Category: Uncategorized

Dear Friends,

I read this poem in this week’s edition of The New Yorker:

THE FACEBOOK SONNET

Welcome to the endless high-school

Reunion. Welcome to past friends

And lovers, however kind or cruel.

Let’s undervalue and unmend

The present. Why can’t we pretend

Every stage of life is the same?

Let’s exhume, resume, and extend

Childhood. Let’s all play the games

That occupy the young. Let fame

And shame intertwine. Let one’s search

For God become public domain.

Let church.com become our church

Let’s sign up, sign in, and confess

Here at the altar of loneliness.

                     -Sherman Alexie

Facebook CEO Mark Zuckerberg arrives for a meeting at the Elysee Palace in Paris.John Schults/Reuters

US President Barack Obama is escorted to address both Houses of Parliament in London. Flanking Obama are Speaker of the House of Commons John Bercow (l.) and Speaker of the House of Lords Baroness Helene Hayman. Obama was the first US president to speak in Westminster Hall.

Kevin Lamarque/Reuters

Market Commentary:

Canada

By Matt Walcoff

     May 25 (Bloomberg) — Canadian stocks advanced to a three- week high, led by energy and raw-materials producers, as fuels and metals gained on analyst reports speculating that prices will rebound.

     Suncor Energy Inc., Canada’s largest oil and gas company, increased 2 percent after a drop in U.S. distillate-fuel inventories. Potash Corp. of Saskatchewan Inc., the world’s No.1 fertilizer producer, rose 2.6 percent as investors speculated wet weather will delay U.S. planting. Teck Resources Ltd., Canada’s biggest base-metal producer, climbed 2.5 percent after Deutsche Bank AG said copper will rise to an average of $11,500 a metric ton in 2012 from about $9,483 this year.

     The Standard & Poor’s/TSX Composite Index advanced 156.35 points, or 1.2 percent, to 13,751.47, the highest close since May 2. The index fell 0.4 percent yesterday, breaking a five-day streak of gains.

     “There’s not much going on in the bounce-back in commodities except the bullish reports from some saying they think they got oversold in recent weeks,” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.02 million) each for more than 250 families. “It’s just traders hoping to get back in some momentum in those sectors.”

     The Canadian stock benchmark fell 4.7 percent from April 5 to yesterday as commodities including oil, copper, corn and wheat dropped. Energy and raw-materials companies make up 48 percent of Canadian stocks by market value. Commodities have declined as economic data reflected a slowing global recovery, the European debt crisis intensified and investors speculated emerging-market countries may raise interest rates.

     Crude oil rose to a two-week high after the U.S. Energy Department said inventories of distillates, such as heating oil and diesel fuel, fell by 2.04 million barrels last week. The decline exceeded all 14 estimates in a Bloomberg survey of analysts.

     Suncor gained 2 percent to C$40.37. Talisman Energy Inc., an oil and gas producer with operations in North America, the North Sea and Indonesia, advanced 2.7 percent to C$20.35. Encana Corp., Canada’s biggest natural gas producer, increased 2.6 percent to C$33.34 as that fuel climbed.

     Cinch Energy Corp., which explores for oil and gas in western Canada, soared a record 39 percent to C$1.76 after agreeing to be bought by Tourmaline Oil Corp. in a deal Tourmaline valued at about C$205 million ($210 million).

Tourmaline fell 2.5 percent from a record close to C$28.27.

     Agricultural futures rose as storms in the central U.S. threatened to extend planting delays, boosting prices of corn and wheat. Potash prices will continue to rise in the second half of the year, Patricio de Solminihac, deputy general manager of Soc. Quimica y Minera de Chile SA, said in a conference call.

     Potash Corp. gained 2.6 percent to C$53.10. Agrium Inc., Canada’s second-largest fertilizer producer, advanced 3.5 percent, the most since December, to C$82.06.

     Copper climbed 2.3 percent after Deutsche Bank followed similar comments from Goldman Sachs Group Inc. and JPMorgan Chase & Co. in saying prices are likely to rebound.

     Inmet Mining Corp., which produces base metals in Europe, increased 2.8 percent to C$69.21. Northern Dynasty Minerals Ltd., Anglo American Plc’s partner in the Pebble project in Alaska, rallied 8 percent to C$12.19. Teck Resources rose 2.5 percent to C$48.40.                          

     Cameco Corp., the world’s largest uranium producer, climbed 4.1 percent to C$27.77 after Financial Times Deutschland said Germany may drop a five-month-old tax on nuclear fuel.

Government spokesman Steffen Seibert said no decision has been made on the tax.

     Gold gained for a fourth day, and silver surged 4.2 percent.

     Barrick Gold Corp., the world’s largest producer of the metal, advanced 1 percent to C$46.10. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company by market value, climbed for a sixth day, increasing 2.9 percent to C$35.83.

Harry Winston Diamond Corp., the owner of the Diavik mine featured on the TV show “Ice Road Truckers,” jumped 5.4 percent to C$16.75.

     The six largest S&P/TSX banks each rose after Bank of Montreal reported earnings that topped the average analyst estimate and Fitch said German banks’ potential losses from Greece are manageable.

     BMO, Canada’s fourth-largest bank, gained 0.9 percent to C$62.05 after topping the average of 14 analyst estimates by 2.4 percent, excluding certain items. Toronto-Dominion Bank, the country’s second-biggest lender by assets, advanced 1.8 percent to C$85.29 before releasing second-quarter financial results.

Sun Life Financial Inc., Canada’s third-biggest insurer, increased 0.8 percent to C$29.85.

     Westport Innovations Inc., which develops natural-gas engines, rallied 5.9 percent to C$24.76. The shares have soared 17 percent since May 16, the day before it said it will develop fuel-system technologies with Caterpillar Inc.

US

By Rita Nazareth

     May 25 (Bloomberg) — U.S. stocks advanced, with benchmark indexes snapping a three-day decline, as commodity shares rallied on expectations for higher raw material prices.

     Occidental Petroleum Corp. and Halliburton Co. gained at least 1.6 percent as oil climbed following a report showing that U.S. distillate fuel supplies dropped to a two-year low.

Freeport-McMoRan Copper & Gold Inc. advanced 2.4 percent as copper rose after Deutsche Bank AG said prices are likely to rebound. Fifth Third Bancorp and BB&T Corp. increased more than 1 percent after Fitch Ratings said it probably won’t downgrade German banks because of their holdings of Greek debt.

     The Standard & Poor’s 500 Index added 0.3 percent to 1,320.47 at 4 p.m. in New York. The Dow Jones Industrial Average rose 38.45 points, or 0.3 percent, to 12,394.66 today. Both benchmark gauges fell to one-month lows yesterday.

     “It’s a risk-on day,” 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. “On days when you get a little bit more conviction about the economic recovery, stocks and commodities move up. The risk-on day is also a manifestation of companies most-tied to the economy.”

     The S&P 500 has fallen 3.2 percent from an almost three- year high on April 29 on concern about Europe’s debt crisis and weaker-than-forecast economic data. Indexes of commodity producers slumped at least 5 percent during that period. Still, the benchmark gauge rose 5 percent since the end of 2010 on government stimulus measures and higher-than-forecast profits.

     Gauges of energy and raw material shares rose at least 1.3 percent today, the two biggest gains in the S&P 500 within 10 industries. The Thomson Reuters/Jefferies CRB Index of 19 raw materials rallied 1.6 percent. Oil rose above $101 a barrel in New York. Copper gained the most in a week as Deutsche Bank said prices are likely to rebound, following similar comments from Goldman Sachs Group Inc. and JPMorgan Chase & Co.

     Occidental Petroleum, the biggest onshore oil producer in the continental U.S., added 1.7 percent to $104.22. Halliburton rose 5 percent to $49.87 after Morgan Stanley raised its recommendation for the world’s second-largest oilfield services provider to “overweight” from “equal-weight.” Freeport, the largest publicly traded copper producer, gained 2.4 percent to $49.98.                      

     “The rally in stocks and commodities reflects the view that the global economic recovery is in place,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc. in Raleigh, North Carolina, which manages $4 billion. “There had been some concern about softness in recent data and that’s why we saw a pullback. Profits and margins should be sustained at these levels. The trend is higher and the rally will be driven by companies most-exposed to economic growth.”

     Financial companies helped pace a rebound in benchmark indexes as Fitch Ratings said German banks have “manageable” risks related to Greek sovereign debt and the Mediterranean country’s economy.

     “The worst consequence of any Greek sovereign default for German and other European banks would be a sharp increase in general capital market and creditor risk aversion at a time when many banks are still in rehabilitation mode,” Michael Dawson- Kropf, a Frankfurt-based analyst at Fitch, said in an e-mailed statement today.

     Fifth Third Bancorp, Ohio’s largest lender, added 1 percent to $12.61. BB&T rose 1.8 percent to $26.67.

     RF Micro Devices Inc. climbed 5.7 percent to $6.08. The U.S. maker of chips and radio systems for mobile phones was added to the focus list at Morgan Keegan.                    

     Take-Two Interactive Software Inc. rose 3.2 percent to $16.62. The producer of the “Grand Theft Auto” video games reported a fourth-quarter loss, excluding some items, that was 55 percent narrower than the average analyst estimate.

     Stock futures extended declines before the start of regular trading as a report showed that orders for durable goods dropped more than forecast in April, reflecting less demand for aircraft and disruptions in supplies of auto parts stemming from the earthquake in Japan.

     Bookings for goods meant to last at least three years fell 3.6 percent, the most since October, after a 4.4 percent jump in March, a Commerce Department report showed. Economists projected a 2.5 percent drop in April, according to the median forecast in a Bloomberg News survey. A measure of demand for business equipment declined by the most this year.

     Costco Wholesale Corp. lost 1.3 percent to $80.32. The largest U.S. warehouse-club chain reported fiscal third-quarter profit of 73 cents a share, missing the average analyst estimate by 4.8 percent.

     American International Group Inc. declined 4 percent to $28.28. The Treasury sold 200 million shares yesterday at $29 each, compared with the closing price of $29.46 on the New York Stock Exchange. The government, which retains a majority stake, needs to sell shares at an average of about $28.73 to recover a $47.5 billion investment. AIG disposed of 100 million shares, raising $2.9 billion, according to a statement from the company.

     AIG, once the world’s largest insurer, is seeking private capital after a government rescue that swelled to $182.3 billion, including Federal Reserve support. The Treasury in 2010 sold the last of its holdings in Citigroup Inc. and reduced its ownership in General Motors Co. to a minority stake. New York- based AIG is the only insurer that hasn’t repaid its bailout.

     First Solar Inc. slumped 2.6 percent to $120.62. Jim Chanos, the short seller known for predicting Enron Corp.’s collapse, said investors should bet against the biggest producer of thin-film solar panels and Vestas Wind Systems A/S, the largest wind-turbine manufacturer.

     Vestas “will be under financial strain and best avoided,” Chanos, the president and founder of Kynikos Associates LP, said today at the Ira Sohn Conference in New York. First Solar is “losing whatever edges they have not only because of technology but increasingly because of operational problems.”

Have a wonderful evening everyone.

Be magnificent!

Fearlessness is the first requirement of spirituality.

Cowards can never be moral.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

Life’s most urgent question is: what

are you doing for others?

-Martin Luther King Jr., 1929-1968

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

I never thought I’d be saying this but it’s Bob Dylan’s 70^th birthday today….

“When you feel in your gut what you are and then dynamically pursue it – don’t back down and don’t give up – then you’re going to mystify a lot of folks.”  -Bob Dylan

An exhibitor poses with clematis and delphiniums during press day at the Chelsea Flower Show 2011, in London.

Luke MacGregor/Reuters

A hand-written note to rescue workers is seen on a house that was damaged by a tornado that destroyed nearly 30 percent of Joplin, Mo., on Sunday afternoon. The twister cut a six-mile path through the city.

Adam Wisneski/AP

Canada

By Matt Walcoff

     May 24 (Bloomberg) — Canadian stocks fell for the first time in six days, led by financial companies, on speculation European countries are more likely to default on their debt.

     Manulife Financial Corp., North America’s fourth-largest insurer, decreased 2.9 percent a day after the Standard & Poor’s 500 index retreated the most in two months. Barrick Gold Corp., the world’s largest gold producer, advanced 2.8 percent as the metal climbed for a third day. Teck Resources Ltd., Canada’s biggest base-metals and coal producer, fell 3 percent after a gauge of Chinese manufacturing sank to a 10-month low.

     The Standard & Poor’s/TSX Composite Index fell 57.15 points, or 0.4 percent, to 13,595.12 after Christian Noyer, a member of the European Central Bank’s governing council, said a restructuring of Greece’s debt would be a “horror” story.

     “Yesterday, I couldn’t believe what was going on with Greece, the concern about it spreading to other countries,” said Irwin Michael, a money manager at ABC Group of Funds in Toronto, which oversees about C$1 billion ($1 billion). “People are quite concerned.”

     The S&P/TSX rallied the most in three months last week as stocks rebounded from their lowest prices relative to earnings in six months and copper, gold, corn and wheat advanced. The index had fallen the previous three weeks for the longest streak of weekly declines since January 2010.

     The S&P/TSX Financials Index fell the most in three weeks after Fitch Ratings cut its outlook on Belgium’s credit rating to negative and world equity markets dropped. Canada’s market was closed yesterday for the Victoria Day holiday. After markets closed on May 20, S&P said it may lower Italy’s debt rating.

     Manulife, the owner of Boston-based John Hancock Financial Services Inc., declined 2.9 percent to C$17.01. Bank of Montreal, Canada’s fourth-largest lender by assets, slipped 1.1 percent to C$61.50 before the release of its second-quarter financial results. Brookfield Asset Management Inc., Canada’s biggest real estate company, lost 2.6 percent to C$31.39.

     Base-metal producers retreated two days after HSBC Holdings Plc and Markit Economics said China’s preliminary manufacturing index, known as the Flash PMI, fell to 51.1 from 51.8 in April.

     Teck dropped 3 percent to C$47.24. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, declined 1.6 percent to C$130.78. Lundin Mining Inc., which produces base metals in Europe, slumped 4.3 percent to C$8.46.                      

     Sino-Forest Corp., a forest-products company with operations in China, sank 7.1 percent, the most since June, to C$18.88.

     Gold futures climbed to the highest since May 3, and silver rallied 3.5 percent in New York. The S&P/TSX Gold Index advanced for a seventh day, the longest streak since August.

     Barrick rose 2.8 percent to C$45.63. Goldcorp Inc., the world’s second-biggest producer of the metal by market value, gained 1.9 percent to C$48.39. NovaGold Resources Inc., which is developing gold and base-metals projects in Alaska and British Columbia, jumped 8.2 percent, the most in five months, to C$10.98.

    Eastern Platinum Ltd., which produces precious metals in South Africa, surged 7.3 percent to C$1.03. Eastplats said its Crocodile River Mine has resumed operations after the company reached an agreement with the National Union of Mineworkers to end a labor dispute.

     Fertilizer producers advanced after Citigroup raised its 2012 Vancouver potash price estimate by $25 to $475 a metric ton. On May 22, Belarusian Potash Co. said it increased third- quarter potash prices for Brazil, citing “exceptionally strong demand.”

     Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 2.3 percent to C$51.75. Agrium Inc. climbed 1.9 percent to C$79.30.

     Energy companies fell as natural gas futures dropped.

     Talisman Energy Inc., which produces energy in North America, the North Sea and Indonesia, declined 2.5 percent to C$19.82. Nexen Inc., an oil and gas producer with operations on five continents, lost 2.8 percent to C$21.68. PetroBakken Energy Ltd., a western Canadian oil and gas producer, decreased 2.7 percent to C$16.29.

     Canadian National Railway Co., the country’s largest railroad, slid 2.6 percent from a record high to C$73.11.

Canadian Pacific Railway Ltd. retreated 1.3 percent to C$59.31.

     Imax Corp., the maker of giant-screen movie-projection systems, sank 5.6 percent to C$33.46 after Walt Disney Co.’s “Pirates of the Caribbean: On Stranger Tides” took in less in sales in its opening weekend than some analysts had forecast.

US

By Rita Nazareth

     May 24 (Bloomberg) — U.S. stocks retreated, sending benchmark indexes to one-month lows, as a drop in stocks most- tied to economic growth offset a government report showing that sales of new homes rose to the highest level this year.

     Shares of industrial, consumer-discretionary and technology companies led the declines in the Standard & Poor’s 500 Index.

Goodyear Tire & Rubber Co. retreated 3.1 percent as China appealed a World Trade Organization ruling that backed U.S. duties on Chinese tire imports, saying the levies are “protectionist.” Freeport-McMoRan Copper & Gold Inc. and Occidental Petroleum Corp. rose at least 2.9 percent as Goldman Sachs Group Inc. signaled a positive outlook for commodities.

     The S&P 500 fell 0.1 percent to 1,316.28 at 4 p.m. in New York, reversing a 0.5 percent gain. The Dow Jones Industrial Average retreated 25.05 points, or 0.2 percent, to 12,356.21.

     “Investors are trying not to be too heroic at this point,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $14.8 billion. “People are just sliding to the sidelines. We’ve had a decent gain in stocks this year amid so many uncertainties. The earnings season is over. We need real catalysts at this point to push stocks higher.”

     The S&P 500 has fallen 3.5 percent since climbing to a three-year high on April 29 amid a commodity slump and concern about Europe’s debt crisis. Still, the benchmark has rallied 4.7 percent from the end of 2010 amid government stimulus measures and higher-than-estimated earnings.                         

     The Federal Reserve Bank of Richmond’s manufacturing index slid to negative six in May, compared with a reading of 10 the April and a forecast of nine in a Bloomberg News survey. A separate report showed that purchases of new houses rose in April to the highest level so far this year after plunging to a record low two months earlier.

     The Morgan Stanley Cyclical Index of companies most- dependent on economic growth fell 0.5 percent as 20 of its 30 stocks declined. Industrial companies had the biggest drop in the S&P 500 within 10 industries, while car companies fell the most among 24 groups.

     General Electric Co. slumped 1.5 percent, the most in the Dow, to $19.10. Goodyear lost 3.1 percent to $16.74.

     Goldman Sachs and Morgan Stanley increased their oil price forecasts by more than 20 percent, signaling a bullish outlook for commodities. Goldman boosted its 12-month prediction for Brent crude to $130 a barrel from $107, analysts led by Jeffrey Currie said in a report today. Morgan Stanley raised its Brent estimate by 20 percent to average $120 a barrel this year and by 24 percent to $130 in 2012, it said.

    “Economic growth will likely be sufficient to tighten key supply-constrained markets in the second half, leading to higher prices from current levels,” the Goldman analysts said. They also advised buying copper and zinc.

     The S&P GSCI spot index of 24 commodities lost about 10 percent through yesterday since New York-based Goldman told investors on April 11 to sell a basket of commodities including oil, copper and cotton, and in the same week recommended they stay “underweight” in raw materials.

     Gauges of energy and raw-material producers advanced as oil and metal prices rallied. Freeport, the world’s largest publicly traded copper producer, rose 3 percent to $48.82. Occidental gained 3.6 percent to $102.50.                      

     AK Steel Holding Corp. added 2.6 percent to $14.44 as the third-largest U.S. steelmaker by sales said it will increase prices for all carbon flat-rolled steel products by at least $50 per ton to recover higher costs.

     El Paso Corp. jumped 6.5 percent to $20.22. The company plans a tax-free spinoff, Chairman and Chief Executive Officer Douglas Foshee said at an analyst meeting in New York today. The decision comes after pipeline operator Williams Cos. said on Feb. 16 it will sell 20 percent of its production unit later this year. The company said it will sell the stake in an initial public offering and spin off the rest in 2012, to give shareholders “greater value.”

     AutoZone Inc. rose 6 percent to $293.30. The U.S. auto- parts retailer reported third-quarter earnings of $5.29 a share, topping the $4.97 estimated by analysts on average.

     “There’s a battle between good long-term fundamentals and short-term uncertainties,” said David Kelly, who helps oversee about $445 billion as chief market strategist for JPMorgan Funds in New York. “It’s most likely that any slowdown in the global economy is temporary. There are reasons why economic growth should pick up around the world on the second half of the year.

If you buy that notion, this is a good time to take advantage of that. The stock market looks attractive for the long run.”                       

     Barton Biggs, the hedge fund manager who bought stocks when the market bottomed in March 2009, said he is bullish on U.S.equities and likes industrial shares even though the global economy has slowed. Biggs favors companies such as Caterpillar Inc. and Deere & Co. because their earnings growth continues to exceed expectations and demand for farming and construction equipment remains strong.

     “The U.S. and the global economy have clearly slowed pretty significantly,” Biggs, who runs New York-based Traxis Partners LP, said in a radio interview with Tom Keene on Bloomberg Surveillance. “That’s arousing the bears, who believe we’re going to slip back into a long soft patch at best or maybe even a double-dip at worst,” he said. “For a number of reasons I don’t think that’s right.”

Have a wonderful evening everyone.

Be magnificent!

Strength does not come from physical capacity.  It comes from an indomitable will.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

A hero is no braver than an ordinary man,

but he is braver five minutes longer.

          -Ralph Waldo Emerson, 1802-1883

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends, A long weekend to enjoy….hope you are all having a wonderful time.  We went to see The Magic Flute on Saturday night and it was wonderful.  That was the last opera for Seattle opera’s 2010-2011 season.  And of course, the best thing of all – the world didn’t end!

David Letterman

Ladies and gentlemen, hate to be the guy, and I’m sorry about this, but we have hit, the United States of America, has hit the debt ceiling.  You know what that means?  Neither do I.

A lightning strikes the watchtower on Petrin hill in Prague on Friday, May 20^th, 2011.

Magdalena Strakova/AP

photo of the day

May 22, 2011

A pile of clothes is left on a sidewalk in Seattle’s Wedgewood neighborhood. The beginning of the end of the world was scheduled to begin at 6 p.m. on Saturday. Radio minister Harold Camping has advertised the rapture with billboards and a media campaign. Some have poked fun at the prediction with parties and pranks, such as this pile of clothes and sign.

Joshua Trujillo/seattlepi.com/AP

Market Commentary:

Canada

By Matt Walcoff

     May 20 (Bloomberg) — Canadian stocks rose for a fifth day, capping its biggest weekly gain in three months, as gold rallied after Fitch Ratings cut Greece’s credit rating and natural gas rebounded from a five-week low.

     Encana Corp., Canada’s largest natural gas producer, gained 2.3 percent as the fuel advanced on forecasts for warmer weather in the U.S. Goldcorp Inc., the world’s second-largest gold producer by market value, increased 1.4 percent as the metal climbed to a one-week high. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer by market value, fell 2.6 percent as wheat dropped because of forecasts for rain in dry areas of Europe.

     The Standard & Poor’s/TSX Composite Index climbed 27.18 points, or 0.2 percent, to 13,652.27. For the week, the S&P/TSX rose 2.1 percent.

     “The global economic data is softer but still positive,” said Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Asset Management, a Manulife Financial Corp. unit that oversees $217 billion. “Valuations and earnings growth in the U.S.” are also favorable.

     Nine of 10 S&P/TSX industry groups gained this week as the lowest prices relative to earnings in six months attracted investors back into Canadian stocks. The S&P/TSX’s 3.5 percent quarterly decline through yesterday was the third-most among developed-market stock benchmarks behind the Austrian Traded Index and the Athens Stock Exchange General Index.

     S&P/TSX financial, consumer-staples and technology stocks advanced the most this week in three months and an index of pipeline companies surged the most in 19 months. Utility and telecommunications stocks both climbed for a fifth week.

     The S&P/TSX Energy Index gained as natural gas jumped 3.3 percent and oil rose 1.2 percent. Encana advanced 2.3 percent to C$32.60. Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, increased 0.7 percent to C$40.88.

     Crew Energy Inc., a western Canadian oil and gas producer, rallied 6.9 percent to C$15.72 after Kim Page, an analyst at Wellington West Capital Markets Inc., raised her rating on the shares to “strong buy” from “buy.”

     Trilogy Energy Corp., which also produces oil and gas in Canada, surged 13 percent to a five-year high of C$25.81 after its first-quarter cash flow topped the average analyst estimate by 10 percent. At least five analysts raised their price forecasts for Trilogy shares.                        

     Gold gained 1.1 percent, the most in three weeks, after Fitch cut Greece’s credit rating to B+ from BB+, saying a restructuring of the country’s debt would be considered a default. The S&P/TSX Gold Index climbed for a sixth day, the longest streak since August.

     Goldcorp rallied 1.4 percent to C$47.50. Silver Wheaton Corp., Canada’s fourth-biggest precious-metals company by market value, advanced 1.9 percent to C$34.17 as silver rallied. Alacer Gold Corp., which mines in Turkey, climbed 5.7 percent to C$8.76.

     Fertilizer producers retreated as wheat dropped for a second day. Potash Corp. decreased 2.6 percent to C$50.58. Agrium Inc., Canada’s second-biggest fertilizer producer, fell0.8 percent to C$77.85.

     Sino-Forest Corp., a forest-products company that operates in China, lost 4.3 percent to C$20.33. China’s power shortage may cut economic growth by 0.4 percentage points this year, Lu Yanjin, an analyst at Fuzhou, China-based Industrial Securities Co., wrote in a report today.

     New Millennium Capital Corp., which is developing an iron ore project in Quebec, soared 15 percent to C$2.95 after ArcelorMittal said it will spend C$2.1 billion ($2.2 million) to raise output at its nearby Mont-Wright mine.

US

By Whitney Kisling

     May 21 (Bloomberg) — U.S. stocks declined for a third straight week, the longest slump since August, as investors grew more concerned that Greece will default on its debt and reduced earnings forecasts undermined confidence in the economy.

     Staples Inc. and Gap Inc. led losses in the Standard & Poor’s 500 Index after cutting their profit projections, while Hewlett-Packard Co. plunged 11 percent as it reduced its sales forecast. NYSE Euronext sank 13 percent after Nasdaq OMX Group Inc. said it was dropping a takeover bid for the operator of the New York Stock Exchange. Newfield Exploration Co. and El Paso Corp. led energy stocks to the biggest gain among 10 groups.

     The S&P 500 lost 0.3 percent to 1,333.27 this week. The index has fallen every week in May after reaching an almost three-year high at the end of April. The Dow Jones Industrial Average fell 83.71 points, or 0.7 percent, to 12,512.04.

     “People are realizing that not only the U.S. but the global economy still faces some issues,” said Malcolm Polley, who oversees $1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “You’ve still got problems particularly in Greece that aren’t going to go away soon. The market had gotten a little ahead of itself.”

     While the S&P 500 is up 6 percent so far in 2011, the benchmark index for U.S. equities has lost 2.2 percent this month. The S&P 500 has only fallen one month so far this year, slipping 0.1 percent in March amid concern that Japan’s earthquake and tsunami would curb global demand.

     Staples slipped the most in the S&P 500, losing 19 percent $16.37. The office-supply retailer forecast 2011 earnings wouldn’t exceed analysts’ average estimate, according to data compiled by Bloomberg.

     Gap, the largest U.S. apparel chain, dropped 17 percent to $19.22 and had the worst daily decline in almost a decade yesterday. The company cut its full-year profit forecast by 22 percent as costs to make clothes rose faster than expected.

     NYSE Euronext plunged as smaller competitors Nasdaq OMX and IntercontinentalExchange Inc. withdrew their bid for the New York-based company after the U.S. Department of Justice threatened a lawsuit. The shares lost 13 percent to $35.76.

     S&P 500 technology companies slid the most among 10 groups this week, dropping 1.5 percent for the third straight week of losses. Hewlett-Packard, the biggest personal-computer maker, fell the most among technology shares after it cut a billion dollars from its sales forecast for 2011 and missed analysts’ profit projections. The shares slid 11 percent to $35.98.

     KLA-Tencor Corp. lost 7.3 percent to $41.20. The semiconductor company, along with Intel Corp. and Applied Materials Inc., was downgraded by Goldman Sachs Group Inc., which cited increased competition from tablet computers and excess supply.

     Energy shares in the S&P 500 rose 0.9 percent as a group this week, after losing 8.3 percent in the first two weeks of May. Oil climbed above $100 a barrel on May 18 after an Energy Department report showed an unexpected drop in U.S. inventories as refineries bolstered operating rates and imports declined.

     Crude gained again on May 20 after the American Petroleum Institute said fuel consumption increased in April.

     Newfield Exploration, an oil and gas producer which operates in the Gulf of Mexico, onshore U.S., Malaysia and China, advanced 6.9 percent. El Paso, which operates natural-gas pipelines, rose 6.4 percent.

     Salesforce.com Inc., the largest supplier of customer- management software, advanced 8.7 percent to $146.61 for the best weekly gain since November. The company, which sells cloud- computing applications that companies rent over the Web rather than install on their computers, forecast fiscal second-quarter sales and profit that topped estimates as the company added 5,400 customers in last quarter.

     The S&P 500 started the week lower on May 16 as concern about Europe’s debt crisis was heightened after Greece sought additional bailout funds. European finance chiefs endorsed a 78 billion-euro ($111 billion) bailout for Portugal. Authorities stepped up the pressure on Greece to sell assets and deepen spending cuts to win an increase of its 110 billion-euro aid package and more time to repay the loans.

     “Some degree of caution might be in order in the near- term, while we wait for greater clarity on a series of risks in the weeks ahead,” said David Joy, the Boston-based chief market strategist at Ameriprise Financial Inc., which oversees $693 billion in assets. “Recent evidence suggests a bit of softness in the U.S. economy.”

     While a government report showed that fewer Americans than estimated filed applications for unemployment benefits during the previous week, other data showed manufacturing in the New York and Philadelphia regions expanded at a slower-than-forecast pace. Housing starts and existing home sales also unexpectedly decreased.

     The S&P 500 was poised to gain for the week after the Federal Reserve signaled continued low interest rates on May 18.

Talks about an exit strategy from the record stimulus measures don’t mean monetary tightening “would necessarily begin soon,” according to the Fed’s April policy meeting records, released last week. Gap’s forecast and Fitch’s downgrade of Greece brought the index lower for the week yesterday.

     The S&P 500 has climbed 27 percent since Fed Chairman Ben S. Bernanke signaled in August that he would buy more bonds to stimulate the economy. The Fed’s second program of quantitative easing, or QE2, which was officially announced in November, ends in June.

     Joy said the approaching end of the Fed’s quantitative easing “raises uncertainty” about its role in the S&P 500’s direction.

Have a wonderful day.

Be magnificent!

Very few people in this world can reason normally.

There is a terrible tendency to accept all that is said, all that is read, and to accept it without question.

Only he who is ready to question, to think for himself, will find the truth!

To understand the currents of a river,

he who wishes to know the truth must enter the water.

-Nisargadatta, 1897-1981

As ever,

Carolann

Life is a rich strain of music,

suggesting a realm too fair to be. 

  -George William Curtis, 1824-1892     

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

This poem by Walt Whitman is an exuberant salutation to the world and may inspire you to embrace strangers on the street!

Crossing Brooklyn Ferry
FLOOD-TIDE below me! I watch you face to face;
Clouds of the west! sun there half an hour high! I see you also face
to face.
Crowds of men and women attired in the usual costumes! how curious
you are to me!
On the ferry-boats, the hundreds and hundreds that cross, returning
home, are more curious to me than you suppose;
And you that shall cross from shore to shore years hence, are more to
me, and more in my meditations, than you might suppose.

The impalpable sustenance of me from all things, at all hours of the
day;
The simple, compact, well-join’d scheme–myself disintegrated, every
one disintegrated, yet part of the scheme:
The similitudes of the past, and those of the future;
The glories strung like beads on my smallest sights and hearings–on
the walk in the street, and the passage over the river;
The current rushing so swiftly, and swimming with me far away;
The others that are to follow me, the ties between me and them;
The certainty of others–the life, love, sight, hearing of others.

Others will enter the gates of the ferry, and cross from shore to shore;
Others will watch the run of the flood-tide;
Others will see the shipping of Manhattan north and west, and the  heights of Brooklyn to the south and east;
Others will see the islands large and small;
Fifty years hence, others will see them as they cross, the sun half  an hour high;
A hundred years hence, or ever so many hundred years hence, others
will see them,
Will enjoy the sunset, the pouring in of the flood-tide, the falling
back to the sea of the ebb-tide.

It avails not, neither time or place–distance avails not;
I am with you, you men and women of a generation, or ever so many
generations hence;
I project myself–also I return–I am with you, and know how it is.

Just as you feel when you look on the river and sky, so I felt;
Just as any of you is one of a living crowd, I was one of a crowd;
Just as you are refresh’d by the gladness of the river and the bright
flow, I was refresh’d;
Just as you stand and lean on the rail, yet hurry with the swift
current, I stood, yet was hurried;
Just as you look on the numberless masts of ships, and the thick-
stem’d pipes of steamboats, I look’d.

I too many and many a time cross’d the river, the sun half an hour
high;
I watched the Twelfth-month sea-gulls–I saw them high in the air,
floating with motionless wings, oscillating their bodies,
I saw how the glistening yellow lit up parts of their bodies, and
left the rest in strong shadow,

I saw the slow-wheeling circles, and the gradual edging toward the
south.

I too saw the reflection of the summer sky in the water,
Had my eyes dazzled by the shimmering track of beams,
Look’d at the fine centrifugal spokes of light around the shape of my
head in the sun-lit water,
Look’d on the haze on the hills southward and southwestward,
Look’d on the vapor as it flew in fleeces tinged with violet,
Look’d toward the lower bay to notice the arriving ships,
Saw their approach, saw aboard those that were near me,
Saw the white sails of schooners and sloops–saw the ships at anchor,
The sailors at work in the rigging, or out astride the spars,
The round masts, the swinging motion of the hulls, the slender
serpentine pennants,
The large and small steamers in motion, the pilots in their pilot-
houses,
The white wake left by the passage, the quick tremulous whirl of the
wheels,
The flags of all nations, the falling of them at sun-set,
The scallop-edged waves in the twilight, the ladled cups, the
frolicsome crests and glistening,
The stretch afar growing dimmer and dimmer, the gray walls of the
granite store-houses by the docks,
On the river the shadowy group, the big steam-tug closely flank’d on
each side by the barges–the hay-boat, the belated lighter,
On the neighboring shore, the fires from the foundry chimneys burning
high and glaringly into the night,
Casting their flicker of black, contrasted with wild red and yellow
light, over the tops of houses, and down into the clefts of
streets.

These, and all else, were to me the same as they are to you;

I project myself a moment to tell you–also I return.

I loved well those cities;
I loved well the stately and rapid river;
The men and women I saw were all near to me;
Others the same–others who look back on me, because I look’d forward
to them;
(The time will come, though I stop here to-day and to-night.)

What is it, then, between us?
What is the count of the scores or hundreds of years between us?

Whatever it is, it avails not–distance avails not, and place avails
not.

I too lived–Brooklyn, of ample hills, was mine;
I too walk’d the streets of Manhattan Island, and bathed in the
waters around it;
I too felt the curious abrupt questionings stir within me,
In the day, among crowds of people, sometimes they came upon me,
In my walks home late at night, or as I lay in my bed, they came upon
me.

I too had been struck from the float forever held in solution;
I too had receiv’d identity by my Body;
That I was, I knew was of my body–and what I should be, I knew I
should be of my body.

It is not upon you alone the dark patches fall,
The dark threw patches down upon me also;
The best I had done seem’d to me blank and suspicious;
My great thoughts, as I supposed them, were they not in reality
meagre? would not people laugh at me?

It is not you alone who know what it is to be evil;
I am he who knew what it was to be evil;
I too knitted the old knot of contrariety,
Blabb’d, blush’d, resented, lied, stole, grudg’d,
Had guile, anger, lust, hot wishes I dared not speak,
Was wayward, vain, greedy, shallow, sly, cowardly, malignant;
The wolf, the snake, the hog, not wanting in me,
The cheating look, the frivolous word, the adulterous wish, not
wanting,
Refusals, hates, postponements, meanness, laziness, none of these
wanting.

But I was Manhattanese, friendly and proud!
I was call’d by my nighest name by clear loud voices of young men as
they saw me approaching or passing,
Felt their arms on my neck as I stood, or the negligent leaning of
their flesh against me as I sat,
Saw many I loved in the street, or ferry-boat, or public assembly,
yet never told them a word,
Lived the same life with the rest, the same old laughing, gnawing,
sleeping,
Play’d the part that still looks back on the actor or actress,
The same old role, the role that is what we make it, as great as we
like,
Or as small as we like, or both great and small.

Closer yet I approach you;
What thought you have of me, I had as much of you–I laid in my
stores in advance;
I consider’d long and seriously of you before you were born.

Who was to know what should come home to me?
Who knows but I am enjoying this?
Who knows but I am as good as looking at you now, for all you cannot
see me?

It is not you alone, nor I alone;
Not a few races, nor a few generations, nor a few centuries;
It is that each came, or comes, or shall come, from its due emission,
From the general centre of all, and forming a part of all:
Everything indicates–the smallest does, and the largest does;
A necessary film envelopes all, and envelopes the Soul for a proper
time.
Now I am curious what sight can ever be more stately and admirable to
me than my mast-hemm’d Manhattan,
My river and sun-set, and my scallop-edg’d waves of flood-tide,
The sea-gulls oscillating their bodies, the hay-boat in the twilight,
and the belated lighter;
Curious what Gods can exceed these that clasp me by the hand, and
with voices I love call me promptly and loudly by my nighest
name as I approach;
Curious what is more subtle than this which ties me to the woman or
man that looks in my face,
Which fuses me into you now, and pours my meaning into you.

We understand, then, do we not?
What I promis’d without mentioning it, have you not accepted?
What the study could not teach–what the preaching could not
accomplish, is accomplish’d, is it not?
What the push of reading could not start, is started by me
personally, is it not?

Flow on, river! flow with the flood-tide, and ebb with the ebb-tide!
Frolic on, crested and scallop-edg’d waves!
Gorgeous clouds of the sun-set! drench with your splendor me, or the
men and women generations after me;
Cross from shore to shore, countless crowds of passengers!
Stand up, tall masts of Mannahatta!–stand up, beautiful hills of
Brooklyn!
Throb, baffled and curious brain! throw out questions and answers!
Suspend here and everywhere, eternal float of solution!
Gaze, loving and thirsting eyes, in the house, or street, or public
assembly!
Sound out, voices of young men! loudly and musically call me by my
nighest name!
Live, old life! play the part that looks back on the actor or
actress!
Play the old role, the role that is great or small, according as one
makes it!

Consider, you who peruse me, whether I may not in unknown ways be
looking upon you;
Be firm, rail over the river, to support those who lean idly, yet
haste with the hasting current;
Fly on, sea-birds! fly sideways, or wheel in large circles high in
the air;
Receive the summer sky, you water! and faithfully hold it, till all
downcast eyes have time to take it from you;
Diverge, fine spokes of light, from the shape of my head, or any
one’s head, in the sun-lit water;
Come on, ships from the lower bay! pass up or down, white-sail’d
schooners, sloops, lighters!
Flaunt away, flags of all nations! be duly lower’d at sunset;
Burn high your fires, foundry chimneys! cast black shadows at
nightfall! cast red and yellow light over the tops of the
houses;
Appearances, now or henceforth, indicate what you are;  
You necessary film, continue to envelop the soul;
About my body for me, and your body for you, be hung our divinest
aromas;
Thrive, cities! bring your freight, bring your shows, ample and
sufficient rivers;
Expand, being than which none else is perhaps more spiritual;
Keep your places, objects than which none else is more lasting.

We descend upon you and all things–we arrest you all;
We realize the soul only by you, you faithful solids and fluids;
Through you color, form, location, sublimity, ideality;
Through you every proof, comparison, and all the suggestions and
determinations of ourselves.

You have waited, you always wait, you dumb, beautiful ministers! you
novices!  
We receive you with free sense at last, and are insatiate
henceforward;
Not you any more shall be able to foil us, or withhold yourselves
from us;
We use you, and do not cast you aside–we plant you permanently
within us;
We fathom you not–we love you–there is perfection in you also;
You furnish your parts toward eternity;
Great or small, you furnish your parts toward the soul.

                                                           -Walt Whitman

photos of the day

May 19, 2011

A horse works out during early-morning training at Pimlico Race Track in Baltimore. The 136th running of the Preakness Stakes will take place at Pimlico on May 21.

Molly Riley/Reuters

Four lion cubs sit in a basket as they are christened at Hagenbecks zoo in Hamburg, Germany. The cubs, named Bandele, Batou, Naledi and Sakina, were born on January 31.

Fabian Bimmer/Reuters

Market Commentary:

Canada

By Matt Walcoff

     May 19 (Bloomberg) — Canadian stocks rose for a fourth day as dividend-paying stocks gained on speculation the Bank of Canada will be slow to raise interest rates and transportation companies advanced as fuel prices fell.

     Rogers Communications Inc., Canada’s biggest wireless provider, increased 1.9 percent after UBS AG said the country may delay changes to foreign-ownership restrictions in the telecommunications industry. Canadian National Railway Co., the country’s biggest railroad, rallied 1.6 percent as crude oil fell 1.7 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped 2.9 percent as corn retreated for the first time in six days.

     The Standard & Poor’s/TSX Composite Index climbed 17.84 points, or 0.1 percent, to 13,625.09.

     “People are looking for yield, and I think they are going to look for larger names, what are perceived to be safer names, in the Canadian market,” said Andrew Pyle, who helps manage C$200 million ($206 million) as an associate portfolio manager for Scotia McLeod in Peterborough, Ontario. “Even some of the lower-dividend-yielding stocks you see of a pickup in demand for because of this pullback in interest rates.”

     The S&P/TSX rose 1.7 percent this week through yesterday as investors took advantage of the lowest share prices relative to earnings in six months and oil, copper and agricultural commodities rebounded. The stock benchmark remained down 3.6 percent for the quarter as of yesterday’s close.                    

     Bank of Canada Governor Mark Carney gave a “generally pessimistic” speech at a fund-raising dinner yesterday, Avery Shenfeld, an economist at Canadian Imperial Bank of Commerce, said in an e-mail message to clients today.

     Shenfeld later sent an e-mail asking people not to cite his earlier message because it was an “off the record” event.

     David Tulk, a strategist at Toronto-Dominion Bank, said on May 17 that the central bank probably won’t raise its benchmark rate until September. TD had previously forecast a July interest rate boost.

     Indexes of S&P/TSX financial, telecommunications and pipeline stocks, each of which has a dividend yield of at least 3.4 percent, gained.

     TD, Canada’s second-largest bank, advanced for a fifth day, climbing 0.6 percent to C$83.97. Manulife Financial Corp., North America’s fourth-largest insurer, increased 0.7 percent to C$17.59.                       

     Wireless carriers rose after Phillip Huang, an analyst at UBS, said the appointment of Christian Paradis as Canada’s industry minister may hold up the government’s review of foreign-ownership rules.

     Rogers gained 1.9 percent to C$37.45. BCE Inc., Canada’s largest phone company, advanced 1 percent from a 32-month high to C$39.

     Transportation companies gained as crude futures retreated to less than $99 a barrel in New York.

     CN increased 1.6 percent to a record C$74.83. Canadian Pacific Railway Ltd., the country’s second-biggest railroad, climbed 0.7 percent to C$60.06. Transat A.T. Inc., the owner of Air Transat, surged 6.6 percent to C$12.39.

     Fertilizer producers fell today as corn and wheat dropped after surging 10 percent and 12 percent, respectively, this week through yesterday.

     Potash Corp. declined 2.9 percent to C$51.93. Agrium Inc., Canada’s second-largest fertilizer producer, lost 1.5 percent to C$78.49.

     BlackBerry maker Research In Motion Ltd. fell 2.8 percent to C$42.87 after market-research firm Gartner Inc. said its share of the global smartphone market fell to 13 percent last quarter from 20 percent a year earlier.

     Electronic-whiteboard maker Smart Technologies Inc. sank 28 percent to C$6.79, the lowest level since its July initial public offering, after saying it lost 2 cents a share in the fourth quarter, excluding certain items. All eight analysts in a Bloomberg survey had forecast a profit. Analysts at Cowen Group Inc. and Piper Jaffray Cos. cut their ratings on the company to “neutral.

US

By Rita Nazareth

     May 19 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as a government report showing a bigger-than-forecast drop in jobless claims bolstered optimism about the economic recovery.

     LinkedIn Corp., the largest professional-networking website, more than doubled in the first day of trading after its initial public offering. Thermo Fisher Scientific Inc. jumped 4.2 percent after agreeing to buy Phadia AB for about $3.5 billion to grow in testing for allergies and autoimmune diseases. Intel Corp., KLA-Tencor Corp. and Applied Materials Inc. slumped at least 1.1 percent as Goldman Sachs Group Inc. cut their ratings amid increased competition and excess supply.

     The S&P 500 advanced 0.2 percent to 1,343.60 at 4 p.m. in New York after yesterday posting the biggest gain in three weeks. The Dow Jones Industrial Average gained 45.14 points, or 0.4 percent, to 12,605.32, erasing an earlier 27-point decline.

     “The rally will accelerate,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc., which oversees $358.2 billion. “We had an excellent jobless claims number, which tells me that we’re going to see a solid jobs report. The Fed has indicated that it will be vigilant and watching the pace of jobs recovery. I don’t believe we’ll see a QE3. Still, we’ll continue with easy policy.”

     The S&P 500 has risen 6.8 percent in 2011 amid higher-than estimated earnings and government stimulus measures. Chairman Ben S. Bernanke and the Federal Open Market Committee plan to complete a $600 billion bond purchase program, known as quantitative easing or “QE” on Wall Street, in June while holding interest rates “exceptionally low” for an “extended period,” according to a Fed statement last month. They have yet to settle on a plan for withdrawing stimulus.

     Stock futures rose before the start of regular trading as a report showed that fewer Americans than forecast filed applications for unemployment benefits last week. Jobless claims declined by 29,000 to 409,000 in the week ended May 14. The median estimate of economists in a Bloomberg News survey called for a drop to 420,000.

     Earlier today, stocks turned lower after a report showed that sales of existing homes unexpectedly declined in April, indicating the industry is struggling to gain traction as the economy expands. Separate figures showed that manufacturing in the Philadelphia unexpectedly grew in May at the slowest pace in seven months, a sign the world’s largest economy may get less of a boost from the industry that led it out of the recession.

     The index of U.S. leading indicators fell in April after nine months of gains, depressed by a pickup in jobless claims that reflects temporary setbacks including auto-plant shutdowns.

The Bloomberg Consumer Comfort Index declined to minus 49.4 in the period to May 15, the worst reading since August, from the prior week’s minus 46.9.

     “There’s not much to get excited about,” said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management Inc., which oversees $51.6 billion. “We’ve seen some net negative surprises in recent economic indicators. People are questioning if this is only a downward blip. Chances are we’ll work through this. For the time being, we’ve increased the defensiveness of our portfolio.”

     LinkedIn more than doubled, surging 109 percent to $94.25.

The Mountain View, California-based company sold 7.84 million shares at $45 each, according to a statement released yesterday.

The company had raised the proposed range for the share sale on May 17, to $42 to $45 each from $32 to $35. The sale raised $352.8 million. The ticker symbol is LNKD.                   

Thermo Fisher Scientific jumped 4.2 percent to $65.38.

Thermo is buying Phadia from Cinven Ltd., a London-based private equity firm, and expects the deal to close in the fourth quarter, the Waltham, Massachusetts-based company said in a statement today. The agreement will immediately add to adjusted profit and contribute as much as 30 cents a share next year, Thermo said.

     BlackRock Inc. rallied 2.5 percent to $198.10. Bank of America Corp., the largest U.S. lender by assets, agreed to sell its remaining stake in BlackRock back to the world’s biggest money manager for about $2.5 billion. Bank of America acquired a 34 percent stake in BlackRock when it took over Merrill Lynch & Co. in 2009 and has been gradually reducing its holdings.

     The deal dissolves the last of what once had been a 49.8 percent stake in BlackRock acquired by Merrill Lynch in September 2006, in exchange for the brokerage’s fund-management unit. The transaction will be completed about June 1, BlackRock said. The stock will be retired, which will immediately boost BlackRock’s earning per share, the statement said.

     Global per-share earnings will rise 18 percent this year, faster than an earlier forecast, amid stronger revenue growth and sustained margins, according to Citigroup Inc. Earnings per share, or EPS, are estimated to increase 11 percent in 2012 and 9 percent in 2013, analysts led by Robert Buckland, Citigroup’s chief global strategist, wrote in a report yesterday.

     “Companies are generating faster revenue growth than we originally expected,” Buckland said in the report. “In addition, cautious cost management means that current margins are at least sustainable for now.”

     Intel slumped 1.4 percent to $23.54. Goldman Sachs lowered its rating on the world’s largest chipmaker, to “sell” from “neutral” yesterday. The bank said its analysis shows that processors out-shipped PCs by about 10 percent in the first quarter. It said Intel’s longer-term threat is from tablets such as Apple Inc.’s iPad, which run on ARM-based chips, eating into the PC market.                     

    “We are most concerned about the impact of tablets, as we continue to believe that roughly one-third of tablets are cannibalistic to PCs,” Goldman Sachs’s statement said.

     Goldman Sachs downgraded KLA to “sell” from “neutral,” citing its vulnerability to weakness at Intel. Applied Materials was cut to “neutral” from “buy” because of lower 2012 capital spending by chip makers. The bank said orders for semiconductors are likely to decline in the next six quarters.

     KLA dropped 3.8 percent to $41.21, while Applied Materials slid 1.2 percent to $14.33.

     Big Lots Inc. tumbled 11 percent, the most since December 2008, to $33.77. The Wall Street Journal said yesterday that bids from buyout firms came in lower than anticipated. Timothy Johnson, a spokesman for the Columbus, Ohio-based company, declined to comment.

Have a wonderful day everyone.

Be magnificent!

With closed eyes, I have come to this last thought:

even while I am unconscious in sleep, the dance of life will continue in the silent field of my sleeping body, in the same rhythm as the stars above.

My heart beats, my blood courses through my arteries, and the millions of atoms that live in my body will vibrate in time with the harp that quivers under the fingers of the great Master.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

It is a capital mistake to theorize before

one has data.  Insensibly one begins to

twist facts to suit theories, instead of

theories to suit facts.

    -Arthur Conan Doyle, 1859-1930

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

I thought of this poem today for some reason – a comment someone made in passing about someone I know…

The Soul Selects Her Own Society

The soul selects her own society,
Then shuts the door;
On her divine majority
Obtrude no more.

Unmoved, she notes the chariot’s pausing
At her low gate;
Unmoved, an emperor is kneeling
Upon her mat.

I’ve known her from an ample nation
Choose one;
Then close the valves of her attention
Like stone.

-Emily Dickinson, 1862

I went to see Joan Rivers last night and laughed non-stop for 1 ½ hours. She began with jokes on the Arnold, “We’re paying her $8,000/hour because she’s a GUTE CLEANER…” (explanation to his wife Maria Shriver) and went on from there. She is 78 years old and looks fantastic. She offered no remorse for plastic surgery, “Why do people spend so much on cars? You bring your face to the party and leave your car at the curb?”

Market Commentary:

Canada
By Matt Walcoff
May 18 (Bloomberg) — Canadian stocks rose for a third day as oil gained after a government report showed a decline in U.S.
supplies and base metals advanced on speculation demand from China will increase.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, gained 2.5 percent after a rating increase by Menno Hulshof, an analyst at Toronto- Dominion bank. Ivanhoe Mines Ltd., which has a copper and gold project in Mongolia with Rio Tinto Group, rose 7.2 percent as copper gained for a fifth day. BlackBerry maker Research In Motion Ltd. rallied 3.8 percent after AllianceBernstein Holding LP removed its “underperform” rating.

The Standard & Poor’s/TSX Composite Index advanced 166.19 points, or 1.2 percent, to 13,607.25, erasing its loss for the year.

“Commodities have come down to the point where some are looking relatively cheap,” said Blair Falconer, who oversees C$800 million ($822 million) as a money manager at HSBC Securities (Canada) Inc. in Toronto. “Energy, for example, is looking a lot better than it did a short while ago.”

The index increased 0.5 percent this week through yesterday, narrowing its quarterly loss to 4.8 percent, as raw- materials companies climbed on rebounding copper, corn and wheat prices. The materials industry accounts for 21 percent of Canadian stocks by market value, according to Bloomberg data.

Crude futures rose 3.3 percent after the U.S. Energy Department said oil inventories fell last week. Most analysts in a Bloomberg survey had forecast an increase.

Suncor Energy Inc., Canada’s largest oil and gas producer, advanced 2.7 percent to C$39.56. Cenovus Energy Inc., the country’s fifth-biggest energy company, increased 3.5 percent to C$33.88. ARC Resources Ltd., a western Canadian oil and gas producer, climbed 4.3 percent to C$25.09 after reporting first- quarter cash flow that beat the average analyst estimate.

Canadian Natural gained 2.5 percent to C$40.74 after Hulshof raised his rating on the stock to “action list buy” from “buy.” In a note to clients, Hulshof cited the company’s growing oil-sands resources and forecasts of higher processing- equipment reliability.

Sterling Resources Ltd., which explores for oil and gas in Europe, plunged 29 percent to C$1.78 after encountering wet sands in North Sea drilling. The shares have tumbled 54 percent since April 28, when the company declared force majeure on its Romanian offshore blocks due to trouble getting government permits.

Oilfield-services provider North American Energy Partners Inc. sank 26 percent to C$7.39. The company said it will take a writedown of C$40 million to C$45 million due to the impact of inflation at the Horizon oil-sands project.

Base-metals and coal producers gained after China’s statistics bureau said home prices advanced in 67 of 70 cities in April from last year. Copper demand from Chinese cable makers will more than double in the next 10 years, Dai Zhixiang, chairman and chief executive officer of Hu An Cable Holdings Ltd., said in an interview.

Ivanhoe Mines increased 7.2 percent to C$24.58. Teck Resources Ltd., Canada’s largest company in the industry, climbed 4.2 percent to C$48.70. First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, rose 2 percent to C$135.

Nevsun Resources Ltd., which produces gold in Eritrea, rallied 13 percent, the most in 11 months, to C$5.87 after saying it will begin paying dividends.

Jaguar Mining Inc., which mines gold in Brazil, soared 23 percent, the most since October 2008, to C$5.14 after its first- quarter earnings beat the average analyst estimate.

Fertilizer producers climbed as wet weather delayed corn and wheat planting in the U.S. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 2.3 percent to C$53.49. Agrium Inc. gained 2.1 percent to C$79.67.

RIM advanced for a second day after falling to a four-year low May 16, rallying 3.8 percent to C$44.11. Pierre Ferragu, a Bernstein analyst, raised his rating on the shares to “market perform, telling clients in a note, ‘‘We do not see RIM’s situation deteriorating fast enough in the next 12 months to frighten the market beyond today’s negative sentiment.”

US
By Rita Nazareth
May 18 (Bloomberg) — U.S. stocks rose, snapping a three- day drop, as the Federal Reserve signaled continued low interest rates, commodities rebounded and earnings at companies including Dell Inc. beat analyst estimates.

Chevron Corp. and Monsanto Co. advanced at least 2.4 percent as commodities climbed for the first time in three days amid signs of increasing demand. Dell, the world’s second- largest computer maker, jumped 5.4 percent as corporate spending helped the company withstand a slump in consumer demand. Teen retailer Abercrombie & Fitch Co. increased 3.4 percent as earnings beat analysts’ projections.

The Standard & Poor’s 500 Index rose 0.9 percent to
1,340.68 at 4 p.m. in New York, after losing 1.5 percent over the last three days. The Dow Jones Industrial Average added 80.60 points, or 0.7 percent, to 12,560.18. Stocks extended gains as records from the Fed’s April policy meeting said that talks about an exit strategy from record stimulus measures don’t mean monetary tightening “would necessarily begin soon.”

“I see a lot of green on my screen,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York, which manages $2 billion. “We got Dell as a turnaround story. Commodities were looking for an opportunity to bounce and traders will take advantage of it. In addition, the Fed wants to encourage the movement of assets out of fixed income and into equities by keeping rates low.”

The S&P 500 has advanced 6.6 percent in 2011 amid government stimulus measures and higher-than-estimated corporate earnings. More than two-thirds of the 446 companies that reported results since April 11 topped the average analyst earnings projection, according to data compiled by Bloomberg.

Fed policy makers began to coalesce last month on a strategy to reverse record monetary stimulus by first ending their reinvestment policy and later raising interest rates and selling assets.

Almost all officials agreed that the “first step toward normalization” should be ceasing reinvestment of principal payments on mortgage debt that began in August, the Federal Open Market Committee said in records of its April 26-27 session, released today. A majority preferred to sell the Fed’s securities after raising short-term interest rates, and most wanted to put asset sales on a preannounced schedule while using federal-funds rate increases as an “active tool.”

The Morgan Stanley Cyclical Index of companies most- dependent on economic growth rose 1.2 percent as 25 of its 30 stocks gained. The Dow Jones Transportation Average of 20 stocks advanced 1.6 percent.

Gauges of energy and raw-material producers rallied more than 1.9 percent, the two biggest gains within 10 S&P 500 groups. Crude oil climbed above $100 a barrel in New York after an Energy Department report showed an unexpected drop in U.S. inventories as refineries bolstered operating rates and imports declined. Metal prices also gained.

Chevron, the second-largest U.S. oil company, added 2.4 percent to $102.86. Monsanto, the world’s largest seed company, rose 3.9 percent to $65.62.

Dell climbed 5.4 percent to $16.75. It’s the second straight quarter that the company’s results outshined those of rival Hewlett-Packard Co. A slowdown in home-computer sales has roiled industry leader Hewlett-Packard, which cut its annual sales forecast yesterday. While Dell also saw its consumer revenue drop, the company said it was able to squeeze more profit out of each sale.

Abercrombie & Fitch rose 3.4 percent to $75.69. The teen retailer reported first-quarter earnings from continuing operations of 27 cents a share. On average, the analysts surveyed by Bloomberg estimated profit of 13 cents a share.

Analog Devices Inc. had the biggest gain in the S&P 500, adding 5.9 percent to $42.60. The maker of chips used in cars, consumer electronics and phone networks forecast third-quarter adjusted earnings of as much as 75 cents a share, topping the average analyst estimate by 5 cents.

“We’ve got good earnings surprises,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St.
Petersburg, Florida, who helps manage $275 billion. “The numbers will continue to be a lot stronger than people think. Of the developed world, I like the U.S. by far. From a 50,000-foot level, I’m avoiding Europe because they have a huge bunch of problems.”

Fed Bank of St. Louis President James Bullard said the European sovereign-debt crisis has surpassed rising oil prices to become the biggest risk to the economic outlook in the U.S.

“I would have said oil a few weeks ago, but now with those prices retreating, just sitting here today, I’m a little more worried about Europe than anything else,” Bullard said today in an interview.

The yield on Greece’s 10-year bond rose 18 basis points today to 15.8 percent, more than twice the rate at the time of the country’s 110 billion-euro ($156 billion) rescue a year ago.

European Union finance ministers for the first time this week floated the idea of extending Greece’s debt-repayment schedule as the nation struggles to meet the terms of the rescue.

U.S. stocks are more vulnerable to a rising dollar than at any other time in the past four decades, according to Myles Zyblock, chief institutional strategist at RBC Capital Markets.

Through the first four months of the year, the Dollar Index dropped 7.7 percent. The indicator of the dollar’s value against the currencies of six major U.S. trading partners ended April at its low for the year. Since then, the index has risen as much as 3.9 percent.

“The dollar rally is a headwind” that may cause stocks to drop in the next three months, Zyblock wrote today in a report.
By his reckoning, the so-called inverse correlation between the currency’s value and shares is the strongest since 1971.

Disappointing economic reports also indicate share prices are poised to fall, the report said. He cited a Citigroup Inc. index that compares indicators with estimates for 10 of the largest economies. The gauge fell last week to minus 23.7, its lowest reading in two years.

Have a wonderful evening everyone.

Be magnificent!

Wise people are concerned only with what lies behind all these things.
Just as bees fly from one blossom to another, looking only for the essence of each one,
wise people look only for the essence of every person they meet.
Wise people, who know and understand the soul, are indifferent to both pleasure and pain;
they have risen above sensations. They are indifferent to the past and the future; they have risen above time.
They are indifferent to danger; they have risen above fear.
Wise people know that what is here, is also there;
that what was, will also be.
They see unity, not division.

-Katha Upanishad

As ever,

Carolann

Everybody pities the weak;
jealousy you have to earn.
-Arnold Schwarzenegger, 1947-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI
Senior Vice-President &
Senior Investment Advisor

Dear Friends,  Perhaps because I bought lots of Coca Cola shares today, I thought of this poem…. It is one of my all time favorites – maybe my favorite love poem –  written by Frank O’Hara in 1966.

Having a Coke with You is even more fun than going to San Sebastian, Irún, Hendaye, Biarritz, Bayonne or being sick to my stomach on the Travesera de Gracia in Barcelona partly because in your orange shirt you look like a better happier St. Sebastian partly because of my love for you, partly because of your love for yoghurt partly because of the fluorescent orange tulips around the birches
partly because of the secrecy our smiles take on before people and statuary
it is hard to believe when I’m with you that there can be anything as still
as solemn as unpleasantly definitive as statuary when right in front of it
in the warm New York 4 o’clock light we are drifting back and forth
between each other like a tree breathing through its spectacles and the portrait show seems to have no faces in it at all, just paint
you suddenly wonder why in the world anyone ever did them

 I look at you and I would rather look at you than all the portraits in the world except possibly for the Polish Rider occasionally and anyway it’s in the Frick which thank heavens you haven’t gone to yet so we can go together the first time and the fact that you move so beautifully more or less takes care of Futurism just as at home I never think of the Nude Descending a Staircase or at a rehearsal a single drawing of Leonardo or Michelangelo that used to wow me and what good does all the research of the Impressionists do them when they never got the right person to stand near the tree when the sun sank or for that matter Marino Marini when he didn’t pick the rider as carefully as the horse  it seems they were all cheated of some marvelous experience which is not going to go wasted on me which is why I am telling you about it

 – Frank O’Hara

photos of the day

May 16, 2011

British artist Tracey Emin stands in front of some of her neon artwork at the Hayward Gallery, in London. The exhibition is her first major exhibition in London, and features key works from all periods of the artist’s career, including seldom-seen early works and more recent large-scale installations.

Kirsty Wigglesworth/AP

The space shuttle Endeavour lifts off from Kennedy Space Center at Cape Canaveral, Florida.

John Raoux/AP

Market Commentary:

Canada

By Matt Walcoff

     May 16 (Bloomberg) — Canadian stocks rose for the first time in five days as gold producers gained amid concern that Europe’s debt woes will worsen and TMX Group Inc. received a new takeover offer.

     Goldcorp Inc., the world’s second-biggest producer of the metal by market value, gained 2.1 percent. TMX Group Inc., the owner of the Toronto Stock Exchange, advanced 5.5 percent after receiving a takeover bid from a group of Canadian banks and pension funds. Quadra FNX Mining Ltd., which produces base metals in the U.S., Canada and Chile, soared 5.8 percent after agreeing to form a joint venture with Sumitomo Metal Mining Co. and Sumitomo Corp.

     The Standard & Poor’s/TSX Composite Index increased 14.19 points, or 0.1 percent, to 13,391.35 at 4:00 p.m. in Toronto.

     “The Toronto market had been oversold,” said David Baskin, president of Baskin Financial Services Inc. in Toronto, which manages about C$8 billion ($8.2 billion). “You’re seeing a bit of a bounce back today. People got so pessimistic on all the commodities. When the commodities-futures guys increased the margin requirements, especially on silver, it may have caused some spillover to the other metals.”

     The S&P/TSX index fell 2.2 percent from May 9 to May 13 on drops in oil, gold and copper and concern inflation may lead to higher interest rates in China. Only the Athens Stock Exchange General Index has dropped more than the S&P/TSX this quarter among developed-market stock benchmarks.

     Gold producers gained today as European finance ministers, meeting in Brussels, pushed Greece to do more to address its debt before receiving more aid. The country should sell assets “before calling for more money,” Austrian Finance Minister Maria Fekter told reporters before the meeting.

     Goldcorp advanced 2.1 percent to C$47.24. Iamgold Corp., which mines in Africa, South America and Quebec, increased 2.4 percent to C$18.65. Yamana Gold Inc., Canada’s fifth-biggest gold producer, climbed 1.2 percent to C$11.60.

     TMX rallied 5.5 percent to C$44.05 after Maple Group Acquisition Corp., which comprises four banks and five pension funds, bid C$48 a share in cash and stock for the exchange owner. TMX agreed in February to a C$39-a-share all-stock bid from London Stock Exchange Group Plc.

     Toronto-Dominion Bank, the largest lender among the Maple investors, increased 0.7 percent to C$82.27. Royal Bank of Canada, the country’s biggest bank, climbed 0.6 percent to C$58.82.

     Base-metal and coal producers rose as copper gained for a third day. Teck Resources Ltd., Canada’s largest company in the industry, advanced 0.8 percent from a six-month low to C$45.19

     SouthGobi Resources Ltd., which mines coal in Mongolia, surged 5.6 percent to C$11.33 after sinking 30 percent in the three months ending May 13. Last week, the company forecast higher sales prices and volumes.

     First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, increased 4.6 percent to C$128.76 as analysts at Citigroup Inc. recommended buying the shares after their 13 percent tumble from April 6 to May 13.

     Quadra FNX climbed 5.8 percent to C$14.48. Sumitomo Metal Mining and Sumitomo Corp. will buy a 45 percent stake and invest $724 million in the Sierra Gorda copper-molybdenum project in Chile.

     Fertilizer producers rose as wet weather delayed spring corn planting in the northern U.S. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 2.1 percent to C$50.96. Agrium Inc. advanced 0.8 percent to C$78.65.

     Sino-Forest Corp. gained 5.6 percent to C$20.27 after the stock was rated “outperform” by BMO equity analyst Stephen Atkinson.

     Home-builder Brookfield Residential Properties Inc. surged 11 percent to C$10.94 after Barron’s said the stock “looks inexpensive relative to both earnings and book value.”

US

By Rita Nazareth

     May 16 (Bloomberg) — U.S. stocks retreated, extending a two-week slump for the Standard & Poor’s 500 Index, as Greece sought additional bailout funds and a report showed that manufacturing growth in the New York region cooled.

     Lowe’s Cos., the second-largest U.S. home improvement retailer, dropped 3.6 percent after cutting its full-year earnings forecast. NYSE Euronext tumbled 13 percent as Nasdaq OMX Group Inc. and IntercontinentalExchange Inc. pulled their takeover bid. AMR Corp. and JetBlue Airways Corp. added at least 4.8 percent after JPMorgan Chase & Co. raised its ratings for the companies, citing prospects for lower fuel costs.

     The S&P 500 dropped 0.6 percent to 1,329.47 at 4 p.m. in New York after gaining as much as 0.4 percent. The Dow Jones Industrial Average slumped 47.38 points, or 0.4 percent, to 12,548.37. The 30-stock gauge declined during the first two weeks of a month for the first time since July 2009.

     “There’s concern about a soft spot,” said Burt White, who helps oversee $284 billion as chief investment officer at LPL Financial Corp. in Boston. “We are starting to see a peak in manufacturing and margins. In addition, there’s the European debt crisis. They’ve been trying to deal with the symptoms, without curing the disease. It’s not an easy fix. The market has had a big run, with both stocks and commodities up a lot. The bigger the party, the tougher the hangover.”

     U.S. stocks fell last week as concern over Europe’s debt crisis deepened and inflation reports spurred speculation global interest rates will rise. Still, the S&P 500 has advanced 5.7 percent in 2011 after 72 percent of the 435 companies that reported results since April 11 topped the average analyst earnings projection, according to data compiled by Bloomberg.

     While the S&P 500 has rallied 5.8 percent since its year- to-date low on March 16, the gains have been led by so-called defensive industries that are thought to hold up better during an economic slowdown. Health-care companies, consumer firms that sell necessities, telephone operators and utilities have risen at least 9.9 percent, the most among 10 industry groups in the S&P 500. Financial and energy companies have been the worst performances.

     European finance chiefs endorsed a 78 billion-euro ($111 billion) bailout for Portugal. Authorities stepped up the pressure on Greece to sell assets and deepen spending cuts to win an increase of its 110 billion-euro ($156 billion) aid package and more time to repay the loans.

     “They are putting a patch on the problem,” said Matthew DiFilippo, director of research at Stewart Capital Advisors LLC in Indiana, Pennsylvania, which manages $1 billion. “I don’t really see there’s a way that they can fix it without a restructuring. Investors are an emotional group of people. I wouldn’t be surprised to see some market strength on efforts to give them a longer lifeline.”

     In deliberations clouded by the absence of International Monetary Fund Managing Director Dominique Strauss-Kahn, Europe’s rich countries also weighed whether to make holders of Greek bonds assume some losses. The IMF named John Lipsky as acting managing director yesterday after Strauss-Kahn was charged with the attempted rape of a New York hotel maid. Strauss-Kahn, 62, has denied the charges and will plead not guilty, his lawyer Benjamin Brafman said.

     Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Greece is the world’s biggest candidate for default.

     “We suggest that Greece is insolvent and that at some point the can cannot be kicked down the road any further,” said Gross in an “InBusiness with Margaret Brennan” interview on Bloomberg Television. “Ultimately debt holders will have to bear some of the burden as well.”

     Stocks also fell as a report showed that manufacturing in the New York region expanded at a slower pace than anticipated in May as the cost of raw materials surged. The Federal Reserve Bank of New York’s general economic index fell to 11.9 from a one-year high of 21.7 in April. Economists in a Bloomberg News survey projected it would drop to 19.6, according to the median forecast. Readings greater than zero signal growth.

     Lowe’s dropped 3.6 percent to $24.84. Economic pressures and bad weather lowered sales, Lowe’s said. Home prices fell in more than three-fourths of U.S. cities in the first quarter, hurt by foreclosures selling at cut-rate prices, the National Association of Realtors said May 10. The decline and rising fuel bills deterred homeowners from undertaking major projects on their houses.                    

     NYSE Euronext tumbled 13 percent to $35.73. Nasdaq and ICE pulled their bid for NYSE Euronext after talks with U.S.

regulators showed they wouldn’t secure antitrust approval, clearing the path for Deutsche Boerse AG. NYSE Euronext agreed to be bought by the Frankfurt-based bourse on Feb. 15, a merger that would create the world’s largest exchange operator. The NYSE board twice rejected a rival proposal from Nasdaq and ICE, saying the unsolicited offer would lead to too much debt and regulatory opposition.

     “It became clear that we would not be successful in securing regulatory approval for our proposal despite offering a variety of substantial remedies,” Bob Greifeld, chief executive officer of Nasdaq, said in a statement.

     AMR gained 4.9 percent to $6.69, while JetBlue rose 5.6 percent to $6.14. JPMorgan raised its recommendation for the carriers to “overweight” from “neutral.”

     UBS AG lifted its estimates for combined profit by companies in the S&P 500 for this year and 2012 on productivity growth, share buybacks, rising oil prices and strength in emerging markets.

     Thomas Doerflinger, a New York-based strategist for UBS, lifted his earnings estimate for 2011 to $101 a share from $96, and to $108 from $104 for next year. Better-than-forecast profit from energy companies account for 68 percent of the increase, he wrote in a note dated today. Profit estimates from technology stocks made up about 30 percent of the boost, he said.

Have a wonderful evening everyone.

Be magnificent!

When the mind and intellect developed, man asked,

Who am I?  Who is it before me?

The search for reality began…

Moving one step towards finding the answer to the question,

Who am I, we brought consciousness from outside to inside.

Wisdom turned the direction of the consciousness within and

we perceived our soul.

The journey of the soul in the outer world was over and the journey within had begun. 

      -Acharya Mahaprajna, 1920-2010

As ever, 

Carolann

Your time is limited, so don’t waste it living

someone else’s life.  Don’t be trapped by dogma –

which is living with the results of other people’s

thinking.  Don’t let the noise of others’ opinions

drown out your own inner voice.  And most

important, have the courage to follow your heart

and intuition.  They somehow already know what

you truly want to become.  Everything else is

secondary.

                -Steve Jobs, 1955-

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends, Friday the thirteenth….Thirteen was regarded as an unlucky number even among the Romans, who held it as a sign of death and destruction.  The origin of the idea that sitting down thirteen at a table is unlucky is said to be that, at a banquet in Valhalla, Loki once intruded, making 13 guests and Balder was slain.  The superstition was confirmed in  Christian countries by the Last Supper of Christ and the 12 apostles.  In the Middle Ages, witch covens were believed always to have 13 members.   The 13^th of any month is widely regarded as an inauspicious day on which to undertake any new enterprise, and it is traditionally thought to be unlucky for a ship to begin a voyage on the 13^th.

In ancient Rome, Friday was called dies Veneris, day of Venus, hence the French Vendredi.  The northern nations adopted the same nomenclature and the nearest equivalent to Venus was Frigg or Freyja, hence Friday (old English frigedoeg).  Friday was regarded by the Norsemen as the luckiest day of the week when weddings took place, but among Christians it has been regarded as the unluckiest, because it was the day of the crucifixion.  Friday is the Sabbath for Muslims, who hold that Adam was created on a Friday and that it was on Friday that Adam and Eve ate the forbidden fruit and on Friday that they died.  It is also held unlucky among Buddhists and  Brahmans.

  In England, it is not unlucky to be born on this day since “Friday’s child is loving and giving.”

  -from Brewer’s Dictionary of Phrase & Fable

photos of the day 

May 13, 2011

The experimental aircraft Solar Impulse takes off for its first international flight to Brussels from the airbase in Payerne, Switzerland. The solar-powered plane has the wingspan of a Boeing 777.

Laurent Gillieron/Keystone/AP

A two-month-old leopard cub peers out of a cage at Suvarnabhumi airport in Bangkok. Thai police arrested a UAE citizen just after midnight as he was preparing to fly first class from Bangkok to Dubai with various rare and endangered animals in his suitcases including four leopards, a Malayan sun bear, a white-cheeked gibbon, a black-tufted marmoset, an Asiatic black bear and two macaque monkeys.

Damir Sagolj/Reuters

Market Commentary:

Canada

By Matt Walcoff

     May 13 (Bloomberg) — Canadian stocks fell for a fourth day, completing a weekly decline, as energy shares retreated after the U.S. dollar strengthened.

     Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, decreased 1.5 percent as the U.S. dollar rose against 15 of 16 other major currencies.

Manulife Financial Corp., North America’s fourth-largest insurer, lost 1.3 percent as a gauge of financial stocks retreated for a third day. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer, advanced 1.5 percent as corn futures advanced.

     The Standard & Poor’s/TSX Composite Index slipped 12.26 points, or 0.1 percent, to 13,377.16, extending its weekly drop to 1.4 percent.

     “Speculative money is being run out of the commodity markets,” said Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, which oversees C$250 million

($259 million).

     The S&P/TSX retreated for a third week for the first time since January 2010. The index decreased 4.2 percent from April 21 through yesterday as oil, copper and silver each plunged at least 10 percent. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.

     The U.S. dollar gained against the euro today after Reuters quoted European Central Bank President Jean-Claude Trichet as saying inflation was at a “peak.” The news service later corrected its story to say Trichet referred to a “hump” in inflation as he had in previous interviews.

     “The catalyst was the remarks that Trichet made this afternoon our time that suggested that growth was not going to be maybe what people had anticipated,” said Laura Wallace, senior manager for a team at Scotia Asset Management that oversees C$11 billion for private clients.

     Canadian Natural fell for a fifth day, sliding 1.5 percent to C$39.41. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, dropped 1.8 percent to C$30.98.

     Petrominerales Ltd., which produces oil and gas in Colombia, slumped 3.9 percent to C$28.89 after Rafi Khouri, an analyst at Raymond James Financial Inc., cut his rating on the shares to “underperform” from “market perform.” In a note to clients, Khouri cited a decline in production.

     Shares of the Bogota- and Calgary-based company have retreated nine straight days.

     Canadian financial shares declined along with U.S. banks amid concern about Europe’s debt crisis.

     Manulife, the owner of John Hancock Financial Service Inc., lost 1.3 percent to C$17.25. Sun Life Financial Inc., Canada’s third-largest insurer, decreased 0.8 percent to C$30.18.

Brookfield Asset Management Inc., Canada’s biggest real-estate company, slipped 0.7 percent to C$31.28.

     Fertilizer producers climbed as corn futures rose on signs demand for U.S. exports is increasing. Potash Corp. gained 1.5 percent to C$49.92. Agrium Inc., Canada’s second-biggest fertilizer producer, advanced 2.2 percent from a seven-month low to C$78.

     Neo Material Technologies Inc., which makes rare-earth and zirconium products, sank 9.4 percent, the most since December 2008, to C$8.69 after saying it will sell $200 million in debt that can be converted into stock.

     Sino-Forest Corp., the largest Canada-based forestry company by market value, tumbled 6.3 percent, the most since June, to C$19.20. In a phone interview, Sino-Forest Chief Financial Officer Dave Horsley said the shares were dropping on speculation the company was late filing first-quarter financial results, which he said was not the case.

US

By Inyoung Hwang

     May 13 (Bloomberg) — U.S. stocks fell, erasing a weekly gain, as CA Inc. led technology shares lower after earnings missed estimates and banks slid amid concern about Europe’s debt crisis and closer government scrutiny.

     CA, the second-largest maker of software for mainframe computers, tumbled 8.6 percent for its biggest drop since 2009.

Nvidia Corp. dropped 11 percent after the company’s rating was cut at Needham & Co., which cited slower growth. Janus Capital Group Inc. lost 4.5 percent to lead financial companies to the biggest decline among 24 industries.

     The Standard & Poor’s 500 Index fell 0.8 percent to 1,337.77 at 4 p.m. in New York, leaving it down 0.2 percent on the week. The Dow Jones Industrial Average dropped 100.17 points, or 0.8 percent, to 12,595.75. Stocks extended losses as the Dollar Index rallied, gaining 0.7 percent.

     “You’re seeing liquidity drain off — people have had a good year so far and rather than get tagged for staying too long at the party, they’re exiting,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $14.8 billion. “With all the liquidity out there needing a home, it’s a tug of war back and forth between inflation fear and a need to keep that money invested.”

     The S&P 500 fell 1.9 percent this month as gauges of energy and raw-material producers slumped with metal and oil prices.

The gauge has still climbed 6.4 percent this year as government stimulus measures and corporate earnings boosted confidence in the economic recovery.

     U.S. data today showed the cost of living climbed in April by 0.4 percent, led by gains in food and fuel prices. That follows a 0.5 percent gain in March.

     Consumer confidence climbed more than forecast in May, with the Thomson Reuters/University of Michigan preliminary consumer sentiment index rising to 72.4, a three-month high, from a final reading of 69.8 in April. The gauge was projected to rise to 70, according to the median forecast of 62 economists surveyed by Bloomberg News. Reports in Europe earlier showed Germany and France powered economic growth in the euro area in the first quarter as booming exports fueled domestic spending in the bloc’s core, offsetting sovereign debt concerns.

     The view that “the West is in trouble” is wrong when nations including Germany, Sweden and Canada are performing strongly, said Jim O’Neill, chairman of Goldman Sachs Asset Management, in a Bloomberg Television broadcast in Hong Kong.

Investors should “stop worrying so much.”

     Germany is waiting for the conclusion of a European and International Monetary Fund mission to Greece before making any decision on whether further steps may need to be taken to help the first victim of the debt crisis, a German government spokesman said.

     Germany, the European Commission and the IMF back an extension of maturities on Greek bonds because of the worsening deficit situation in Greece, Die Welt newspaper reported in an advance copy of an article in tomorrow’s edition, without saying where it got the information.

     “People are fearful that bad news will come out of Europe over the weekend,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “There’s general concern about weekend news that’s keeping a lid on the market.”                  

     Technology companies were the two worst-performing stocks in the S&P 500. Nvidia, the maker of three-dimensional graphics processors, sank 11 percent, the biggest slump in benchmark equity index to $18.26. The company had its rating cut to “hold” from “buy” at Needham & Co., which cited slower growth in its core graphics processing business and increased competition in the tablet computer and smartphone markets, among other things.

     CA erased 8.6 percent to $22.90 for the second-biggest retreat in the S&P 500. The software company posted fourth- quarter sales and profit that missed the average analyst estimates, Bloomberg data show.

     Yahoo! Inc. slumped 3.6 percent to $16.55, the lowest price since April 19. The owner of the largest U.S. Web portal said Alibaba Group Holding Ltd. spun off its Alipay online-payment business to a different company without the knowledge or consent of its board or shareholders.

     Financial stocks declined 1.5 percent, the biggest drop out of 10 groups in the S&P 500, as Republicans on the House Financial Services Committee advanced three bills today to reshape the Consumer Financial Protection Bureau.

     Janus Capital slumped 4.5 percent to $10.91. JPMorgan Chase & Co. slid 2.1 percent to $43.15.

     Republicans are pushing changes to the Dodd-Frank Act, the regulatory overhaul they targeted since taking control of the House in January. Republicans have proposed about a dozen bills to revise the new rules, which they were nearly unanimous in opposing when Dodd-Frank was passed in July.

     Goldman Sachs Group Inc. tumbled 3.5 percent yesterday, the most since January, after the bank was cut to “sell” from “neutral” by Richard Bove, an analyst with Rochdale Securities, who cited pressure on the Justice Department to file a criminal lawsuit against Goldman Sachs.                   

     Consumer-staple and health-care companies were the best performing groups in the benchmark equity index today.

    “The markets are going to struggle,” said Michael Vogelzang, chief investment officer at Boston Advisors LLC, which manages $1.8 billion. “The rotation internally has been away from risk and toward more stability. You’re starting to see staples and health-care outperformance — groups that have underperformed for a significant period of time.”

     JPMorgan’s strategy team, led by Thomas Lee, raised their recommendation for health care to “overweight” from “neutral,” citing improving fundamentals, stable regulatory risk and “attractive” valuations. Aetna Inc. rose 2.4 percent to $43.85, while Cigna Corp. added 1.3 percent to $48.69.

     UnitedHealth Group Inc. and WellPoint Inc. were named in the bank’s list of 18 “best ideas.”

Have a wonderful weekend everyone.

Be magnificent!

The human soul travels from the law to love,

from discipline to freedom,

from the moral plane to the spiritual plane.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Destiny is carried out,

fate is suffered.

-J. Christopher Herold, 1919-1964

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

I just returned from the Bloomberg Canada Economic Summit in Toronto where many of the country’s political and corporate leaders, including the Minister of Finance, James Flaherty, Barrick Gold Chairman Peter Munk, Magna founder Frank Stronach, among many others gave their views on a wide range of topics such as the future of the dollar, where commodity prices are heading, Canadian markets, global government debt ramifications etc., etc.  All in all, it was extremely informative and useful.  More on that topic later.…I’m sending this Newsletter late (Friday morning instead of Thursday night) because my flight got in last night and I bypassed stopping at the office to get this out, truth be told.

May 12^th is Limerick Day, it being the birthday of one of its champions, Edward Lear.  The limerick, which dates from the early 18^th century, has been described as the “only fixed verse form indigenous to the English language.”  It gained its greatest popularity following the publication of Edward Lear’s Book of Nonsense.

There was an Old Man of the coast,

Who placidly sat on a post;

But when it was cold

He relinquished his hold

And called for some hot buttered toast.

photos of the day 

May 12, 2011

Actress Diane Kruger walks the red carpet before the screening of the film ‘Sleeping Beauty,’ at the 64th Cannes Film Festival in France. Twenty films are competing in the May 11 to 22 cinema showcase.

Eric Gaillard/Reuters

A child wears a scarf during a sandstorm in Harbin, Heilongjiang province, China.

China Daily/Reuters

Jessi Miley-Dyer of Australia competes in the women’s Association of Surfing Professionals Billabong Rio Pro championship at Barra da Tijuca beach in Rio de Janeiro.

Sergio Moraes/Reuters

Market Commentary:

Canada

By Matt Walcoff

     May 12 (Bloomberg) — Canadian stocks fell for a third day, led by raw-materials producers, as China raised banks’ reserve requirement for the fifth time this year and wheat futures declined.

     Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, dropped 2.1 percent a day after the U.S. Agriculture Department forecast higher supplies than most analysts had estimated. Eastern Platinum Ltd., which mines in South Africa, plunged 13 percent after saying striking workers sabotaged equipment. BCE Inc., Canada’s largest phone company, rose 2.6 percent after beating analysts’ average profit estimate.

     The Standard & Poor’s/TSX Composite Index fell 30.32 points, or 0.2 percent, to 13,389.42.

     “Some disappointing economic data, coupled with commodity volatility, has essentially created some risk aversion,” said Youssef Zohny, a money manager at Van Arbor Asset Management Ltd. in Vancouver, which oversees C$50 million ($52 million).

     The S&P/TSX dropped 4.9 percent this quarter through yesterday after surging 62 percent in the prior two years. Gold has declined from a record and oil from a 31-month high this month as the U.S. Dollar Index has rebounded after five months of losses. The U.S. currency gained on speculation the European Central Bank will be slower than previously forecast to raise interest rates and that Greece may need to restructure its debt.

     China’s central bank raised reserve requirements to a record 21 percent, effective May 18. The U.S. today reported more initial jobless claims from last week than most economists in a Bloomberg survey had forecast.

     Thirty percent of investors in a Bloomberg Global Poll released today said they intend to reduce commodity holdings.

     Fertilizer producers dropped as wheat declined. Potash Corp. lost 2.1 percent to C$49.17. Agrium Inc., Canada’s second- largest fertilizer producer, slumped 2.4 percent to seven-month low of C$76.31.

     Uranium producers retreated as nuclear regulators met in Europe and the U.S. to discuss power-plant safety. Cameco Corp., the world’s largest producer of the nuclear fuel, decreased 4.9 percent to C$25.37, the lowest price since August. Uranium One Inc., a producer controlled by Moscow-based ARMZ uranium holding, fell 7.6 percent to C$3.65.

     Silver fell 2 percent, extending its monthly tumble to 28 percent. Gold dropped in electronic trading.

     Barrick Gold Corp., the world’s largest gold producer, slipped 0.9 percent to a nine-month low of C$43.44. Eldorado Gold Corp., which mines in China and Turkey, retreated 1.5 percent to C$14.72.

     Sherritt International Corp., which produces coal and industrial metals, rallied 6.1 percent from an eight-month low to C$7.49 as base metals advanced.

     Eastplats plunged 13 percent to 90 Canadian cents, the lowest closing price since July. The company said it has suspended operations at its Crocodile River Mine after members of the National Union of Mineworkers damaged electrical, pumping and ventilation systems.

     Lesiba Seshoka, a National Union of Mineworkers spokeswoman, said by phone that the union is unaware of any property damage at the mine.

     Tim Hortons Inc., Canada’s largest fast-food chain, dropped 4.5 percent, the most since November 2008, to C$45.70 after its first quarter profit trailed the average of 12 analyst estimates by 6.4 percent, excluding certain items.                         

     Finning International Inc., BCE and Linamar Corp. rallied after their earnings beat their average analyst estimates.

     Finning, which says it is the world’s largest Caterpillar dealer, soared 8.5 percent to C$28.08, ending a seven-day streak of losses. BCE, Canada’s biggest phone company, increased 2.6 percent to a 29-month high of C$37.89 after raising its 2011 profit forecast. Linamar, the country’s second-largest auto- parts maker, climbed 5.9 percent to C$21.71.

     Nevsun Resources Ltd., which mines precious and base metals in Africa, rallied 8.3 percent to C$5.36 after Rahul Paul, an analyst at Canaccord Financial Inc., raised his rating on the shares to “speculative buy” from “hold.” In a note to clients, Paul said Nevsun’s first-quarter financial results “demonstrate a smooth ramp-up” of its Bisha mine.

US

By Michael P. Regan and Rita Nazareth

     May 12 (Bloomberg) — U.S. stocks rose and commodities erased losses, while the Dollar Index retreated, as riskier assets recovered from an early slump amid speculation that recent declines were excessive. Treasuries slid after an auction of 30-year bonds drew the weakest demand in six months.

     The Standard & Poor’s 500 Index advanced 0.5 percent to 1,348.65 at 4 p.m. in New York after slumping as much as 0.8 percent. The S&P GSCI Index of commodities climbed less than 0.1 percent after tumbling as much as 2.3 percent. Sugar, hogs and soybeans led gains and oil rose 0.8 percent to $98.97 a barrel.

The Dollar Index, which tracks the currency versus six major peers, lost 0.2 percent to reverse an early gain. Yields on 30- year Treasuries rose four basis points to 4.35 percent.

     Declines in energy and raw material prices yesterday and early today threatened to wipe out a two-day rebound in the S&P GSCI Index from last week’s 11 percent slump, its worst since 2008. Shares of oil and mining companies dragged the S&P 500 last week to its biggest drop since March. Steven A. Cohen, the billionaire founder of hedge fund SAC Capital Advisors LP, said the sell-off in commodity markets makes this a good time to buy stock in energy companies.

     “We’re seeing a reversal of the trend of commodities taking a hit as the dollar rises,” said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages about $3 billion in San Antonio. “There was nothing fundamental about what happened over the last few days. It was just a reversal of a trend. The economic recovery is in place and there will be demand for commodities and riskier assets.”

     The U.S. Oil Fund and Market Vectors Agribusiness ETF attracted more money than any other U.S. exchange-traded fund in the past week following the biggest retreat in commodity prices in more than two years.

     The ETF that tracks the price of oil drew $514.4 million in the past week, according to data from New York-based research firm XTF Inc. The agriculture fund, which tracks the share prices of 46 companies such as Deere & Co. and Syngenta AG, got $500.9 million, the data show.

     Investors “are not yet willing to give up on the weak dollar and inflation trade,” said Nicholas Colas, the New York- based chief market strategist at BNY ConvergEx Group LLC. “They are cycling into agriculture and energy-oriented investments, even though the price action is choppy.”                     

     Energy is “an interesting sector,” SAC’s Cohen said yesterday at the SALT, or SkyBridge Alternatives, Conference in Las Vegas. “I think that energy stocks are discounting oil prices much lower than where we are trading today.”

     The S&P GSCI commodity gauge had rallied 20 percent and the S&P 500 had risen 8.4 percent before last week’s rout. Earlier losses in stocks today came after China moved to curb lending and Cisco Systems Inc. forecast earnings that trailed analysts’ estimates.

     International Business Machines Corp., Merck & Co. and Coca-Cola Co. climbed at least 1.5 percent to lead gains in 21 of 30 stocks in the Dow Jones Industrial Average today.

     Freeport-McMoRan Copper & Gold Inc. and Schlumberger Ltd. rose, reversing declines. Symantec Corp., the world’s biggest maker of security software, climbed 5.2 percent after forecasting higher revenue than analysts estimated. Tyson Foods Inc. added 4.6 percent after the biggest U.S. meat processor announced a stock buyback.

     Goldman Sachs Group Inc. declined the most since January, losing 3.5 percent. Richard X. Bove, analyst at Rochdale Securities LLC, told investors to sell the stock on concern that the Department of Justice faces growing pressure to bring claims against the firm.

     Treasuries extended losses after the government’s $16 billion sale of 30-year bonds. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 2.43, the least since November and down from an average of 2.7 at the past 10 sales. The bonds drew a yield of 4.38 percent, compared with an average forecast of 4.343 percent in a Bloomberg News survey of eight of the Federal Reserve’s 20 primary dealers. The sale was the final of three auctions this week totaling $72 billion.

     In economic data, the Labor Department said jobless claims fell to 434,000 in the week ended May 7, compared with 430,000 claims forecast in a Bloomberg survey. Other reports showed the producer price index increased 0.8 percent, more than estimated, while retail sales increased 0.5 percent, the slowest pace since July.

     The Stoxx Europe 600 Index slid 0.7 percent, the biggest drop in a week. Losses were led by energy and basic-resources companies, with European exchanges closing before the rebound in commodities.                   

     The MSCI Emerging Markets Index fell 1.5 percent, heading for the lowest close since March 29. China’s Shanghai Composite Index retreated for a second day, losing 1.4 percent. South Korea’s Kospi Index sank 2 percent, the biggest drop since March 15. Russia’s Micex Index lost 1.5 percent.

     Global investors have tempered their optimism about the U.S. and world economies and plan to put more of their money in cash and less in commodities over the next six months, a Bloomberg survey found.

     Almost one in three of those questioned say they will hold more cash, while 30 percent intend to reduce investments in commodities, according to a quarterly Bloomberg Global Poll of 1,263 investors, analysts and traders who are Bloomberg subscribers. Both results were the highest since the survey began asking the question last June.

     A plurality — 40 percent — expects oil prices to fall in the next six months, the first time respondents felt that way since the inception of this poll in July 2009.

     Most global investors predict China’s yuan will be convertible into other currencies by 2016, with 50 percent seeing it joining the dollar, yen and euro as a reserve currency within a decade, the Bloomberg poll indicated.

Have a wonderful day everyone.

Be magnificent!

Nature’s law dictates that, in order to survive, bees must work together

As a result, they instinctively possess a sense of social responsibility.

They have no constitution, no law, no police, no religion or moral training but,

because of their nature, the whole colony survives.

We human beings have a constitution, laws and a police force.

We have religion, remarkable intelligence, and hearts with a great capacity to love.

We have many extraordinary qualities but, in actual practice,

I think we are behind those small insects.

In some ways, I feel that we are poorer than the bees.

-His Holiness, the XIVth Dalai Lama

As ever,

 Carolann

 The dictionary is the only place

that success comes before work. 

Hard work is the price we must pay

for success.  I think you can

accomplish anything if you’re

willing to pay the price.

        -Vince Lombardi, 1913-1970

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

There is always music amongst the trees in the garden, but our hearts must be still to hear it.

 

 

Space photos of the day: Spitzer Space Telescop

This new view of the North America nebula obtained on Feb. 16 combines both visible and infrared light observations, taken by the Digitized Sky Survey and NASA’s Spitzer Space Telescope, respectively, into a single vivid picture. The nebula is named after its resemblance to the North American continent in visible light, which in this image is represented in blue.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actress Melanie Laurent poses during a photo call in Cannes, France. Laurent will be the master of ceremonies for the opening ceremony of the 64th Cannes Film Festival which runs from May 11 to 22nd

Market Commentary:

Canada

By Matt Walcoff

Canada’s dollar snapped three days of gains against the greenback as crude oil slid after a report showed U.S. inventories rose to a two-year high and stocks fell, sapping demand for higher-yielding assets.

The loonie, as the Canadian dollar is also known for the image of the aquatic bird on the C$1 coin, weakened a day after Finance MinisterJim Flaherty said the government wants to avoid extreme currency fluctuations. Two-year government bonds rose after an auction of the debt.

“The primary driver for the decline in the Canadian dollar is the midmorning selloff in oil,” said George Davis, Toronto- based chief technical analyst for fixed-income and currency strategy at Royal Bank of Canada. “That points to a risk-off environment, which tends to be negative for the Canadian dollar.”

The loonie depreciated 0.5 percent to 96.19 cents versus the greenback at 5 p.m. in Toronto, from 95.68 cents yesterday. One Canadian dollar buys $1.0396. The currency touched 94.46 cents on April 29, the strongest level since November 2007.

Crude oil for June delivery fell 5.1 percent to $98.60 a barrel. The Standard & Poor’s 500 Index slid 1.1 percent. The S&P/TSX Composite Index dropped 1.6 percent.

Supplies of crude in America, Canada’s biggest trading partner, jumped by 3.78 million barrels to 370.3 million in the week ended May 6, the U.S. Energy Department said. The median forecast of 16 analysts in a Bloomberg News survey was for inventories to climb by 1.5 million barrels. The increase puts supplies at the highest level since May 8, 2009.

Loonie Versus Euro

The loonie advanced 1 percent to C$1.3652 against the euro on speculation Greece may restructure its debt while Canada’s economy grows stronger. The Canadian currency touched C$1.3636, the strongest level since April 1.

“In the context of trouble in the euro region, we’re seeing flows into Canada,” said Rahim Madhavji, president at Knightsbridge Foreign Exchange Inc. in Toronto. “Canada has what everyone wants. It has a sound and growing economy and fiscal prudence.”

Canadian employers added a net 58,300 jobs in April after a decrease of 1,500 in the previous month, Statistics Canada reported last week. The median forecast of 25 economists in a Bloomberg News survey was for an increase of 20,000. The jobless rate unexpectedly dropped to 7.6 percent.

The nation reported a fourth straight trade surplus in March, the longest stretch since November 2008 and a sign that exporters are recovering from the global recession.

Trade Surplus

The surplus widened to C$627 million ($658 million), Statistics Canada said today, larger than the C$400 million median forecast in a Bloomberg survey of 21 economists. The agency also raised the combined total surplus for the prior two months by C$1.33 billion.

The Conservative Party will use its election victory last week to ensure the nation erases its budget deficit in three years, Flaherty said yesterday at the Bloomberg Canada Economic Summit in Toronto.

While Flaherty said a strengthening currency is a reflection of confidence in the Canadian economy, he added that the government wants to avoid “jerky” movements in the Canadian dollar and said the government wouldn’t intervene in currency markets without an extreme cause. Flaherty also said he doesn’t want to see increasing “weakness” in the U.S. dollar.

A gain today in two-year Canadian government bonds pushed the yield down three basis points, or 0.03 percentage point, to 1.69 percent. The price of the 1.75 percent security maturing in March 2013 increased 5 cents to C$100.10.

Canada sold C$3.5 billion ($3.7 billion) of two-year debt, drawing an average yield of 1.873 percent. The government received bids of C$8.8 billion for the 2 percent securities maturing in August 2013, according to a statement on the Bank of Canada’s website.

Canadian Finance Minister Jim Flaherty said his governing Conservative Party will use its decisive election victory last week to ensure the nation erases its budget deficit in three years.

Speaking at the Bloomberg Canada Economic Summit, Flaherty said the Conservatives will introduce a budget next month that will forecast a balance by 2014, even as the country moves ahead with planned corporate income tax cuts to help sustain the expansion.

“We have a majority government in Canada now,” Flaherty said late yesterday in Toronto. “Businesses can rest assured we will stay on track.”

Prime Minister Stephen Harper won a majority of seats in Parliament for the first time on May 2, giving him a mandate to bolster the economic recovery with additional tax cuts and erase the deficit with curbs on government spending.

The Conservatives’ election victory ended seven years of minority governments that have fueled government spending, and put the party in control of the federal agenda for the first time since the early 1990s.

Harper pledged to balance Canada’s budget with a review of government spending to find C$4 billion ($4.3 billion) in annual savings. TheConservative platform, which commits to reintroduce measures from the 2011 fiscal plan that wasn’t passed before the election was called, projects a C$2.8 billion surplus in the fiscal year that begins April 2014.

Re-introduce Budget

The government will re-introduce the budget that was rejected by opposition parties before the May 2 election, with some minor adjustments, Flaherty said yesterday.

Flaherty spoke a week after investors knocked $99 billion off the value of commodities, products that are among Canada’s biggest exports. The Bloomberg Canada Economic Summit featured 11 panels including Frank Stronach, the founder of Aurora, Ontario-based Magna International Inc. (MG), Peter Munk, chairman of Toronto based Barrick Gold Corp., and Donald Guloien, CEO of Toronto-based Manulife Financial Corp. (MFC)

Goldcorp Inc. Chairman Ian Telfer said at the summit he expects commodity prices to rise this year. He said he is “bullish” on the price of gold, which he said will reach $2,000 per ounce by the end of 2011. He also predicted copper averaging $4 to $4.50 per pound and uranium around $65 to $70 per pound over the same period. His Vancouver-based company is the world’s second-largest producer of gold.

Canada is the only G-7 economy that is a major exporter of commodities.

Not Draconian

Eliminating the budget deficit is a priority and Canada won’t make “draconian” moves to reduce it, Flaherty said separately in a Bloomberg Television interview, adding he wanted to ensure sustainable economic growth that he estimated at about a 3 percent annual rate this year and next. Other Group of Seven countries must also deal with their deficits and debt, he said in the interview.

Flaherty has been finance minister since 2006 without the government holding a majority, meaning he’s had to rely on support from opposition lawmakers to pass laws. Under Flaherty, program expenditures have increased by 40 percent to C$245 billion as he sought to placate opposition parties and win favor with voters.

“One of the realities of minority governments is you have to run two tracks at the same time,” Flaherty said referring to the need to formulate policy while ensuring at the same time the government can retain power.

“It makes planning very difficult,” he said.

Income Splitting

The Conservative government’s most expensive pledge during the campaign was a measure that would let families with children under 18 split up to C$50,000 in income for tax purposes. It would come into effect in 2014 and cost C$4 billion through March 2016.

The Conservative platform also budgets C$2.2 billion in compensation to Quebec for harmonizing its sales tax with the federal government. There is also new funding for the Canadian Coast Guard, crime legislation, fishing and agriculture.

The Conservative platform projects a 2011-12 deficit of C$30.3 billion, C$20.1 billion in 2012-13, and C$7.7 billion in 2013-14. The federal government’s fiscal year begins April 1.

While Flaherty said a strengthening currency is a reflection of confidence in the Canadian economy, he added the government wants to avoid “jerky” movements in the Canadian dollar, and said the government wouldn’t intervene in currency markets without an extreme cause. Flaherty also said he doesn’t want to see increasing “weakness” in the U.S. currency. The Canadian government has proposed legislation for the country’s covered bond market to increase disclosure for investors while setting minimum standards in the C$30 billion ($31 billion) market.

The proposals include a framework for bond issuance and establishing an agency that would oversee the rules, the Department of Finance said today in a discussion paper on its website. The Canadian government pledged to set up legislation governing the covered bond market in its 2010 budget.

The government is proposing that borrowers set up a separate special purpose vehicle to hold the assets that back the covered bonds. The assets would be sold by the issuing company to the separate entity, according to the proposed legislation.

Canadian banks have issued more than C$30 billion in covered bonds since 2007, tapping a market that dates back 230 years in Europe. In comparison, the outstanding stock of Canada Mortgage Bonds is about C$170 billion.

Comments on Canada’s proposals should be received by June 10, the finance department said.

Covered bonds are typically backed by mortgages or public- sector loans and the collateral underlying the debt remains with the borrower, which also guarantees the debt.

US

By Rita Nazareth – May 11, 2011 1:57 PM PT

U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline since March, as commodities tumbled amid a strengthening dollar and concern that accelerating global inflation may curb economic growth.

Freeport-McMoRan Copper & Gold Inc. (FCX) and Halliburton Co. (HAL) fell at least 4 percent as data from China raised expectations about higher interest rates. Yahoo! Inc. dropped 7.3 percent on concern that its stake in a Chinese Internet business may lose value after a transfer of ownership in the company’s online payment business. Walt Disney Co. (DIS), the biggest theme-park operator, slumped 5.4 percent after profit missed estimates.

The S&P 500 dropped 1.1 percent to 1,342.08 at 4 p.m. in New York, snapping a three-day rally. The Dow Jones Industrial Average slid 130.33 points, or 1 percent, to 12,630.03. Oil fell below $100 as a report showed that U.S. supplies surged.

“Inflation seems to be rearing its ugly head,” said Cliff Remily, a money manager at Santa Fe, New Mexico-based Thornburg Investment Management, which oversees $80 billion. “Some countries are raising interest rates as a way to combat inflation. That’s putting pressure on stocks. We’ve got a lot of the consumer staples. These are the companies you want to be in this kind of environment. We’ve avoided materials.”

The S&P 500 has fallen 1.6 percent this month, as gauges of energy and raw-materials producers have slumped at least 4.3 percent. Indexes of companies less-tied to economic growth, including utilities, health care, consumer staples and phone, outperformed the benchmark. The S&P 500 is still up 6.7 percent this year amid government stimulus measures and higher-than- estimated corporate profits.

Inflation in China

Global stocks and commodities prices fell as figures showed inflation in China stayed above the government’s target, stoking concern about further monetary tightening that may curb demand. Chinese inflation remained higher than 5 percent in April and lending exceeded analysts’ estimates.

The pound rose as Bank of England Governor Mervyn King said inflation remains “uncomfortably high” and officials signaled they may raise rates later this year. Reports showed growth in prices in Germany topped estimates and Poland unexpectedly increased its benchmark rate.

“Governments around the world will be a little less accommodative,” said Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York. “People are concerned that we may see slower growth because of that. In addition, we’re seeing some unwinding of that trade of people buying commodities and the euro, while selling the dollar.”

Euro Slides

The euro slipped against the majority of its most-traded peers on speculation European leaders are slowing the drive to grant Greece additional aid, fueling concern the nation may be forced to restructure its debt. German Chancellor Angela Merkel said yesterday that Greece needs to stay the course on budget cuts to deserve an extension of the 110 billion-euro ($158 billion) lifeline granted last year.

The MSCI All-Country World Index of shares in 45 nations fell 0.6 percent. The Thomson Reuters/Jefferies CRB Index of commodities slumped 3 percent.

Energy and raw-material producers had the biggest declines within 10 S&P 500 groups, falling at least 2.7 percent. Freeport, the world’s largest publicly traded copper producer, dropped 5.6 percent to $48.27. Halliburton, the second-largest oilfield services provider, fell 4.1 percent to $46.43.

CME Suspends Trading

CME Group Inc. (CME) suspended trading of gasoline, crude and heating oil on the Nymex for five minutes starting at 12:06 p.m., said Laurie Bischel, a spokeswoman for the exchange in Chicago. Trading was stopped after June-delivery gasoline fell 25 cents, the daily limit. Limits were widened to 50 cents a gallon for gasoline and heating oil and $20 a barrel for crude.

Equities also fell after the U.S. trade deficit widened more than forecast in March as the highest oil prices in more than two years boosted imports, eclipsing record exports. The trade gap rose 6 percent to $48.2 billion, the biggest since June, from $45.4 billion in February, the Commerce Department reported. The median forecast of 72 economists surveyed by Bloomberg News projected it would widen to $47 billion. Sales abroad climbed by the most in 17 years.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, jumped 6.5 percent to 16.95.

‘Lighten Up’

“Lighten up on risk-taking now and don’t wait for October 1 as previously recommended,” Jeremy Grantham, the chief investment strategist for Boston-based Grantham, Mayo, Van Otterloo & Co., which manages more than $108 billion, wrote in a report today. The S&P 500 “may still get to 1,500 before October, but I doubt it, especially without a QE3,” he wrote. “And whether it will reach 1,500 or not, the environment has simply become too risky.”

The S&P 500 has rallied 26 percent since Fed Chairman Ben S. Bernanke suggested on Aug. 27 that he would pursue a second round of asset purchases to stimulate the economy, a tactic known as quantitative easing.

Yahoo fell 7.3 percent to $17.20. The payment business of Alibaba Group Holding Ltd., which is partly owned by Yahoo, was restructured so that a different company now holds 100 percent of its outstanding shares.

The transfer may diminish the value of Yahoo’s holding in Alibaba, Jordan Rohan, an analyst at Stifel Nicolaus & Co. in New York, wrote in a research note. In a worst-case scenario, profit from the payment business could be diverted to the new entity, away from Alibaba Group, he wrote.

Park Shortfall

Walt Disney declined 5.4 percent, the most in the Dow, to $41.52. The world’s biggest theme-park operator reported less second-quarter profit than analysts estimated as a shrinking box-office, a park shortfall and the Japanese tsunami overshadowed gains in TV.

Macy’s Inc. (M) jumped 7.7 percent to $28.36. The retailer reported first-quarter earnings that exceeded analysts’ estimates and increased its annual profit forecast as sales accelerated faster than expected.

Intel Corp. (INTC) gained 1.7 percent to $23.41. The world’s largest chipmaker raised its dividend for the second time in six months as increasing corporate spending on technology boosts its earnings. The quarterly payout rises 16 percent to 21 cents a share. On Nov. 12, it raised the dividend to about 18 cents.

Deutsche Bank AG’s Bankim Chadha boosted his profit estimates for companies in the S&P 500 for 2011 and 2012, citing first-quarter profit margins and sales that have beaten estimates. Combined earnings by stocks in the benchmark gauge this year will be $99 a share, up from an earlier forecast of $96, Chadha wrote in a note dated yesterday. Profit in 2012 will be $106 a share, a $4 increase from his previous prediction.

Earnings-per-share have beaten analyst estimates at 72 percent of the 425 companies in the S&P 500 that reported results since April 11.

Be magnificent!

Warm Regards,

Summer for Carolann

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

Senior Vice-President &

Senior Investment Advisor