDS:

I wish I had drunk more champagne.

        -John Maynard Keynes, 1883-1946              

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends, 

BIRTHDAY: Walt Whitman, May 31

Walt Whitman, age 37, frontispiece to Leaves of Grass, Fulton St., Brooklyn, N.Y., steel engraving by Samuel Hollyer from a lost daguerreotype by Gabriel Harrison.

SONG OF MYSELF

I celebrate myself, and sing myself,

And what I assume you shall assume,

For every atom belonging to me as good belongs to you.

I loafe and invite my soul.

I lean and loafe at my ease observing a spear of summer grass…

                      -Walt Whitman from Song of Myself in Leaves of Grass

June 1^st tomorrow so summer is not far away.

A new Facebook app is coming out that will remind users exactly what they were doing a year ago from that day. Nine times out of 10, the answer will be: “Wasting your time on Facebook.”

                                                                                                     – Conan O’Brien

photos of the day

May 31, 2011

Cows graze as dark clouds appear over a chapel near Murnau, southern Germany, on Tuesday.

Matthias Schrader/AP

A guide looks in from the entrance of a hall for a Louis Vuitton Voyages exhibition at the National Museum of China in Beijing. Luxury goods makers may boast familiarity with China, but the pace of change in the world’s fastest-growing country still startles them. The world’s biggest luxury market within five years has become a second home for brands that tap Chinese appetite for fast super sports cars, 10,000-euro ($14,060) handbags and diamonds.

Jason Lee/Reuters

A Great Pied Hornbill chick, about 40 days old, is displayed at the Jurong Bird Park on Tuesday in Singapore. This is one of two chicks hatched successfully through artificial incubation and are notoriously difficult species to breed in captivity. Artificial incubation was necessary as the breeding pair of Great Pied Hornbills had cannibalized the chicks the previous year.

Wong Maye-E/AP

Canada

By Inyoung Hwang

     May 31 (Bloomberg) — Canadian stocks fell, completing a third-straight monthly decline, as Research in Motion Ltd. sank to its lowest price in more than four years and an index of U.S. consumer confidence dropped unexpectedly to a six-month low.

     Research in Motion Ltd., maker of the BlackBerry smartphone, erased 4.4 percent after rival Nokia Oyj cut sales forecasts. Royal Bank of Canada lost 0.8 percent as Keefe, Bruyette & Woods Inc. lowered its earnings estimate. Goldcorp Inc., the second-biggest producer of the metal, declined 1.2 percent as gold futures retreated.

     The Standard & Poor’s/TSX Composite Index dropped 26.78 points, or 0.2 percent, to 13,802.88 at 4 p.m. in Toronto, after rising as much as 0.5 percent earlier. Global stocks rallied today amid speculation European officials will pledge additional aid for Greece by the end of June.

     “The market was happy about the news overnight that there was some optimism on the European debt crisis, but then we got hit with some bad economic news out of the U.S.,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which oversees C$1.7 billion ($1.8 billion). “The biggest news was the consumer confidence number, which was lower than before. The main challenge there is there are more and more people saying jobs are harder to come by.”

     The S&P/TSX fell 1 percent this month, its first three- month series of declines since February 2009.

Telecommunications, consumer-staple and utility stocks have led gains in the past month, while materials stocks were the one of worst performing groups out of 10 in the gauge as prices of raw materials such as oil, gold and silver slumped.                       

     Confidence among U.S. consumers declined in May as Americans’ outlook for business conditions and the labor market soured. The Conference Board’s index dropped to 60.8 from a revised 66 reading in April, figures from the New York-based private research group showed today.

     The median forecast of economists surveyed by Bloomberg News called for a rise to 66.6. Other data today showed a drop in home prices and weakening manufacturing.

     Research in Motion fell 4.4 percent to C$41.35, the lowest price since October 2006. Nokia Oyj cut its forecasts for its devices and services unit on lower prices and competition from Google Inc. and Apple Inc. Nokia said second-quarter sales at the devices and services division will be “substantially” less than its projected range, raising concern Research in Motion is also losing market share.                        

     “When you have a major cellphone maker cutting forecasts, that’s not good for RIM either,” Xu said. “It’s pretty clear that Apple has taken the high-end market and it’s really hard to challenge that, so the low-end market is going to be an ugly dog fight.”

     The Washington Post reported yesterday that the federal government is allowing more of its workers to use products by Apple Inc. such as the iPhone and iPad instead of the BlackBerry and laptops. The Waterloo, Ontario-based company has plunged 23 percent since April 28 when it cut its profit forecasts on lower-than-expected demand for its smartphones.

     Royal Bank of Canada, the country’s biggest lender, slumped 0.8 percent to C$56.62 after KBW analyst Brian Klock lowered his profit forecast, citing volatility in the Fixed Income Clearing Corp. business. Klock rates Royal Bank of Canada “market- perform.”

     Goldcorp fell 1.2 percent to C$48.46 as gold slipped 50 cents to $1,536.80 an ounce in New York. Barrick Gold Corp., the biggest producer, fell 0.1 percent to C$46.39, its first decline in nine days.

     North American Palladium Ltd. rallied 8.7 percent to C$4.02, the most since April 20. The precious-metals producer with operations in Ontario received a “sector outperform” rating from Leily Omoumi, an analyst at Scotiabank.

US

By Rita Nazareth

     May 31 (Bloomberg) — U.S. stocks advanced, trimming the biggest monthly drop since August for the Standard & Poor’s 500 Index, amid speculation about additional aid for Greece.

     Apple Inc. rallied 3.1 percent after saying Chief Executive Officer Steve Jobs will introduce a cloud-computing product and new software next week. Intel Corp. gained 1.4 percent as the world’s largest chipmaker seeks to challenge tablet makers with a new type of thinner laptop called an “ultrabook.” General Dynamics Corp. climbed 4.2 percent after receiving a $744 million contract from the U.S. Navy.

     The S&P 500 rose 1.1 percent to 1,345.20 at 4 p.m. in New York, for its fourth consecutive day of gains. The index declined 1.4 percent in May. The Dow Jones Industrial Average added 128.21 points, or 1 percent, to 12,569.79 today. Equities advanced even as data on consumer confidence and business activity trailed economists’ estimates.

     “There’s a roadmap to getting Greece through its crisis,” said Madelynn Matlock, who helps oversee $14.8 billion at Huntington Asset Advisors in Cincinnati. “That’s why investors are reacting positively. In the U.S., we got some softening in economic data. That doesn’t tell me we’re going to have a QE3.

It tells me that monetary policy is going to be easy for a while. That should provide room for stocks to move higher.”

     The benchmark gauge fell from an almost three-year high on April 29 on concern about Europe’s debt crisis. Still, the gauge rose 7 percent this year amid higher-than-forecast corporate profits and government stimulus measures. The Federal Reserve plans to complete its second round of asset purchases, known as quantitative easing, or QE2, in June, while holding interest rates “exceptionally low” for an “extended period.”         

     Benchmark indexes had a four-week drop, the longest losing streak in more than 15 months. Over the last 100 years, the Dow has returned an average 0.4 percent gain in June, according to data compiled by Bespoke Investment Group. The gauge has fallen 0.6 percent and 1.2 percent in June, respectively, over the last 50 years and 20 years, the data showed.

     Global stocks rallied as Jean-Claude Juncker, head of the group of euro-area finance ministers, said European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of its debt.

     Stocks gained even after the Institute for Supply Management-Chicago Inc. said its business barometer fell to 56.6 this month from 67.6 in April. Figures greater than 50 signal expansion. Economists forecast the gauge would fall to 62, according to the median estimate in a Bloomberg News survey.

     Confidence among U.S. consumers unexpectedly declined in May to a six-month low as Americans’ outlook for business conditions and the labor market soured. Another report showed that home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

     “Economic data has been patchy,” Mike Ryan, the New York- based chief investment strategist for Wealth Management Americas at UBS Financial Services Inc., wrote in a note today. “The apparently much more mixed picture represents mostly a transitory headwind. It remains our view that equity markets will outperform over the balance of the year given a still solid earnings outlook, undemanding valuations and continued accommodative policy conditions.”

     The longest stretch of declines on a weekly basis for the S&P 500 in a year has left valuations at the lowest level ever compared with speculative-grade debt.

     Earnings from the past 12 months for companies in the benchmark gauge for U.S. equities reached 6.64 percent of share prices this month, according to data compiled by Bloomberg. That compared with the 6.61 percent average yield on junk bonds, data from Barclays Plc show. It was the first time the spread, a way of comparing debt and equity values, has shown stocks with a higher yield, according to Bloomberg data going back to 1987.

     Technology shares led the gains in the S&P 500 among 10 industries, rising 1.6 percent.

     Apple rallied 3.1 percent to $347.83. CEO Jobs will make a public appearance June 6 to introduce a cloud-computing product and a new version of the operating system that powers its iPad and iPhone touch devices. Jobs, in the midst of his third medical leave since 2004 as he battles a rare form of cancer, will deliver a keynote address at Apple’s Worldwide Developers Conference, the Cupertino, California-based company said in a statement today.

     Intel gained 1.4 percent to $22.51. The world’s largest chipmaker is seeking to help the personal-computer industry fend off a challenge from Apple’s iPad and other tablets. Intel’s new machines will be less than an inch thick, have days of battery life on standby, start up in just seconds and retail for less than $1,000, according to Intel Executive Vice President Sean Maloney. Intel aims to convert 40 percent of consumer laptops to the new category by the end of 2012.

     General Dynamics advanced 4.2 percent to $74.22. The second-largest U.S. shipbuilder received a $744 million contract from the U.S. Navy to construct two mobile landing platform ships. The contract comes with an option for the construction of a third ship, which would increase its size to $1.3 billion.

     BlackRock Inc.’s Chief Executive Officer Laurence D. Fink said he’s more bullish on U.S. equities than bonds because companies are benefiting from the weak dollar and have surplus cash to invest for growth.

     “We love equities, we love dividend stocks,” Fink said in a Bloomberg Television interview today in Hong Kong. “You own Treasuries because you’re worried about the world and the future, but if you believe the world is a good place to invest for the long cycle, you have to be in equities.”

     Fink, one of the co-founders of BlackRock in 1988, built what is now the world’s biggest asset manager through acquisitions including the purchase in December 2009 of Barclays Global Investors. He said in a March 3 interview that he’s a “big buyer” of the U.S. dollar, doesn’t see a “bear market” in bonds and would buy Treasuries if yields rise above 4 percent.

Have a wonderful evening everyone.

Be magnificent!

Chitragupta, who is supposed to be writing out our deeds in an account book is no other than the conscious and unconscious parts of our mind.The Lord of Law, to whom we have to render the account, is the Soul within us.

-Gopal Singh, 1911-1963

As ever,

Carolann

The clock indicates the moment,

but what does eternity indicate?

     -Walt Whitman, 1819-1892

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Fairly quiet Monday with the US markets closed; I wonder every year why we can’t be in synch and have Victoria Day and Memorial Day fall on the same weekend.  

I read somewhere today that Memorial Day was originally observed as a holiday to commemorate soldiers who fell in the Civil War, 1861-1865, but now honors all those killed in war.  Such profound loss…

OK, this is reassuring to many of us with lots on our mind….life happens:  President Obama signed the guest book at Westminster Abbey last week – the year 2008:

A detailed view of the page written by US President Barack Obama, in Westminster Abbey’s Distinguished Visitor’s Book shows the incorrect date 24 May 2008. (Oli Scarff/Getty Images)

Market Commentary:

Canada

By Matt Walcoff

     May 30 (Bloomberg) — Canadian stocks rose for a fourth day as higher natural-gas prices drove up energy shares and raw- materials producers posted a sixth straight advance.

     Equinox Minerals Ltd., which mines copper in Africa, rallied 4.5 percent on the Toronto Stock Exchange after sinking 6.1 percent on May 27. Cameco Corp., the world’s largest uranium producer, lost 3.3 percent after German Chancellor Angela Merkel’s coalition endorsed a plan to close all atomic-power plants by 2022. Canadian Natural Resources Ltd., the nation’s second-largest energy producer by market value, gained 1.2 percent.

     The Standard & Poor’s/TSX Composite Index increased 32.07 points, or 0.2 percent, to 13,829.66. Equities also gained after Canada’s first-quarter economic growth accelerated to the fastest pace in a year.

     “A lot of the commodities and commodity-related stocks were in an oversold position,” said Timothy Lazaris, chief executive officer of Red Sky Capital Management Ltd. in Toronto, which oversees C$52 million ($53 million). “With $100 crude, it’s not that difficult to see why people would be interested in buying some large-cap energy stocks who have been underperforming.”

     The S&P/TSX rose 3.1 percent in the two weeks that ended May 27 for the biggest two-week gain since Feb. 4. Raw-materials stocks surged 7 percent and energy companies gained 4.1 percent as analysts at banks including Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. forecast a rebound in commodity prices and gold, copper, corn, wheat and natural gas advanced. The resources industry makes up 49 percent of Canadian stocks by market value, according to Bloomberg data.                          

     Canadian stocks rallied after the national economy grew at an annualized rate of 3.9 percent in the first quarter, Statistics Canada said today. Analysts had forecast a gross domestic product increase of 4 percent, according to the median of 28 estimates in a Bloomberg survey.

     Equinox, which Barrick Gold Corp. agreed to buy, advanced 4.5 percent to C$7.94 on the Toronto Stock Exchange. The shares plunged to C$7.60, from C$8.09 the prior day, on May 27 after Barrick said talks with the Zambian government on the takeover are continuing. The African country’s competition agency had said it conditionally approved the purchase.

     The companies should have “no cause for concern” over those conditions, Maxwell Mwale, Zambia’s mines minister, said in an interview in the capital of Lusaka.

     Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 1.1 percent to C$50.98 as copper climbed in Shanghai for a fourth day.                          

     Cameco lost 3.3 percent to C$27.36. Uranium One Inc., a mining company controlled by Moscow-based ARMZ Uranium Holding Co., slipped 2.6 percent to C$3.70. Merkel promised when re- elected in 2009 to extend the life of nuclear reactors. Her party finished behind the Green Party in a state election for the first time following Japan’s earthquake and tsunami in March that caused the worst nuclear crisis since 1986.

     Energy shares gained after natural gas climbed 1.1 percent, adding to last week’s 6.8 percent surge, amid forecasts for warmer U.S. weather. Canadian Natural rose 1.2 percent to C$42.09. Suncor Energy Inc., the country’s biggest energy company, gained 0.6 percent to C$40.99. Encana Corp., Canada’s largest natural gas producer, advanced 0.7 percent to C$33.43.

     Semafo Inc., which mines gold in Africa, climbed for an eighth day, soaring 4.8 percent to C$8.96 before the release of its first-quarter earnings.                        

     “We see a lot of room for further appreciation as the company continues to provide updates on its underground development program and regional exploration updates,” Stuart McDougall, an analyst at Jennings Capital Inc., said in a note to clients.

     S&P/TSX fertilizer producers climbed for a fifth day after 23 of 29 traders in a Bloomberg survey forecast corn prices will rise this week. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, increased 0.8 percent to C$55.13.

Agrium Inc. gained 1.4 percent to C$85.65.

     The S&P/TSX Utilities Index fell 1.1 percent, the most since April 7.

     Fortis Inc. declined 2.1 percent to C$32.97 after agreeing to buy Central Vermont Public Service Corp. for about $470 million, paying a 44 percent premium, to enter the U.S. regulated electricity market. Fortis, Canada’s largest publicly traded power producer, also said it will sell 9.1 million shares for C$33 each.                   

     Canadian Utilities Ltd., the owner of the Atco family of companies, lost 2.3 percent to C$58.

     Juan Plessis, an analyst at Canaccord Financial Inc., cut his rating on the shares to “hold” from “buy” in a note dated May 27. Plessis cited the stock’s 21 percent surge from March 14 to May 26.

     Directory publisher Yellow Media Inc. retreated for a sixth day, slumping 6.4 percent to a record-low C$3.83 after Adam Shine, an analyst at National Bank of Canada, cut his 12-month share-price estimate to C$4 from C$5.

     “The company will report what we expect will be another relatively soft quarter when it reports Q2 results in early August and concurrently updates 2011 guidance, which will reflect a third consecutive year of downward revisions,” Shine wrote in a note to clients.

Have a wonderful evening everyone.

Be magnificent!

The human voice can never reach the distance

that is covered by the still small voice of conscience.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Love all, trust a few. 

Do wrong to none.

  -Wm. Shakespeare, 1564-1616

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

I thought this was a fascinating piece in today’s Globe & Mail:

TIMELESS WAY TO LIVE

British scientists have discovered a remote tribe that has no concept of time or dates, reports The Daily Telegraph.  “The Amondawa people who live deep in the Amazonian rainforests of Brazil have no watches or calendars and live their lives to the patterns of day and night and rainy and dry seasons.  They also have no age – and mark the transition from childhood to adulthood to old age by changing their name.  the team of researchers, led by the University of Portsmouth, said that it is the first time they have been able to prove time is not a deeply entrenched universal human concept, as previously thought.  Prof. Chris Sinha said: ‘We can now say without doubt that there is at least one language and culture which does not have a concept of time as something that can be measured, counted or talked about in the abstract.  This doesn’t mean that the Amondawa are ‘people outside time,’ but they live in a world governed by events rather than the passing of time.’”

 photos of the day

May 27, 2011

 Pedestrians walk past the artwork Jellight of Pascal Petitjean and Aamer Taher from Singapore during the Vivid festival in central Sydney. Vivid Sydney, a festival of light, music and ideas, will run until June 13.

Daniel Munoz/Reuters

 The pack of riders pedal during the 130-mile 19th stage of the Giro d’Italia cycling race from Bergamo to Macugnaga.

Alessandro Garofalo/Reuters 

Canada

By Matt Walcoff

May 27 (Bloomberg) — Canadian stocks rose, extending a weekly gain, as a weaker U.S. dollar boosted metals futures.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, advanced 2.8 percent as copper climbed for a fourth day. Kinross Gold Corp., Canada’s third-largest gold producer, increased 5.1 percent as the U.S. dollar slipped after U.S. consumer spending and home sales lagged behind most economists’ forecasts. Royal Bank of Canada, the country’s biggest bank, fell 3.1 percent after its quarterly profit trailed the average analyst estimate by 8.4 percent, excluding certain items.

The Standard & Poor’s/TSX Composite Index rose 37.7 points, or 0.3 percent, to 13,813.60 at 2:29 a.m. in Toronto, for a 1.2 percent gain this week. “The housing numbers were terrible, therefore, people say there’s no way interest-rate increases are on the radar screen in the near future,” said Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, which oversees about C$1 billion ($1 billion). “That translates in the relationship between the weak dollar and higher commodity prices.”

The stock benchmark gained 3 percent from May 13 to yesterday and is set for its biggest two-week advance since Feb. 4. Raw-materials and energy companies climbed as analysts at banks including Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. said commodity prices are likely to rebound. Those industries make up 48 percent of Canadian stocks by market value.                    

The U.S. dollar retreated against all 16 other major currencies after the National Board of Realtors said pending home resales plunged 12 percent last month, more than 11 times the median drop forecast in a Bloomberg survey of economists.

Personal spending rose 0.4 percent in April, the Commerce Department said in Washington. Economists had forecast a gain of 0.5 percent, according to the median of 81 estimates in a Bloomberg survey.

Base-metal and coal producers rose as copper futures headed for a third-straight weekly gain as Shanghai copper inventories slid for a 10th week.

Teck advanced 2.8 percent to C$50.62. Sherritt International Corp., which mines coal, nickel and cobalt, surged

3.9 percent to C$7.03. Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, increased 3.7 percent to C$25.06.

Precious-metals companies climbed as the U.S. dollar retreated as much as 1.1 percent against the euro, the most since April 20.

Kinross rose 5.1 percent to C$15.78 for a ninth-straight gain, the longest streak since at least 1993. Semafo Inc., a gold producer scheduled to release quarterly earnings on May 30, jumped 5.5 percent to C$8.49. Great Basin Gold Ltd., which explores in the U.S. and South Africa, soared 9.2 percent to C$2.02.

Harry Winston Diamond Corp., the owner of the Diavik mine featured on the TV show “Ice Road Truckers,” advanced 6.3 percent to C$17.60, the highest since September 2008. Yesterday, Tiffany & Co., the world’s second-largest luxury jewelry retailer, boosted its 2011 earnings forecast.

Fertilizer producers climbed as corn rose for a third day after the China National Grain & Oils Information Center said the country may consume more corn than it produces in the year beginning Oct. 1.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 1.2 percent to C$54.70. Agrium Inc. advanced 2.4 percent to C$84.36.                       

Royal Bank, Canada’s largest company by market value, fell 3.1 percent to C$57.34 after saying earnings from investment banking declined. Yesterday, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce reported profit that lagged behind their average analyst estimates. Royal Bank’s slump in Toronto Stock Exchange trading is the biggest drop in five months.

Valeant Pharmaceuticals International Inc., Canada’s largest drugmaker, rose 2.5 percent to C$50.81, extending its weekly rally to 5.2 percent. In a note dated yesterday, Cosme Ordonez, an analyst at GMP Capital Inc., said the company’s pending 314-million-euro ($448 million) purchase of AB Sanitas “represents a strategic fit for Valeant expansion plans in Europe.”

 US

By Rita Nazareth

May 27 (Bloomberg) — U.S. stocks rose, trimming the longest weekly drop in more than 15 months, as comments from the Group of Eight about the global economy’s strength offset a slump in home sales that was 12 times faster than projected.

Freeport-McMoRan Copper & Gold Inc. advanced 2.7 percent as copper rallied after Standard Chartered Plc predicted price gains. Wells Fargo & Co. and Bank of America Corp. increased at least 1.5 percent, pacing a rally in financial shares, as European Central Bank governing council member Nout Wellink said he expects Greece to get International Monetary Fund aid next month. Marvell Technology Group Ltd. surged 11 percent after projecting higher sales than analysts estimated.

The Standard & Poor’s 500 Index advanced 0.4 percent to 1,331.10 at 4 p.m. in New York. The Dow Jones Industrial Average added 38.82 points, or 0.3 percent, to 12,441.58. Both gauges fell for a fourth straight week. Volume on U.S. exchanges was 19 percent lower than a week earlier at 5.47 billion shares before the Memorial Day holiday.

“The resilience of riskier assets is linked to the fact that we’re still going to have easy monetary policy,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $85 billion. “The Federal Reserve’s program of quantitative easing has helped bolster stock prices, but has not helped the housing market.”

The S&P 500 fell 2.4 percent from an almost three-year high on April 29 on concern about Europe’s debt crisis and weaker- than-forecast economic data. Still, the gauge rose 5.8 percent from the end of 2010 amid government stimulus measures and higher-than-forecast corporate profits.

Global stocks rose after the Group of Eight leaders said that a strengthening global economy will pave the way to cuts in the debt built up during the recession that followed the 2008 financial crisis. Europe vowed to fight its fiscal woes with “determination,” while President Barack Obama promised a “clear and credible” U.S. deficit-reduction strategy. Japan was allowed to put off savings measures until its economy rebounds from the March earthquake and tsunami.

“The global recovery is gaining strength and is becoming more self-sustained,” according to a statement after a two-day summit in Deauville, France. Without mapping out binding targets, the leaders pledged to “remain focused on the action required to enhance the sustainability of public finances.”

U.S. consumers grew more confident in May than a month earlier as declining gasoline prices helped lift Americans’ spirits.

The Thomson Reuters/University of Michigan final index of consumer sentiment increased to a three-month high of 74.3 from 69.8 in April. Economists forecast a reading of 72.4, the same as the preliminary figure issued earlier this month, according to the median estimate in a Bloomberg News survey.

“The world is healing economically,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees $358.2 billion. “I’m delighted to see the G-8 take a longer-term view of things, especially because some investors have been focused on the near term.”

U.S. stocks rose and a gauge of homebuilders in the S&P indexes rallied 1.9 percent even after a report showed that the number of Americans signing contracts to buy previously owned homes plunged more than forecast in April, a sign the industry that triggered the recession continues to struggle.

A gauge of raw-material producers had the biggest gain in the S&P 500 within 10 industries, rising 1 percent. Copper rose in New York as increased premiums signaled stronger demand in China and Standard Chartered Plc predicted price gains, joining banks including Goldman Sachs Group Inc. Freeport, the largest publicly traded copper producer, advanced 2.7 percent to $51.73.

Banks had the biggest gain in the S&P 500 within 24 industries, rallying 1.5 percent as a group. The KBW Bank Index added 1.4 percent as 21 of its 24 stocks gained.

Wells Fargo, the largest U.S. home lender, advanced 1.6 percent to $28.14. Bank of America rose the most in the Dow, rallying 2 percent to $11.69.

Marvell Technology surged 11 percent to $16.17. The maker of the processor that runs BlackBerry smartphones forecast second-quarter profit of 35 cents to 39 cents a share, excluding some items. Analysts projected 33 cents, according to the average of estimates compiled by Bloomberg.

Broadcom Corp. climbed 5.4 percent to $36.52. The maker of semiconductors for wireless headsets and television set-top boxes was added to FBR Capital Markets’ Top Picks list. The stock presented “an attractive and rare value opportunity” for investors, given the company’s growth potential, analyst Craig Berger wrote in a note.                         

Aflac Inc. fell 3.2 percent to $48. The world’s largest seller of supplemental health insurance was cut to “equal weight” from “overweight” at Morgan Stanley, which said the company may see a limit to its capital management opportunities.

Nouriel Roubini, the economist who predicted the global financial crisis, said stock markets are at the “tipping point” of a correction as economic growth may begin to slow.

Companies had ridden a worldwide recovery to boost sales and profits, supporting equity price increases, Roubini told a conference in Budapest today. Now, signs of a global economic slowdown may drag down stock prices, he said. “Until two weeks ago I’d say markets were shrugging off all these concerns, saying they don’t matter because they were believing the global economic recovery was on track,” Roubini said. “But I think right now we’re on the tipping point of a market correction. Data from the U.S., from Europe, from Japan, from China are suggesting an economic slowdown.”

 Have a wonderful weekend everyone.

 Be magnificent!

 True morality consists not in following

the well-beaten track,

but in finding out the true path for ourselves

and in fearlessly following it.

 -Mahatma Gandhi, 1869-1948

 As ever,

 Carolann

 My motto was always to keep swinging.

Whether I was in a slump or feeling

badly or having trouble off the field, the

only thing to do was keep swinging.

                   -Hank Aaron, 1934-

 

Dear Friends,

Considered one of the most beautiful poems ever written, worth remembering… 

SONNET 130 

My mistress’ eyes are nothing like the sun;
Coral is far more red than her lips’ red;
If snow be white, why then her breasts are dun;
If hairs be wires, black wires grow on her head.
I have seen roses damask’d, red and white,
But no such roses see I in her cheeks;
And in some perfumes is there more delight
Than in the breath that from my mistress reeks.
I love to hear her speak, yet well I know
That music hath a far more pleasing sound;
I grant I never saw a goddess go;
My mistress, when she walks, treads on the ground:
And yet, by heaven, I think my love as rare
As any she belied with false compare.

 -William Shakespeare, 1609

 photos of the day

May 26, 2011 

Fire boats spray water near the Statue of Liberty to kick off Fleet Week in New York. Fleet Week ends on Memorial Day with a military flyover honoring American military personnel who lost their lives in service.

Seth Wenig/AP

 A monkey drinks water from a tap on a hot summer afternoon in Jammu, India.

Channi Anand/AP 

Market Commentary: 

Canada

By Matt Walcoff

May 26 (Bloomberg) — Canadian stocks rose for a second day as oil producers gained as investors took advantage of historically low share prices relative to earnings in the industry.

Niko Resources Ltd., which produces energy in South Asia, rallied 5.9 percent on speculation fuel prices may increase in India. CIBC, Canada’s fifth-largest lender by assets, dropped 3.9 percent after its second-quarter profit trailed the average analyst estimate by 2.7 percent, excluding certain items. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, advanced 1.8 percent after the International Grains Council cut its 2011-12 wheat-production forecast.

The Standard & Poor’s/TSX Composite Index climbed 24.43 points, or 0.2 percent, to 13,775.90. “Oil stocks have corrected quite a bit over the last month, month and a half,” said Todd Johnson, a portfolio manager at BCV Asset Management in Winnipeg, Manitoba, which oversees C$300 million ($307 million). “It might be value players moving in and taking positions again.”

The S&P/TSX dropped 3.6 percent from April 5 to yesterday as an index of integrated oil producers declined 7.5 percent on lower crude prices. The industry index’s level relative to forecast earnings fell below that of the S&P/TSX this month for the first time since March 2010.                          

Oil producers and oilfield-services companies rallied today as crude futures rebounded after dipping below $100 a barrel in New York.“For those that believe in oil finding a bottom in the $100 range, you can make a case for owning companies with long- life reserves,” Johnson said.

Suncor Energy Inc., Canada’s largest oil and gas producer, rose 1.8 percent to C$41.10. Trican Well Service Ltd., the country’s biggest oilfield-services company, gained 4.6 percent to C$23.22.

Niko Resources jumped 5.9 percent,the most in 11 months, to C$77.85. India may increase diesel, kerosene and cooking oil prices this fiscal year to support state-run refiners, an Indian oil-ministry official said today. The official asked not to be identified because the decision is not yet public.     Alan Knowles, an analyst at Haywood Securities Inc. in Calgary, said in an e-mail that Niko’s move was probably related to India’s plans.

Potash Corp. advanced 1.8 percent in Toronto Stock Exchange trading to C$54.07 as wheat futures climbed 2.3 percent. The International Grains Council, based in London, reduced its production forecast by 0.7 percent from the one it issued last month, citing adverse weather in Europe and the U.S.                         

S&P/TSX banks declined the most in three weeks after Toronto-Dominion Bank and CIBC’s earnings lagged behind the average estimates of analysts in Bloomberg surveys.

CIBC lost 3.9 percent, the most in 10 months, to C$81.15 after missing analysts’ quarterly profit estimate by the most since 2009. TD, Canada’s second-largest lender by assets, decreased 1.5 percent to C$84.02 after its earnings trailed the average analyst estimate by 1.3 percent, excluding certain items. Royal Bank of Canada, the country’s biggest bank, slipped 1.1 percent to C$59.15.

Lundin sank 17 percent, the most in 28 months, to C$7.10 after abandoning efforts to sell the company because the bids it received were too low.

Inmet Mining Corp, the base-metals producer that agreed to buy Lundin in January, fell 3.9 percent to C$66.50. Lundin scrapped the Inmet deal to adopt a so-called poison pill defense against a rival, unsolicited bid from Equinox Minerals Ltd.                       

Neo Material Technologies Inc., which makes rare-earths and zirconium products, soared 12 percent to C$9.84. The shares have surged 14 percent since May 19, the day before Matt Gowing, an analyst at Mackie Research Capital Corp., said Neo Material may be acquired by a Chinese company.

Gildan Activewear Inc., Canada’s largest clothing-maker, rallied 4.2 percent to C$35.89 as North American apparel companies gained after Guess? Inc. forecast earnings higher than the average analyst estimate.

Yoga-wear retailer Lululemon Athletica Inc. tumbled 5.9 percent, the most since August, to C$89.82 after Liz Dunn, an analyst at FBR Capital Markets Corp., cut her rating on the shares to “underperform” from “market perform.” In a note to clients, Dunn wrote that the company’s margins may fall in the second half of the year.

 US

By Rita Nazareth

May 26 (Bloomberg) — U.S. stocks rose for a second day as higher-than-estimated corporate profits at companies including Tiffany & Co. overshadowed data showing the economy grew at a slower rate than forecast and jobless claims unexpectedly rose.

Tiffany, the world’s second-largest luxury jewelry retailer, advanced 8.6 percent after raising its full-year earnings forecast as profit beat estimates. NetApp Inc. rallied 6.9 percent as the data-management company forecast earnings that topped analysts’ projections. Walgreen Co. dropped 1 percent after Goldman Sachs Group Inc. cut the largest U.S. drugstore chain from its “conviction buy” list.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,325.72 at 4 p.m. in New York. The Dow Jones Industrial Average rose 8.17 points, or 0.1 percent, to 12,402.83. Both benchmark gauges yesterday snapped a three-day drop. “We’ve leveled off and softened somewhat,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $53 billion. “The bright side is that there’s a clear dichotomy between the health of corporate America and the economy. Profits remain good and there’s M&A activity. That tells me that we’re not going to see a huge move in stocks in either direction.”

 The S&P 500 fell 3.2 percent from an almost three-year high on April 29 through yesterday amid concern about Europe’s debt crisis and weaker-than-forecast economic data. Still, the benchmark gauge was up 5 percent from the end of 2010 through yesterday amid government stimulus measures and higher-than- forecast corporate profits.

 The U.S. economy grew at a 1.8 percent annual rate in the first quarter, less than forecast, reflecting a smaller gain in consumer spending than previously calculated. The revised rise in gross domestic product was the same as estimated last month and compared with a 3.1 percent gain in the prior quarter, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg News called for a 2.2 percent increase.

More Americans unexpectedly filed applications for unemployment benefits last week, a sign the labor market is struggling to gain momentum. Jobless claims increased by 10,000 to 424,000, Labor Department figures showed. The median estimate of economists was for a drop to 404,000.                          

Earlier today, stocks extended declines after Luxembourg’s Jean-Claude   Juncker, who leads the group of euro-area finance ministers, said the International Monetary Fund may not release its portion of a 12 billion-euro ($17 billion) aid payment to Greece next month.

There are specific IMF rules and one of those rules says that IMF can only take action when the refinancing guarantee is given over 12 months,” Juncker said today at a conference in Luxembourg. “I don’t think that the troika will come to the conclusion that this is given,” he said, using the term to describe a team of inspectors from the European Union, the IMF and European Central Bank.

 Have a wonderful evening.

 Be magnificent! 

My work will be finished if I succeed in carrying conviction to the human family, that every man or woman, however weak in body, is the guardian of his or her self-respect and liberty, and that this defence prevails, though the world be against the individual resister. 

-Mahatma Gandhi, 1869-1948 

As ever, 

Carolann 

Tolerance implies no lack of commitment

to one’s beliefs.  Rather it condemns the

oppression or persecution of others.

         -John F. Kennedy, 1917-1963