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Dear Friends,  the flowers are blooming…and another day has come upon us.

Space photos of the day: Looking deeper 

NASA’s Moon Mineralogy Mapper, an instrument on the Indian Space Research Organization’s Chandrayaan-1 mission, took this image of Earth’s moon. It is a three-color composite of reflected near-infrared radiation from the sun, and illustrates the extent to which different materials are mapped across the side of the moon that faces Earth. Small amounts of water were detected on the surface of the moon at various locations. This image illustrates their distribution at high latitudes toward the poles.

Bring sunshine into your spring shade garden with Hylomecon japonica, a small perennial woodland plant that will bode well in our climate.

 

 

 

 

 

 

 

 

 

 

 

 

Market Commentary:

Canada

By Matt Walcoff

Canada’s economy is seen by economists as able to withstand any weakness in commodity prices as it taps strengths that include political stability and the best fiscal outlook of any Group of Seven country.

Prime Minister Stephen Harper’s election victory last week allows him to move ahead with his deficit-cutting plans, and provide certainty in policy making that will help support Canada’s currency, said David Rosenberg, chief economist at Gluskin Sheff + Associates in Toronto.

“Canada as an attractive place to invest transcends the commodity story and a lot of that has to do with political stability and fiscal integrity,” Rosenberg said in a telephone interview, adding “the long-term trend line” for commodities “is still pointing up.”

Jim Flaherty, Harper’s finance minister, will speak today at the Bloomberg Canada Economic Summit in Toronto, in his first major remarks following an election that came the same week investors knocked $99 billion off the value of commodities. Other speakers include Frank Stronach, the founder of Aurora, Ontario-based Magna International Inc., Peter Munk, chairman of Toronto-based Barrick Gold Corp. (ABX), and Donald Guloien, CEO of Toronto-based Manulife Financial Corp. (MFC)

The Bloomberg Canada Economic Summit will feature 11 panels with topics ranging from the outlook for Canadian equities, to the global influence of Canada’s banks, to the climate for foreign investment.

Major Commodity Exporter

The Standard & Poor’s GSCI Index of 24 raw materials fell 11 percent last week, the most since December 2008, as slower growth in U.S. services and fewer German manufacturing orders stoked concern the economic recovery is faltering. The index rose as much as 2.8 percent yesterday after Goldman Sachs Group Inc. said commodities may recover.

Canada is the only G-7 economy that is a major exporter of commodities. Canada is the biggest foreign supplier of oil to the U.S., and as recently as January was supplying the country with twice what Saudi Arabia does.

“Commodities have cooled off but I don’t necessarily see that this is a horrible thing long-term,” said Stephen Lingard, senior vice president of Franklin Templeton Multi-Asset Strategies in Toronto, which oversees about C$8.3 billion ($8.6 billion) in assets. “Even producers don’t want to see oil at $130, $140 or $150 a barrel because it will begin to weigh on some of these big export markets from a demand scenario.”

Canadian Dollar

Since May 2, Canada’s dollar has gained 2 percent against the euro, while declining against the U.S. dollar like most other major currencies. The currency appreciated 0.1 percent to 96.08 cents versus the U.S. dollar at 10:51 a.m. in Toronto, from 96.18 cents yesterday. One Canadian dollar buys $1.0480. “If we get down close to par on the Canadian dollar I think it’s going to become a screaming buy” in the longer term, Rosenberg said.

The victory by Harper, 52, came three weeks after the International Monetary Fund predicted the world’s 10th largest economy will expand 2.8 percent this year, while inflation will end the year near the Bank of Canada’s 2 percent target. An average unemployment rate of 7.6 percent will be bettered only by Japan and Germany in 2011. Canada’s net debt, a measure of indebtedness that takes into account the value of assets such as government pension funds, is the lowest in the G-7 and half the level in the U.S.

Political Certainty

Certainty in policy making sets Canada apart from other major industrialized countries, Rosenberg said. The U.K. and Germany are run by coalition governments, French President Nicolas Sarkozy and Japan’s Prime Minister Naoto Kan have become unpopular with their electorates, while in the U.S., Democratic President Barack Obama must negotiate with a Republican-run House of Representatives.

“Canada is viewed as a bastion of political stability,” Rosenberg said.

Harper’s Conservatives won 167 districts, above the 155 needed to take control of the 308-seat legislature.

“You can do away with some of that uncertainty with respect to Canadians being sent back to the polls on a fairly regular basis, so we have a better outlook for fiscal spending from this side,” said David Tulk, Chief Macro Strategist at TD Securities in Toronto. Canada’s fiscal health is “night and day” compared with the “situation to the U.S. and many other developed markets.”

Weathering Recession

Canada weathered the financial crisis better than the rest of the G-7 even as pressures from abroad tipped it into recession and sent its jobless rate to a four-year high of 8.7 percent in August 2009. Toronto-based Royal Bank of Canada and the country’s other 20 banks received no public money during the credit turmoil, and the country’s financial regulations have inspired regulatory overhauls elsewhere.

Harper pledged during the campaign a review of government spending to find C$4 billion in annual savings, which would be used to balance the budget in three years and finance election promises. Control of the legislature may make it easier for him to move ahead with spending curbs, said Mark Chandler, head of Canadian currency and rates strategy at Royal Bank of Canada’s RBC Capital Markets in Toronto.

“I suspect the end game for this is to try to get down the deficit a little bit quicker,” Chandler said in a May 3 telephone interview. “You probably have more scope to do that under a majority government.”

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

The Conservative 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.

US

Mexican President Felipe Calderon said he’s “very comfortable” with the peso’s strength and inflation remains under control even as the economy grows faster this year than the government previously expected.

Calderon, in an interview, said a 6.7 percent rally in the currency this year is a “natural phenomenon” stemming from near-zero interest rates in the U.S. Stress tests performed by the nation’s banks indicate Mexico will be able to withstand any “hard movements” in global capital flows if rates in the U.S. rise or the European Union’s debt crisis expands, he said.

“If you analyze the beginning of the crisis until now Mexico’s peso is probably the currency that has appreciated the least,” Calderon said in an interview at Bloomberg’s headquarters in New York. “I feel very comfortable.”

Even as growth in Latin America’s second-biggest economy accelerates, policy makers have bucked a regional trend of rising interest rates and kept borrowing costs at a record-low 4.5 percent for more than a year. Inflation in April quickened to 3.36 percent, nearly half the 6.51 percent rate in Brazil.

The peso extended gains and rose 0.4 percent to 11.5621 per dollar at 3:08 p.m. New York time. The Mexican currency gained 6.7 percent this year to date, matching the gains by the Colombian peso, the best performer among seven Latin American currencies tracked by Bloomberg.

Calderon said that Mexican economic growth quickened to more than 5 percent in the first quarter from 4.6 percent in the fourth, and stands to gain considerably from an even mild recovery in the U.S. The Mexican president said manufacturing, especially of automobiles, jumped 50 percent last year as a result of stronger exports to the U.S., which buys 80 percent of the country’s sales abroad.

U.S. Demand

“The demand in the United States looks to me like it’s starting to recover — not enough, and my perception is that the American economy will suffer,” said Calderon. “However, even with a very small growth in the demand sector, it will be very positive for us.”

Mexico’s economy should grow 4.3 percent this year, more than a previous government estimate of 3.9 percent, Calderon said. The International Monetary Fund and private economists expect gross domestic product to expand by as much as 5 percent in 2011, he said. Mexico’s GDP grew 5.5 percent in 2010.

Calderon said he’s fighting monopolies and seeking to open the oil industry to more private investment to improve Mexico’s competitiveness. Antitrust legislation he signed yesterday aims to end “monopolistic behavior” by big companies including ones in the telecommunications industry owned by billionaire Carlos Slim, the Mexican president said.

Slim

While many of Slim’s companies follow “good practices” there are “big enterprises” in Mexico, including in telecommunications, that need to be better regulated for anti- competitive behavior, Calderon said.

“I really respect Carlos Slim, or any other Mexican enterprise,” he said. “But at the same time, I am the authority and I need to regulate the market in order to avoid monopolistic practices.”

In addition to tougher legislation, the Supreme Court ruled this month that Slim’s wireless carrier and biggest company by market value, America Movil SAB, can’t use injunctions to stave off cuts in the fees it charges competing carriers to connect calls. The ruling may let rivals reduce prices for consumers.

Calderon said he would consider selling shares in state- owned oil producer Petroleos Mexicanos as part of a bill he plans to submit to “modernize” the company and arrest six years of declining production.

Petrobras, Statoil Models

New legislation Calderon plans to present to Congress which convenes in September would seek to remake Pemex along the lines of Brazil’s Petroleo Brasileiro SA (PETR4) or Norway’s Statoil ASA (STL), he said.

“That could be an alternative,” said Calderon, when asked about a possible share sale for Pemex, in the Bloomberg Television interview.

Pemex, Latin America’s largest oil producer, is offering foreign oil companies performance-based contracts as it seeks technologies to extract oil from mature fields and stem six straight years of declines.

“My plan is to try another legal reform in order to modernize Pemex in a way similar to what Petrobras did 10 years ago,” said Calderon, a former energy minister. “It’s going to be difficult, but I think we are moving the perception of public opinion of how important it is to modernize the enterprise.”

Be magnificent! 

Warm Regards,

Summer for Carolann

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,  I saw an amazing film at the UVic cinema on Saturday night.  It is director Xavier Beauvois’s 2010 film Of Gods and Men which is the true story of a group of French Trappist monks living in a remote village in the Algerian mountains in the 1990’s.  The story is haunting and the music is mesmerizing.  It is truly an unforgettable film so do try to see it sometime.

From The Globe & Mail:  “Last month, the Boston Globe reports, Britain’s Astronomer Royal  Sir Martin Rees told a gathering at The Royal Institution of Great Britain: ‘Our sun formed 4.5 billion years ago, but it’s got six billion more before the fuel runs out.  It won’t be humans who witness the sun’s demise.  It will be entities as different from us as we are from a bug.’”

Jay Leno

Prince William and Kate Middleton are now planning their honeymoon.  They say they want to go somewhere where they can have complete privacy and be assured that no one in the country would give away their location.  So I think they’re going to Pakistan.

David Letterman

Well, the Republicans were so pleased by the Osama bin Laden raid that today, they granted President Obama full citizenship.

Jimmy Fallon

President Obama is going to host a poetry night at the White House next week.  Obama will recite some Yeats, Hillary will recite some Frost, and Biden will recite some Seuss.

 Today’s Lyrics

With your kiss my life begins,

You’re spring to me, all things to me,

Don’t you know, you’re life itself.

    -David Bowie, Wild is the Wind

photos of the day

May 9, 2011

A worker sets up a giant canvas of the official poster of the 64th Cannes Film Festival, featuring US actress Faye Dunaway, on the facade of the Festival Palace in Cannes, France. The Cannes film festival runs from May 11 to 22.

Eric Gaillard /Reuters

Shaven-headed young boys wearing 3-D glasses touch smart phones at SK Telecom Ubiquitous Museum in Seoul, South Korea. A group of children entered the main temple of Korean Buddhism’s Chogye Order to experience a monk’s life for a month to celebrate Buddha’s birthday on May 10.

Lee Jin-man/AP

Market Commentary:

Canada

By Matt Walcoff

     May 9 (Bloomberg) — Canadian stocks rose for a second day, led by raw-materials and energy producers, as an index of commodities rebounded from its biggest weekly drop since 2008.

     Goldcorp Inc., the world’s second-biggest gold producer by market value, increased 2.2 percent as precious metals rallied.

Suncor Energy Inc., Canada’s largest oil and gas producer, climbed 1 percent as oil gained the most in two months. Forzani Group Ltd., Canada’s largest sporting-goods retailer, soared 49 percent after agreeing to be bought by Canadian Tire Corp.

     The Standard & Poor’s/TSX Composite Index gained 110.53 points, or 0.8 percent, to 13,677.13.

     “Things got overdone in the short term,” said Doug Davis, vice chairman of Davis-Rea Ltd. in Toronto, which manages C$450 million ($465 million). “The economy is still recovering, both in Canada and the U.S.”

     The S&P/TSX fell 2.7 percent last week as the Thomson Reuters/Jefferies CRB Commodity Price Index plunged 9 percent.

Precious metals dropped as CME Group Inc., the owner of the Comex exchange, raised the amount of cash that must be deposited when borrowing from brokers to trade silver futures. Fuels declined after the U.S. reported a decline in gasoline consumption and increase in natural gas inventories.

     Producers of precious metals gained today as investors speculated last week’s 4.2 percent retreat in gold and 27 percent tumble in silver were overdone.

Barrick Gold Corp., the world’s largest producer of the metal, advanced 1.2 percent to C$45.96. Goldcorp increased 2.2 percent to C$48.42. Silver Wheaton Corp., Canada’s fourth- biggest precious-metals company by market value, climbed 2.4 percent to C$35.47. First Majestic Silver Corp., which mines in Mexico, jumped 8.1 percent to C$19.02.

     Crude oil, which sank 15 percent last week, rose 5.5 percent today after Germany said exports advanced to a record last month.

     Canadian Oil Sands Ltd., the largest owner of the Syncrude project, increased 3.2 percent to C$31.85. Suncor advanced 1 percent to C$40.66. Oilfield-services company Flint Energy Services Ltd. soared 12 percent, the most since June 2009, to C$15.47 before the release of its first quarter financial results.

     Contract driller Ensign Energy Services Inc. climbed 4 percent to C$17.71 after reporting first-quarter earnings that beat the average of 10 analyst estimates by 36 percent, excluding certain items.

     Nexen Inc., an oil and gas producer with operations on five continents, declined 2.7 percent to C$23.14. The company said it has suspended operations in Yemen due to a strike and that its North Sea Buzzard oil field is operating at reduced rates due to problems with the platform’s cooling system.                       

 Industrial-metals producers rose as copper rallied from a five-month low.

     First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, gained 3.1 percent to C$127.50.

Ivanhoe Mines Ltd., which is developing a copper and gold mine in Mongolia with Rio Tinto Group, advanced 5.7 percent to C$24.67. Taseko Mines Ltd., which produces copper in British Columbia, jumped 5.2 percent to C$4.90.

     Molybdenum Producer Thompson Creek Metals Co. sank 5.2 percent to a seven-month low of C$10.30 after cutting its 2011 production forecast.

     Copper Fox Metals Inc., which is developing a base- and precious-metals project in British Columbia, jumped 18 percent to C$2.38. On May 6, two federal-government agencies said a proposed power line to the region “is not likely to cause significant adverse environmental effects.”                     

     Forzani surged a record 49 percent to C$26.25 after agreeing to be bought by Canadian Tire, the country’s largest general-goods retailer, for C$26.50 a share in cash. Canadian Tire rose 2.7 percent to C$60.19.

     Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, increased 1.6 percent to C$52.62 as corn and wheat rose. Viterra Inc., Canada’s biggest grain handler, climbed 3.8 percent to C$11.50.

     Manulife Financial Corp., North America’s fourth-largest insurer, rose 1.4 percent to C$17.71 after surging 5.1 percent May 6. On May 5, the company reported first-quarter profit that topped the average analyst estimate by 56 percent, excluding certain items.

     BlackBerry maker Research In Motion Ltd. fell 2.6 percent from a four-year low to C$43.39 after T. Michael Walkley, an analyst at Canaccord Financial Inc., reduced his 12-month price estimate on RIM’s U.S.-traded shares to $49 from $61. In a note to clients, Walkley cited RIM’s market-share losses to Apple Inc.’s iPhone and smartphones using Google Inc.’s Android operating system.

US

By Rita Nazareth

     May 9 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a second straight day, as commodity prices rebounded from the biggest weekly drop since 2008 and McDonald’s Corp. rallied after sales topped estimates.

     Newmont Mining Corp. and Halliburton Co. added at least 1.7 percent as oil halted a five-day retreat and metal prices climbed. McDonald’s, the world’s biggest restaurant chain, increased 0.8 percent as smoothies and McCafe beverages drew U.S. customers in April. Dollar Thrifty Automotive Group Inc. surged 14 percent as Hertz Global Holdings Inc. made a $2.08 billion offer. Citigroup Inc., the most-traded U.S. stock in 2011, slumped 2.3 percent following a 1-for-10 reverse split.

     The S&P 500 rose 0.5 percent to 1,346.29 at 4 p.m. in New York. It snapped a four-day slide on May 6 amid stronger-than- forecast growth in jobs. The Dow Jones Industrial Average climbed 45.94 points, or 0.4 percent, to 12,684.68 today.

     “Commodities look oversold as we get more evidence that the economy is rebounding,” said Peter Jankovskis, who helps manage about $2.8 billion at Oakbrook Investments in Lisle, Illinois. “The jobs report we got on Friday and McDonald’s sales provided further evidence that the recovery is in place.

The equity market is in a reasonable position given where earnings are.”

     The S&P 500 fell 1.7 percent last week following a rout in raw materials that knocked off $99 billion of market value from commodities. The S&P 500 was still up 7.1 percent this year amid government stimulus measures and higher-than-projected corporate profits. Earnings-per-share have beaten analyst estimates at 72 percent of the 421 companies in the S&P 500 that reported results since April 11, Bloomberg data show.

     U.S. trading slowed following Citigroup’s reverse stock split. The bank accounted for 6 percent of U.S. trading in 2011 through last week, with average daily volume of 464.8 million shares, according to data compiled by Bloomberg. Volume on exchanges today totaled less than 5.8 billion shares, second only to the day after Easter as the slowest trading day of the year. Citigroup slumped 2.3 percent to $44.16.

     “We’ve seen anemic volume,” said Bruce McCain, who oversees $22 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “A reverse stock- split reminds you of how much you can lose when a stock craters.

It probably shifts a little bit of the buying that might otherwise have gone into Citigroup, particularly for those who like to purchase low-priced shares in the hopes of rebound.

Those investors will probably refocus on other parts of the market.”

     Commodities rose, with the S&P GSCI Index of raw materials up 3.6 percent in its biggest gain since 2009 after plunging 11 percent last week, amid signs that an improving U.S. economy may boost raw-material demand and on speculation last week’s selloff was excessive.

     Gauges of stocks of energy and raw-material producers rallied at least 1.5 percent, the two biggest gains in the S&P 500 within 10 industries.

     Newmont Mining, the largest U.S. gold producer, added 1.8 percent to $54.68. Halliburton, the world’s second-largest oilfield services provider, rose 3 percent to $48.06.

     U.S. oil companies’ profits have grown so fast that they’ve become the cheapest equities in the S&P 500, just as the debate about taxing crude producers heats up.                       

     Energy suppliers in the S&P 500 have earned $481.1 billion since 2006, more than last year’s gross domestic product of Argentina, according to data compiled by Bloomberg. The 41 drillers, refiners and oilfield service providers may generate another $134.8 billion in 2011, based on analyst estimates that jumped 8.5 percent in April. The growth reduced valuations to 11.5 times projected income from 13.7 in March.

      McDonald’s gained 0.8 percent to $79.31. The world’s biggest restaurant chain said sales at stores open at least 13 months rose 6 percent in April as smoothies and McCafe beverages drew customers in the U.S. Analysts projected comparable-store sales would rise 4.1 percent, according to the average of seven estimates compiled by Bloomberg News. Sales in the U.S. climbed 4 percent, the Oak Brook, Illinois-based company said today.

     Dollar Thrifty surged 14 percent to $79.27. Hertz offered $72 a share in cash and stock for Dollar Thrifty, 24 percent more than Avis’s offer and 18 percent higher than the 60-day average share price. The offer values Dollar Thrifty at 3 percent more than the company’s closing value on May 6.

     Sysco Corp. jumped 11 percent, the most in the S&P 500, to $31.57. The biggest North American distributor of food to restaurants rose as much as 15 percent, the most since 1987, after sales beat projections and Chief Executive Officer William DeLaney said he’s focused on acquisitions.

     Stock-index futures reversed early gains before the open of U.S. exchanges after Greece’s credit rating was cut two levels to B from BB- by S&P, which said further reductions are possible as the risk of default rises. Another cut would make Greece the lowest-rated country in Europe as today’s reduction, the fourth by S&P since April 2010, left it even with Belarus.

     “The impact of Greece’s downgrade is psychological,” said Brian Lazorishak, money manager at Chase Investment Counsel Corp., which manages more than $1.5 billion in Charlottesville, Virginia. “It just reminds investors that there are more problems over there.”

     Tyson Foods Inc. dropped 6 percent to $17.75. The largest U.S. meat processor posted fiscal second-quarter profit that missed analysts’ estimates as higher feed costs partially offset gains in beef and chicken prices.

     Chipmakers slumped after Wells Fargo & Co. said the industry’s inventory rose during the first quarter and memory prices continued to fall last week. Intel Corp. fell the most in the Dow, sliding 2.1 percent to $22.76. Micron Technology Inc sank 3.8 percent to $10.46.

Have a wonderful evening everyone.

Be magnificent!

A diamond is lost in the mud;

all are seeking it.

Some go to the East – or to the West,

Wishing to find it.

Is it lost in the river?

Or in the rocks?

Kabîr, your servant, appreciates it

for its just value.

He will take it away,

warmly sheltered

in a corner of his heart.

     -Kabir, 1440-1518

As ever,

Carolann

 Silence is one of the hardest arguments

to refute.

                 -Josh Billings, 1818-1885

 

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,  I had a client bring me some fresh salmon yesterday that he caught in the morning which I’m soon on my way home to cook.   He had caught two large salmon in no time at all he said, fishing off Beecher Bay. Salmon is brain food so consume lots of it now that salmon fishing season is here.  A recipe a devised a few years ago is really simple and is wonderfully Canadian.  I put the oven on broil, with the grate about 5 inches below the element;  I rub the salmon very lightly with olive oil, and drizzle 100% Canadian maple syrup over it; squeeze a few lemon drops over it, and surround it with vegetable broth (or white wine).  It takes about 7 minutes, but keep watching it – every oven is different and it may be more or less time, depending on your oven.

 

I wanted to tell you about an interesting book I read last weekend entitled Those Who Save Us, by Jenna Blum.  This was Blum’s first novel; and even more remarkable because of that fact.  The story takes place in Weimar, Germany during the second World War; it is the story of a young German Christian civilian girl named Anna Schlemmer who hides her Jewish lover in 1939 and has his child while he is incarcerated in the Buchenwald camp.  It gives a glimpse of what the war was like for ordinary civilians living in Germany at that time.  The story is written with somewhat of a covert empathy which is extraordinary given that Blum is a descendant of German Jewish Holocaust survivors and worked for the Steven Spielberg Shoah Foundation interviewing Holocaust survivors for four years.

Eventually, Weimar is liberated by the Americans and Anna and her daughter move with an American soldier to New Heidelberg, Minnesota.  Anna’s experience in New Heidelberg reminds me of the stories my husband has told me about growing up in Kitchener (originally New Berlin), Ontario –  how most of the Germans repressed, stifled, their heritage and language, something I could never understand ….anyway, it is worth the read.

photos of the day

May 6, 2011

 

 

 

 

 

 

As many as 768 Croats in Zagreb, Croatia, broke the Guinness World Record for the world’s biggest human smiley. The previous record had 551 participants and was reached in the Latvian capital of Riga.

Nikola Solic/Reuters

 

 

 

 

 

Villagers take part in a ritual celebrating the pagan god Yurya in the village of Pogost, Belarus. People believe that Yurya protects their harvest.

Vasily Fedosenko/Reuters

Melida Horn watches one of the races before the 137th running of the Kentucky Oaks horse race at Churchill Downs in Louisville, Ky.

Darron Cummings/AP

Market Commentary:

Canada

By Matt Walcoff

May 6 (Bloomberg) — Canadian stocks rose, trimming a second straight weekly decline, after the nation added three times more jobs than economists estimated and U.S. employment also topped projections.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1.7 percent after the U.S. added the most jobs in five years. Manulife Financial Corp., North America’s fourth-largest insurer, advanced 5.1 percent after at least three analysts raised their ratings on the shares. Teck Resources Ltd., Canada’s largest base-metals and coal producer, increased 2.1 percent.

The Standard & Poor’s/TSX Composite Index gained 111.22 points, or 0.8 percent, to 13,566.60.

“The key driver is the economic data we’re getting both out of the U.S. and Canada,” said Jennifer Dowty, the Toronto- based co-manager of the C$873.1 million ($909.3 million) Manulife Growth Opportunities Fund. “The payrolls out of the U.S. was a lot stronger than expected, and in Canada it was a similar story.”

The S&P/TSX lost 2.7 percent this week to decline for consecutive weeks for the first time since July. The benchmark stock index retreated as crude oil tumbled 15 percent and silver plunged 27 percent, the most for a week since at least 1975.

Energy and raw-materials companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

Canadian employment increased by 58,300 in April, Statistics Canada said today. Forecasts among 25 economists in a Bloomberg survey had ranged from 5,000 to 40,000. The U.S. added 244,000 jobs last month, surpassing the median economist forecast of 185,000 in a Bloomberg survey.

The S&P/TSX Energy Index advanced from a three-month low as natural gas gained in electronic trading.

Suncor increased 1.7 percent to C$40.26 after falling 10 percent, the most since July 2009, in the previous three days.

Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, climbed 2.5 percent to C$42.30.

Oilfield-services provider Pason Systems Inc. gained for the first time in eight days, surging 5.4 percent to C$15.33.

Penn West Petroleum Ltd., a western Canadian oil and gas producer, jumped 5.9 percent to C$24.17 after Fergal Kelly, an analyst at Royal Bank of Canada, boosted his rating on the company to “outperform” from “sector perform.” Yesterday, the Calgary-based company reported a first-quarter profit more than four times as large as the average analyst estimate.

Gold narrowed its biggest weekly slide since May 2010.

Kinross Gold Corp., Canada’s third-largest producer of the metal, increased 1.5 percent to C$14.54. China Gold International Resources Corp., which explores in China, climbed 6.5 percent to C$4.58. First Majestic Silver Corp., which mines in Mexico, rallied 7.4 percent to C$17.60.

Minefinders Corp., which explores for gold in Mexico, slumped 5.3 percent to C$12.78 to extend its weekly plunge to 20 percent, the biggest since 2008. Brian Christie, an analyst at Desjardins Securities Inc., and Steven J. Green, an analyst at Toronto-Dominion Bank, cut their ratings on the shares.

Romarco Minerals Inc., which is developing a gold mine in South Carolina, rallied 13 percent, the most in eight months, to C$1.88. Shares of the Toronto-based company had fallen 28 percent this year, nearly twice as much as an index of gold explorers.

Industrial-metals and coal companies rose as zinc and copper gained in London. Teck advanced 2.1 percent to CS48.80.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, increased 2.1 percent to C$123.72.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, rose 2.1 percent from a 2011 low to C$51.80. Earnings at CF Industries Holdings Inc., the second-biggest maker of nitrogen fertilizer, surpassed the average of 12 analyst estimates by 27 percent, excluding certain items.

Manulife surged 5.1 percent to C$17.47 a day after reporting first-quarter profit that fell less than analysts expected as higher premiums in the U.S. and Canada countered claims from the earthquake in Japan. Analysts at Royal Bank of Canada, Bank of Nova Scotia and National Bank of Canada raised their ratings on the insurer.

“The risk premium that the market currently applies to Manulife’s stock has not adjusted to the company’s reduced risk position and improved fundamentals,” Peter Routledge, a National Bank analyst, wrote in a note to clients.

Magna International Inc., Canada’s largest auto-parts maker, advanced 3.8 percent to C$50.51. The company said it earned $1.34 a share in the first quarter, excluding certain items, beating the average of 15 analyst estimates by 18 percent as vehicle production rebounded.

BlackBerry maker Research In Motion Ltd. retreated 2.6 percent to a four-year low of C$44.56. Market-research firm ComScore Inc. said smartphones using Google Inc.’s Android operating system surpassed BlackBerry in U.S. market share in the first quarter.

RIM now trades at a record-low 7.2 times its past four quarters of earnings.

US

By Rita Nazareth

May 6 (Bloomberg) — U.S. stocks advanced, paring the biggest weekly decline for the Standard & Poor’s 500 Index since March, as stronger-than-forecast growth in jobs bolstered confidence in the world’s largest economy.

DuPont Co. and Boeing Co. rose at least 1.1 percent to help lead gains in the Dow Jones Industrial Average. Kraft Foods Inc., the world’s second-largest food company, and Fluor Corp., the biggest publicly traded U.S. construction company, climbed more than 2 percent after beating analysts’ earnings estimates.

Stocks trimmed gains after two people familiar with the situation said European finance officials are meeting in Luxembourg to discuss restructuring Greek debt.

The S&P 500 advanced 0.4 percent to 1,340.20 at 4 p.m. in New York, after earlier rallying as much as 1.4 percent. The benchmark gauge for American equities dropped 1.7 percent this week as commodities slumped the most since 2008. The Dow gained 54.57 points, or 0.4 percent, to 12,638.74 today.

“The jobs report was pretty solid,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc., which oversees $3.65 trillion as the world’s largest asset manager. “It gave people more conviction that the economic recovery is still on pace.

Investors started to doubt the sustainability of the rebound and commodities naturally took the hit. The rally is a partial reversal of that sentiment. There’s more room for stocks to move higher during the course of the year.”

Gauges of energy and raw-material companies fell more than

4.4 percent through yesterday to lead the S&P 500’s retreat from an almost three-year high reached on April 29. The plunge in commodity shares led the index to a 2.1 percent retreat over the first four days of this week. Including today’s rebound, the index is up 6.6 percent this year amid higher-than-forecast profits and government stimulus efforts.

One year ago today the Dow average had the biggest slide since 1987, as a mutual fund’s hedging strategy set off a chain reaction. Almost 1.3 billion shares traded on U.S. markets in a 10-minute span starting at 2:40 p.m. New York time on May 6, 2010, six times the average, sending prices lower on trading venues from New York to New Jersey and Chicago. The Dow slumped almost 1,000 points intraday before paring losses.

Stock futures extended gains before the start of regular trading today after a government report showed that the U.S. economy added more jobs than forecast in April, easing concern that higher fuel prices are slowing the economic recovery.

Payrolls increased by 244,000 workers last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month, the Labor Department said. Economists projected an April rise of 185,000, according to the median estimate in a Bloomberg News survey. Employment excluding government jobs jumped the most in five years. The jobless rate rose to 9 percent, the first increase since November.

“The very positive jobs report was just what we needed after all the bad news of the last few days,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “The market is going to focus on the change in private payrolls which was excellent.

That will more than offset a slight increase in the unemployment rate. If oil continues to fall, we’ll see higher consumer spending and a very good environment for stocks.”

Bill Gross, who runs the world’s biggest mutual fund at Pacific Investment Management Co., said U.S. growth isn’t sufficient to support asset and labor markets nor enough to compensate for the nation’s growing debt level.

“The private economy is moving ahead as evidenced by today’s number but at a measured pace,” Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene. “Year- over-year real gross domestic product is holding at 2 percent, while nominal GDP is only 3.9 percent. That’s hardly sufficient to support both asset and labor markets in combination, nor is it sufficient to grow our way out of a steadily increasing debt to GDP ratio. It’s not enough.”

While employment growth will probably be strong the next few months, investors will need to see whether that is sustainable once the Federal Reserve’s policy of quantitative easing ends in June, according to Gross. The S&P 500 has rallied 28 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.

The euro extended losses versus the dollar as European finance officials held an unscheduled meeting in Luxembourg where they may discuss proposals for restructuring Greek debt, according to two European officials familiar with the situation.

A German official said the discussions would include a German paper on options for confronting Greece’s growing debt load, which has spurred speculation by investors that a restructuring was a likely outcome.

Earlier, Der Spiegel magazine reported that ministers are convening an emergency meeting after Greece threatened to withdraw from the euro region. Greece rejected the report, according to a finance ministry statement, and German Chancellor Angela Merkel’s chief spokesman “categorically” denied that any discussions on a Greek exit were under way. He declined to comment when asked whether officials are meeting tonight.

“We’re seeing some knee-jerk reaction in the currency market,” said Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co. “The dollar gets a bid as a haven when there’s concern about risks. As investors bid the dollar, they sell other things, like commodities and stocks.”

A gauge of industrial companies in the S&P 500 rose 0.8 percent, the most within 10 groups. DuPont, the third-biggest U.S. chemical maker, added 1.4 to $54.63. Boeing gained 1.1 percent to $79.31.

Kraft rose 2.1 percent, the most in the Dow, to $34.08.

Food and beverage companies such as Kraft, Sara Lee Corp. and Kellogg Co. have raised prices on many products to cope with rising costs for commodities such as wheat, corn, and coffee.

Kraft, led by Chief Executive Officer Irene Rosenfeld, said yesterday that price increases helped make up for rising costs.

Fluor jumped 7.9 percent to $70.87. The largest publicly traded U.S. construction company said first-quarter profit rose 2.3 percent as higher metal prices spurred mining projects. A rebound in commodity demand and higher oil prices have boosted mining and energy contracts, helping Fluor reach record backlog of $37.2 billion.

Earnings per share beat estimates at 73 percent of the 416 companies in the S&P 500 that reported quarterly results since April 11, according to data compiled by Bloomberg.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

To go from opinion to perception,

from imagination to fact, from illusion to reality,

from something that is not there,

to something that is;

that is the way forward.

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Three o’clock is always too late

or too early for anything you

want to do.

-Jean-Paul Sartre, 1905-1980

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,  I spent the last two days at UBC’s Sauder School of Business and I am happy to say it was the last course necessary to complete my Certificate in Business Family Advising.  However, the final step before graduating later this year, is to work on an actual case study and present the analysis to the Faculty.  When I returned to Victoria last night,  I went to a reception which was given by The Victoria Conservatory of Music  as an expression of appreciation for its supporters.  Several of the students from the Conservatory performed and it was just incredible to witness the remarkable talent of these young musicians.  There were two violinists, a classical guitarist, a pianist, an incredible vocalist – just amazing.   While I was there, I ran into one of my clients and as we were chatting before the performance began, he mentioned that he was going to New York next week for a cultural break.  I told him I had just read an article in The New Yorker about a painting and an exhibit at the Frick that he should try to see and that I would scan and e-mail the article to him this morning, which I did.  I thought I’d share it with you too in case you have the opportunity soon to go to New York in the near future. Here it is:

CRITIC’S NOTEBOOK

MASTER STROKES

Is the Frick’s Rembrandt “Self-Portrait” of 1658 the best painting in New York?

Its return from a revelatory cleaning coincides with a fine show, “Rembrandt and His School: Masterworks from the Frick and Lugt Collections.”  Bankrupt by the age of fifty-two, the artist casts himself as a sick and tired potentate of the studio, enthroned in an archaic golden-yellow jerkin and a floppy black hat.  An almost subliminal drama smolders.  Rugged brushwork – prodigious, even for Rembrandt – details aging flesh as much by touch as by sight.  A shadow falls across the eyes.  (A tiny dot of white on one eye ignites the painting.)  The high belting of the jerkin lends the figure a busty, maternal air.  The barely indicated knees bemuse; given a chair jammed up to the picture plane, they should protrude  into the room.  (Are we sitting in Rembrandt’s lap?)  The artist doesn’t doubt his powers.  How could he?  But, in disgrace, he seems to wonder what they’re worth.  He isn’t much good to himself any longer.  He’s ours, if we want him – in a fire sale of the soul.

                                     -Peter Schjeldahl

 

 

 

 

 

Army musicians stand in front of a World War II monument in Russia’s southern city of Volgograd, once known as Stalingrad. Russia prepares to mark the 66th anniversary of the 1945 victory over Nazi Germany on May 9. Stalingrad saw perhaps the greatest number of casualties in the history of warfare during its long 1942 seige.

Sergey Karpov/Reuter

 

 

 

 

 

 

A cat looks at demonstrators shouting slogans during a march by animal rights activists in Bucharest, Romania. A parliamentary committee has passed a draft law that says stray dogs can be killed. Protesters called for stray dogs to be sterilized, saying it is cheaper and more humane. Romania has long had a problem with stray dogs, with an estimated 30,000 of them in the capital alone.

Vadim Ghirda/AP

Market Commentary 

Canada

By Matt Walcoff

     May 5 (Bloomberg) — Canadian stocks fell for a fourth day, briefly erasing the 2011 gain for the nation’s benchmark index, as the worst global commodities slump in two years bled into equities.

     Suncor Energy Inc., the country’s largest oil and gas producer, lost 5.3 percent as crude oil declined the most since 2009. Kinross Gold Corp., the country’s third-largest gold producer, retreated 3.7 percent as the U.S. Dollar Index rose the most in six months. First Quantum Minerals Ltd., Canada’s second-biggest publicly traded copper producer, decreased 4.7 percent as the metal sank to the lowest price this year.

     The Standard & Poor’s/TSX Composite Index slumped 155.94 points, or 1.2 percent, to 13,455.38. The retreat reduced the index’s advance for the year to 0.1 percent. It fell as low as 13,415.95, below its Dec. 31 level of 13,443.22.

     “I view this as a wake-up call to investors who believe the commodity trade only goes one way,” said Barry Schwartz, a money manager at Baskin Financial Services Inc. in Toronto, which oversees C$400 million ($415 million).

     The S&P/TSX index has fallen 3.5 percent this week as the Thomson Reuters/Jefferies CRB Commodity Price Index had the biggest weekly drop in 26 months. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value.

     Energy and metals declined after the U.S. reported more initial jobless claims than most economists had forecast. Crude oil reached a seven-week low a day after the U.S. reported a decrease in gasoline consumption, while natural gas fell the most in a year after the U.S. said inventories rose more last week than most economists in a Bloomberg survey had forecast.

     The S&P/TSX Energy Index fell from a three-month low.

     Suncor retreated 5.3 percent to C$39.60 to complete the stock’s biggest three-day decline since July 2009. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, dropped 2.6 percent to C$41.25. Cenovus Energy Inc., the fifth-biggest energy company by revenue, lost 2.9 percent to C$33.73. Contract driller Major Drilling Group International Inc. slumped 7.2 percent to C$14.74.

     Sterling Resources Ltd., which explores for oil and gas in Europe, tumbled 22 percent, the most since November 2008, to C$3 after reporting drilling results.

     Gold futures dropped for a third day after European Central Bank President Jean-Claude Trichet signaled the ECB will wait until after June to raise interest rates, boosting the U.S. dollar against the euro. The U.S. dollar-euro exchange rate accounts for 58 percent of the U.S. Dollar Index.

     Kinross decreased 3.7 percent to C$14.33. Goldcorp Inc., the world’s second-largest gold producer by market value, slipped 3.2 percent to C$47.21. Novagold Resources Inc., which is developing gold and base-metal properties in Alaska and British Columbia, slid 7.7 percent, the most in 10 months, to C$10.50.

     Silvercorp Metals Inc., which mines in China, tumbled 8.6 percent to C$10.43 as silver completed its biggest four-day plunge since 1983. CME Group Ltd., the owner of the Comex exchange, has enacted five increases in two weeks to the minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures.

     Minefinders Corp., which produces precious metals in Mexico, sank 8.7 percent to C$13.50 after Trevor Turnbull, an analyst at Bank of Nova Scotia, cut his 12-month price estimate on the company’s U.S.-traded shares to $17 from $18. Turnbull cited Minefinder’s report of lower-quality ore grades at its Dolores mine for the change. The shares’ decline was the biggest since June 2009.

     Base-metals and coal producers retreated as all major industrial metals traded on the London Metal Exchange fell.

First Quantum dropped 4.7 percent to C$121.20. Northern Dynasty Minerals Ltd., Anglo American Plc’s partner in the Pebble project in Alaska, declined 5.7 percent to a 2011 low of C$11.35.

     Pharmacy-benefits manager SXC Health Solutions Corp.

rallied 5.9 percent to a record C$56.15 after raising its 2011 profit forecast. At least four analysts raised their 12-month price estimate on the shares.

     Telus Corp., Canada’s third-largest wireless carrier, gained 3.6 percent to a three-year high of C$51.77 after boosting its quarterly dividend.

US

By Rita Nazareth

     May 5 (Bloomberg) — U.S. stocks tumbled, sending the Standard & Poor’s 500 Index down for a fourth straight day, as shares of energy and raw-material companies slumped following the biggest plunge in commodities in almost two years.

     Freeport-McMoRan Copper & Gold Inc. and Exxon Mobil Corp.

slid at least 2.5 percent as metal prices sank and oil fell below $100 a barrel for the first time since March 17. General Motors Co. slumped 3.1 percent after saying that Chinese sales declined. The NYSE Arca Airline Index jumped 3.2 percent as crude extended its loss since April 29 to 12 percent. FedEx Corp., operator of the biggest cargo airline, added 2.9 percent.

     The S&P 500 retreated 0.9 percent to 1,335.10 at 4 p.m. in New York. The benchmark gauge for American equities has declined

2.1 percent this week. The Dow Jones Industrial Average decreased 139.41 points, or 1.1 percent, to 12,584.17 today.

     “It’s driven by fear,” said James Gaul, a money manager at Boston Advisors LLC in Boston, which oversees about $1.8 billion. “Fear of losing of money on positions for the short- term traders to long-term concerns that the economy is weakening and risky assets aren’t performing as well as they have done, which you can extrapolate into oil prices. Big price moves like these are most often sentiment-driven.”

     Gauges of energy and metal producers fell at least 4.4 percent since April 29, leading the declines in the S&P 500. The index pared this year’s gain to 6.2 percent. Before that, the S&P 500 had risen to the highest level since June 2008 amid government stimulus measures and higher-than-forecast profits.

     The MSCI All-Country World Index of shares in 45 nations fell 1.1 percent. The MSCI EM Index dropped 0.8 percent.

     European Central Bank President Jean-Claude Trichet said the bank will monitor upside inflation risks “very closely,”

suggesting it may wait until after June to raise interest rates again. The Bank of England kept its benchmark rate at a record low of 0.5 percent today. In the U.S., the Federal Reserve last week retained its pledge to keep rates “exceptionally low” for an “extended period” to bolster the world’s largest economy.

     Monetary policy elsewhere is becoming tighter. Central banks in the Philippines and Malaysia today raised interest rates, and India this week increased its borrowing costs for the ninth time since March 2010. Rates in China, Asia’s biggest economy, may rise further after its central bank said yesterday that taming inflation is its top priority.

     “The big risk building in global asset markets was this massive crowding into commodity and emerging markets,” said Michael Shaoul, chairman of Marketfield Asset Management, which oversees $1 billion in New York. “Sooner or later monetary tightening would bring this down. They might be in the process of losing leadership from this point on. Losing their leadership probably means losing a decent amount of value in the process.”

     Stock-futures fell after a report showed that more Americans unexpectedly filed first-time claims for unemployment insurance payments last week, pushed up by three factors that normal seasonal variations failed to take into account, the Labor Department said.

     Applications for jobless benefits jumped by 43,000 to 474,000 in the week ended April 30, the most since August, Labor Department figures showed today. A spring break holiday in New York, a new emergency benefits program in Oregon and auto shutdowns caused by the disaster in Japan were the main reasons for the surge, a Labor Department spokesman said as the data was released to the press.

     “The jobs market is going to lag in this recovery,” said said David Sowerby, a Bloomfield Hills, Michigan-based money manager at Loomis Sayles & Co., which oversees $150 billion.

“There’s concern about inflation and what that can do with global interest-rates. I wouldn’t be surprised to see a modest selloff in stocks in the near-term.”

     U.S. consumer confidence dropped to a five-week low as the highest gasoline prices in almost three years soured Americans’

views of the buying climate. The Bloomberg Consumer Comfort Index decreased to minus 46.2 in the week ended May 1, the lowest level since the end of March, from minus 45.1 the prior period. The buying climate gauge slumped to its second-lowest level in 15 months.

     Indexes of energy and raw-material producers in the S&P 500 fell at least 1.2 percent. Freeport-McMoRan, the largest publicly traded copper producer, declined 2.5 percent to $49.85.

Exxon slumped 2.6 percent to $82.62.

     Murphy Oil Corp. slumped 6.4 percent to $68.57 for the second-biggest loss in the S&P 500. The operator of gasoline- filling stations said second-quarter earnings will be as low as $1.50 a share, trailing the average estimate of $1.75 among analysts in a Bloomberg survey.                           

     “Commodities had a big run and nobody expected prices to remain at those levels,” said James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management, which oversees $110 billion. “It’s not a bad thing that oil and other commodities are down. That will put less pressure on prices, which is good for consumption. The economy is on firmer footing.”

     General Motors slumped 3.1 percent to $32.02. The biggest overseas automaker in China reported sales fell in April, the first decline since December, as the removal of government incentives dented demand.

     GM sold 203,367 vehicles in China last month, the Detroit- based company said in a statement today. That compares with sales of 213,112 units last April. The decline follows delivery growth of 1.2 percent in March and a 6 percent increase in February.             

     The NYSE Arca Airline Index climbed 3.2 percent as 13 of its 15 stocks advanced.

     The Dow Jones Transportation Average rallied 1.1 percent.

FedEx added 2.9 percent to $95.29.

     Con-way Inc. advanced 5.2 percent to $39.54, the highest price since May 2010. The biggest U.S. trucking company by sales reported first-quarter profit that topped analysts’ estimates as revenue at its freight division increased.

     Electronic Arts Inc. added 8.8 percent to $21.68, the highest price since August 2009. The second-largest U.S. video- game producer posted a fivefold gain in fourth-quarter profit, after the shooting title “Dead Space 2” helped sales surpass analysts’ estimates.

     Earnings-per-share beat estimates at 73 percent of the 398 companies in the S&P 500 that reported results since April 11, according to data compiled by Bloomberg. 

Have a wonderful evening everyone. 

Be magnificent 

Find the Unique and possess the Whole.

This truly is our highest, most sublime privilege.

It is in the law of this unity that is, as long as we understand it,

our immutable force.  Its living principle is the force that resides in truth –

Truth is one.

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

To Suffering there is a limit;

to fearing, none.

  -Sir Francis Bacon, 1561-1626

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.  – Confucius (551 BC – 479BC)

Photos of the Day

 

 

 

 

 

 

 

 

 

 

 

Yorkshire terrier Ryota, left, greets miniature pinscher Pin-chan during their encounter in Tokyo.

 

 

 

 

 

 

Japanese astronaut Satoshi Furukawa (r.), US astronaut Michael E. Fossum (l.) and Russian cosmonaut Sergey Volkov smile for the camera during a training exercise in the Soyuz capsule simulator in the Russian cosmonaut training centre at Star City outside Moscow. The three man team is scheduled to leave for the International Space Station on June 7.

Market Commentary:

Canada

By Matt Walcoff

Canadian stocks fell for a third day as earnings at companies including Talisman Energy Inc. (TLM) trailed analyst estimates and a gauge of U.S. service industries showed the weakest expansion in eight months.

Talisman, an oil and gas producer with operations in North America, the North Sea and Indonesia, dropped 5.9 percent after its first-quarter profit excluding certain items missed the average analyst forecast by 50 percent. Agrium Inc. (AGU), Canada’s second-largest fertilizer producer, lost 3.7 percent after forecasting second-quarter profit below the average estimate. Iamgold Corp. (IMG) rose 5.7 percent after reporting a resources increase at its Niobec niobium mine in Quebec. 

The Standard & Poor’s/TSX Composite Index slipped 81.05 points, or 0.6 percent, to 13,611.32.

“Weaker corporate earnings are definitely going to have some weight on the market,” said Marcus Xu, director of equity investments at Genus Capital Management in Vancouver, which oversees C$1.7 billion ($1.8 billion).“We’re starting to see some big companies miss.”

The S&P/TSX decreased 2.2 percent from the beginning of the current earnings-reporting season on April 11 to yesterday while the S&P 500 advanced 2.4 percent. Earnings for companies in the Canadian stock benchmark trailed analysts’ estimates by 1.6 percent, while those of S&P 500 companies surpassed forecasts by 8 percent, according to Bloomberg data.

The Institute for Supply Management’s index of non- manufacturing companies fell to 52.8 in April from 57.3 in March. The figure trailed all 73 forecasts in a Bloomberg survey.

Forecast Bottom

Talisman retreated 5.9 percent, the most since June 2009, to C$21.11. Weather delays on the Yme project in Norway “are pushing us to the bottom” of the company’s production-forecast range, Chief Executive Officer John A. Manzoni said in a press release.

Other energy shares dropped as natural gas futures declined on forecasts for cooler-than-normal weather in the U.S. South. Crude oil slipped for a third day as the U.S. Energy Department said inventories increased more last week than most analysts in a Bloomberg survey had forecast.

Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, slumped 2 percent to C$42.34. Cenovus Energy Inc. (CVE), Canada’s fifth-biggest energy company, lost 1.6 percent to C$34.72. Imperial Oil Ltd. (IMO), the owner of Canada’s Esso chain of gas stations, retreated 1.4 percent to C$47.70.

Financials Fall

Canada’s six biggest banks all fell after the release of the ISM data.

Toronto-Dominion Bank (TD), which has more than 1,000 U.S. branches, dropped 0.7 percent to C$81.39. Royal Bank of Canada, its bigger rival, declined 1.2 percent to C$58.23. Bank of Nova Scotia, Canada’s third-largest lender by assets, slipped 1.1 percent to C$57.73.

Base-metal and coal producers fell as all major industrial metals traded on the London Metal Exchange dropped.

First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, decreased 2.1 percent to C$127.20. Teck Resources Ltd. (TCK/B), Canada’s biggest base-metals and coal producer, retreated 1.7 percent to C$49.62.

Uranium One Inc. (UUU), a mining company controlled by Moscow- based ARMZ Uranium Holding, rose 5.7 percent to C$4.44 as prices of the nuclear fuel increased. Shares of the Vancouver-based company have jumped 14 percent this week.

Missing Estimates

Agrium Inc., a fertilizer producer and agricultural- products retailer, declined 3.7 percent to a five-month low of C$80.47. The company provided a first-half forecast that indicated it will earn $3.37 a share to $3.87 a share in the second quarter, excluding certain items, compared with the average analyst estimate in a Bloomberg survey of $3.97 a share. 

I amgold surged 5.7 percent to C$19.77. The company reported a 691 percent increase in the measured and indicated mineral resource at the Niobec project. Niobium is a metal used in steel production and superconductors.

Kinross Gold Corp. (K) and Loblaw Cos. rose after reporting earnings that beat analyst estimates. Kinross, Canada’s third- largest gold producer, rallied 4.9 percent from a 29-month low to C$14.88 after raising its 2011 production forecast. Loblaw, the country’s biggest grocery chain, surged 4.6 percent, the most since November 2009, to C$41.90.

Publisher Tumbles

Torstar Corp. (TS/B), the owner of the Toronto Star, plunged 9.5 percent, the most in 23 months, to C$12.35. The publisher reported first-quarter earnings that missed the average of six analyst forecasts by 15 percent, excluding certain items.

West Fraser Timber Co., Canada’s largest lumber producer, sank 5.3 percent to C$51 after its first-quarter revenue of C$687 million trailed analysts’ estimates of C$690 million and C$717 million.

“Prices for the company’s construction products are expected to remain volatile until the U.S. housing industry experiences sustainable recovery,” West Fraser said in a press release.

US

By Rita Nazareth

May 4 (Bloomberg) — John Silvia, chief economist at Wells Fargo Securities LLC, talks about the ADP Employer Services report for April and its implications for the U.S. economic recovery. Companies added 179,000 workers last month signaling the labor market is strengthening, data from the private report based on payrolls showed today. Silvia speaks with Betty Liu and Michael McKee on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

U.S. stocks fell, with commodity producers driving a third straight loss for the Standard & Poor’s 500 Index, as lower-than-estimated reports on service industries and job growth damped optimism in the economy.

Caterpillar Inc. (CAT) and DuPont Co., among companies most-tied to the economy, fell at least 1.7 percent to help lead declines in the Dow Jones Industrial Average. Freeport-McMoRan Copper & Gold Inc. (FCX) and Occidental Petroleum Corp. (OXY) led commodity producers lower, dropping more than 2.4 percent, as oil and metals sank. Las Vegas Sands Corp. (LVS), the U.S. casino company expanding in Asia, slumped 7.3 percent after reporting profit that missed estimates.

The S&P 500 lost 0.7 percent to 1,347.32 at 4 p.m. in New York. The index has dropped every day since closing at the highest level since June 2008. The Dow fell 83.93 points, or 0.7 percent, to 12,723.58 today. Oil for June delivery declined 1.6 percent to $109.24 a barrel in New York.

 “We’ve seen some tempering of economic statistics,” said Michael Mullaney, who manages $9.5 billion at Fiduciary Trust in Boston. “We’re going to see some sloppiness in the market until we get a clear indication on whether the sluggishness in economic activity is temporary. Employment growth is critical for the economy becoming self-sustaining.”

The S&P 500 extended its drop since April 29 to 1.2 percent. Oil, metal and chemical companies have led the market’s slump. Silver futures have plunged 19 percent, the biggest three-day drop since 1983, as increases in Comex margins spurred investor sales. Oil has slumped 4.1 percent.

Earnings Reports

The S&P 500 has trimmed its 2011 gain to 7.1 percent. The index rallies since Dec. 31 amid higher-than-estimated profits and economic reports. Earnings-per-share beat estimates at 73 percent of the 359 companies in the S&P 500 that reported results since April 11, according to data compiled by Bloomberg.

Stocks extended losses after a report showed that service industries in the U.S. expanded in April at the slowest pace in eight months as higher fuel prices prompted companies to cut back. The Institute for Supply Management’s index of non- manufacturing companies declined to 52.8 last month from 57.3 in March. Readings greater than 50 signal growth, and the median forecast of economists surveyed by Bloomberg News called for a gain to 57.5. A gauge of new orders dropped by the most since record-keeping began in 1997.

Stock-index futures fell before the start of trading as an ADP Employer Services report showed that employment at U.S. companies increased by 179,000 in April. The median estimate in a survey called for a 198,000 increase this month. Estimates ranged from a gain of 164,000 to 240,000, according to the Bloomberg survey of 34 economists.

Employment probably increased for a seventh straight month in April, economists in a survey said before a U.S. Labor Department report on May 6.

Caterpillar, the world’s largest maker of construction equipment, dropped 2.2 percent to $110.77. GE retreated 1.8 percent to $20.27.

U.S. equities also followed European and Asian shares lower amid concern central banks will need to lift interest rates to fend off accelerating inflation.

The Federal Reserve may start raising its benchmark interest rate late this year, Miguel Savastano, the deputy director for Western Hemisphere at the International Monetary Fund, told reporters today in Santiago.

‘Critical’

The People’s Bank of China said stabilizing prices and managing inflation expectations are “critical” after policy makers from India and Brazil yesterday signaled further tightening is possible. Interest-rate futures are indicating European Central Bank President Jean-Claude Trichet may signal more increases at the end of a policy meeting tomorrow.

Gauges of raw-material and energy producers led the declines in the S&P 500 within 10 industries, falling at least 1.5 percent. Gold declined after a report that Soros Fund Management LLC may have cut metal holdings. Crude oil dropped to a two-week low as a U.S. Energy Department report showed supplies surged.

Freeport-McMoRan, the largest publicly traded copper producer, slumped 3.9 percent to $51.14. Occidental Petroleum declined 2.5 percent to $108.89 

Las Vegas Sands fell 7.3 percent to $42.53. The casino operator reported a first-quarter adjusted profit of 37 cents a share, missing the average analyst estimate of 44 cents, amid lower winnings from table games in Nevada.

First Solar Tumbles

First Solar Inc. (FSLR) tumbled 6.2 percent to $126.31. The largest maker of thin-film solar modules reported first-quarter profit fell 33 percent as competition from Chinese manufacturers increased and prices declined in Europe, its largest market.

Varian Semiconductor Equipment Associates Inc. (VSEA) surged 51 percent to $61.36. Applied Materials Inc. (AMAT), the world’s largest producer of chipmaking equipment, agreed to buy Varian for $4.9 billion in cash. Applied Materials will pay $63 a share, a 55 percent premium over yesterday’s closing price.

Ralcorp Holdings Inc. (RAH) rose 4.9 percent to $87.39, paring a gain of as much as 8.2 percent. The maker of Raisin Bran and Grape-Nuts cereal spurned a $4.9 billion offer from ConAgra Foods Inc. (CAG) and adopted a shareholder rights plan to bar its suitor from gaining control of its shares.

“We’re seeing a lot of M&A deals,” said Tom Wirth, senior investment officer for Chemung Canal Trust Co., which manages $1.6 billion in Elmira, New York. “I expect that trend to continue as many of these companies have a huge amount of cash on their balance sheets.”

 Global Deals 

About $834.3 billion in takeovers have been announced globally so far in 2011, a 23 percent increase from the same period in 2010, according to data compiled by Bloomberg. 

Bank of America Corp. boosted forecasts for S&P 500 earnings in 2011 and 2012, citing more manufacturing and business spending, as well as gains from higher foreign profits, commodity prices and a weaker U.S. dollar.

David Bianco, the bank’s New York-based chief U.S. equity strategist, said S&P 500 companies will earn a total of $97 a share in 2011, up from a prior projection of $95. In 2012, they will post profit of $104, said Bianco, who had estimated $102.

Credit Suisse Group AG boosted its year-end forecast for the S&P 500 to 1,275 from 1,250 while lifting the earnings-per- share estimate for the benchmark to $94 from $91.

Have a wonderful evening everyone 

Success is how high you bounce when you hit the bottom

-George S. Patton (November 11, 1885 – December 21, 1945)

Be magnificent!

As ever,

Nishma for Carolann

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

 All that we are is the result of what we have thought. If a man speaks or acts with an evil thought, pain follows him. If a man speaks or acts with a pure thought, happiness follows him, like a shadow that never leaves him.                   – Buddha

Photo of the day, May 3^rd, 2011

Market Commentary:

Canada

By Matt Walcoff

Canadian stocks fell the most in more than seven weeks, led by producers of energy, metals and fertilizer, as commodities dropped after China’s central bank signaled it may tighten credit even as growth cools.

Suncor Energy Inc. (SU), Canada’s largest oil and gas producer, declined 5.6 percent after cutting its production forecast. Goldcorp Inc. (G), the world’s second-biggest gold producer, lost 2.9 percent as the metal slumped the most since March 15. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, decreased 3.1 percent as corn futures retreated to the lowest price since March 31.

“Commodities are going through a correction,” said Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, which manages C$1.6 billion ($1.7 billion). “China is really starting to try to slow down their economy. That will take some enthusiasm off the commodity market for a while.”

The Standard & Poor’s/TSX Composite Index fell 242.14 points, or 1.7 percent, to 13,692.37, the biggest decline since March 10.

The S&P/TSX dropped 1.9 percent from April 8 to yesterday as the Thomson Reuters/Jefferies CRB Commodity Price Index slipped from a 30-month high. Energy and raw-materials companies make up 49 percent of Canadian stocks by market value, according to Bloomberg data.

Inflation Priority

The People’s Bank of China said in a report today that controlling inflation is its top priority. China raised reserve requirements for its largest lenders to a record 20.5 percent last month.

Crude oil dropped 2.2 percent in New York a day before a U.S. supplies report that analysts estimate will show inventories at a six-month high, according to the median forecast in a 

Bloomberg survey. 

Canadian Natural Resources Ltd. (CNQ), the country’s second- largest energy company by market value, declined 2 percent to C$43.20. Talisman Energy Inc. (TLM), which produces oil and gas in North America, the North Sea and Indonesia, lost 2.4 percent to C$22.43 a day before it is to release first-quarter earnings. Petrominerales Ltd. (PMG), which operates in Colombia, decreased 6.4 percent, the most since September, to C$33.91.

Suncor slumped 5.6 percent, the most in 15 months, to C$41.55 after cutting its 2011 production forecast by 30,000 barrels of oil equivalent a day to a range of 520,000 to 570,000 barrels of oil equivalent a day. In a press release, the company cited the conflict in Libya.

Upgrader Maintenance

Investors may also be concerned oil-sands upgrader maintenance will take longer than the company estimates, Phil Skolnick, an analyst at Canaccord Financial Inc., said in an e- mail message. Suncor said today an upgrader at the Syncrude project will undergo six weeks of maintenance in September and October and work on a second upgrader will take place earlier than previously scheduled.

The S&P/TSX Materials Index tumbled the most in seven weeks. Gold futures slipped 1.1 percent as the U.S. dollar gained the most against the British pound since January.

Silver plunged 7.6 percent, completing the biggest two-day slide since October 2008, after CME Group Inc., the owner of the Comex exchange, raised silver margin requirements for the second time in a week. The requirements specify the minimum amount of cash that must be deposited when borrowing from brokers to trade silver futures. 

Goldcorp dropped 2.9 percent to C$48.69 after sinking 5.2 percent yesterday. Eldorado Gold Corp. (ELD), Canada’s fifth-largest gold producer by market value, declined 7.4 percent, the most since June 2009, to C$15.98. China Gold International Resources Corp., which explores for gold in China, tumbled 6.6 percent to a seven-month low of C$4.28.

Corn Declines 

Potash Corp. and Agrium Inc. (AGU) slumped to 2011 lows as corn futures retreated after exchange data showed that Archer Daniels Midland Co., the largest grain processor, delivered 1.96 million bushels of corn against expiring May futures. Potash Corp. lost 3.1 percent to C$51.46. Agrium, a fertilizer producer and agricultural-products retailer, decreased 2.9 percent to C$83.55. 

Thirteen of 16 base-metals and coal producers in the S&P/TSX dropped. China is the world’s largest user of industrial metals.

First Quantum Minerals Ltd. (FM), Canada’s second-largest publicly traded copper producer, declined 3.1 percent to C$129.92. Teck Resources Ltd. (TCK/B), the country’s biggest base-metals and coal producer, lost 2.7 percent to C$50.47. Northern Dynasty Minerals Ltd. (NDM), Anglo American Plc’s partner in the Pebble project in Alaska, sank 4.7 percent to C$12.52.

Canada’s eight-largest banks and three biggest insurers each retreated.

Manulife Financial Corp. (MFC), North America’s fourth-largest insurer, decreased 4 percent to C$16.80 two days before it is to release first-quarter financial results. In a note to clients dated yesterday, Joanne Smith, an analyst at Bank of Nova Scotia, reduced her 2011 earnings forecast for the company, citing the March earthquake in Japan.

US 

By Rita Nazareth and Jeff Sutherland 

U.S. stocks retreated, sending the Standard & Poor’s 500 Index lower for a second straight day, as declines in oil and gold prices drove commodity producers down and Sears Holdings Corp. (SHLD) led a drop in retailers. 

Freeport-McMoRan Copper & Gold Inc. (FCX) and ConocoPhillips paced losses in metal and energy companies, slumping at least 2.1 percent. Sears, the largest U.S. department-store chain, tumbled 9.9 percent after saying it lost money last quarter. Pfizer Inc. (PFE) slid 2.8 percent as sales of its Lipitor cholesterol pill, the world’s best-selling drug, missed estimates. MasterCard Inc. (MA), the second-biggest bank-card network, rallied 2.6 percent after earnings topped analysts’ estimates. 

The S&P 500 declined 0.3 percent to 1,356.62 at 4 p.m. in New York after falling as much as 0.9 percent at 4 p.m. The Dow Jones Industrial Average rose 0.15 point, or less than 0.1 percent, to 12,807.51. Both gauges fell yesterday after rising to the highest levels since 2008 amid higher-than-estimated corporate earnings and economic data. 

“People are taking some chips off the table,” said Michael Strauss, who helps oversee $27 billion as chief investment strategist at Commonfund in Wilton, Connecticut. “We’ve had good numbers, but we also had a good run in the equity markets. In addition, there’s concern about the path of inflation and interest rates. Investors are treating things here more cautiously.”

Earnings Scorecard 

The S&P 500 has risen 7.9 percent this year. Earnings-per- share beat estimates at 74 percent of the 336 companies in the S&P 500 that reported results since April 11, according to data compiled by Bloomberg. 

The MSCI Emerging Markets Index dropped 1.7 percent today as India’s central bank raised interest rates by a more-than- estimated 0.5 percentage point after forecasting inflation will stay at an “elevated level.”

Stocks fell even after orders placed with U.S. factories rose 3 percent in March on increasing demand for machinery and computers, topping the median economist estimate in a Bloomberg News survey for a gain of 2 percent.

Sears Holdings declined 9.9 percent to $75.88, the worst drop in almost a year. The retailer said it lost $1.35 to $1.81 a share in the first quarter, compared with the 3-cent average profit estimate from analysts, as appliance sales dropped.

Gauges of energy and raw-material producers led declines in the S&P 500, falling 2.4 percent and 1 percent, respectively, as oil, silver and gold retreated. Silver futures tumbled, capping the biggest two-day slide since October 2008, after margin requirements on the Comex increased for the second time in less than a week. Gold fell the most since mid-March.

Freeport, Chesapeake

Freeport-McMoRan, the largest publicly traded copper producer, dropped 2.1 percent to $53.20. ConocoPhillips (COP) lost 3.8 percent to $74.53.

Chesapeake Energy Corp. (CHK) retreated 5.7 percent to $31.33. The most-active U.S. natural-gas driller reported a first- quarter loss, saying lost $725 million from energy hedging contracts used to lock in oil and gas prices.

Pfizer, the world’s biggest drugmaker, slumped 2.8 percent to $20.44. Lipitor had sales of $2.39 billion in the first quarter, missing the $2.55 billion average estimate of five analysts surveyed by Bloomberg. Sales will decline by more than half next year after generic-drug makers flood the U.S. market with cheaper copies, according to eight analysts surveyed.

Pfizer Chief Executive Officer Ian Read is selling units and cutting jobs to prepare for the loss of U.S. patent protection of Lipitor in November.

Four-Day Streak

The S&P 500 broke a four-day winning streak yesterday as declines in commodity producers led the market lower following an early rally spurred by the death of Osama bin Laden, leader of the al-Qaeda terrorist network.

“We’re seeing a defensive move today,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “There’s some fear about terrorist retaliation. Still, you just cannot knock this thing down too much. Profits have been fantastic and most economic reports tell us there is economic momentum.”

MasterCard gained 2.6 percent to $282.38. Profit excluding some items was $4.29 a share, beating the average analyst estimate of $4.09, as consumers stepped up spending.

MetroPCS Communications Inc. (PCS) rose 10 percent, the most in the S&P 500, to $18.15. The pay-as-you-go U.S. wireless provider reported first-quarter subscriber additions of 725,945. That beat the estimates of 475,000 from Jason Armstrong, an analyst with Goldman Sachs Group Inc., and 350,000 by Todd Rethemeier of Hudson Square Research.

Record Options Trading

Alcoa rallied 2.6 percent, the most in the Dow, to $17.67 and bullish options volume surged to a record amid speculation Rio Tinto Group will make a takeover offer for the largest U.S. aluminum producer. More than 360,000 calls to buy Alcoa shares changed hands, eight times the four-week average and the fourth- largest call volume on U.S. exchanges, according to data compiled by Bloomberg.

Mark Kelly, an analyst at Olivetree Securities in London, said he was skeptical about “unsubstantiated” speculation today that Rio has secured a syndicated loan it may use to make a bid for Alcoa for $25.50 a share. Rio has “generally been happy” to focus on smaller purchases, such as Australian coal miner Riversdale Mining Ltd., Kelly said today in a report.

Tony Shaffer, a spokesman for Rio, and Alcoa’s Michael Belwood said separately that their companies don’t comment on market speculation.

The debate over U.S. borrowing limits may drive equity markets down as much as 7 percent in July, according to Tobias Levkovich of Citigroup Inc.

No Catastrophe 

The U.S. government is approaching the $14.29 trillion limit that it’s allowed to borrow. A growing number of Republican lawmakers such as Senators Pat Toomey and Jim DeMint and Representative Joe Walsh are rejecting warnings that failing to raise the debt limit would trigger a financial catastrophe. 

“I’m concerned that the debt-ceiling debate can get somewhat rancorous and nasty as the Republicans really want to push for something important in terms of spending cuts,” Levkovich, the chief U.S. equity strategist at the New York- based firm, said in an interview today on Bloomberg Television’s “InBusiness” with Margaret Brennan. “Markets could get very unsettled already in July.”

 Have a wonderful evening everyone.

The world is the great gymnasium where we come to make ourselves strong.

–Swami Vivekananda (January 12, 1863–July 4, 1902) 

Be magnificent!

 As ever,

 Nishma for Carolann

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

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,  Hope everyone had  a nice weekend….the beautiful month of May has arrived.  And I always think of Christopher Marlowe’s poem where he references the delights of May mornings…

Dear Friends,

The most beautiful love means nothing when it is plain; it needs engraving and silversmithing.  ~La Fausse Maîtresse, Gustave Flaubert 

Royal wedding day

April 29, 2011

Prince William greets Kate Middleton as she arrives at the altar with her father Michael Middleton, prior to their marriage in London’s Westminster Abbey, on April 29.

Dominic Lipinski/AP

Britain’s Prince William and his wife Kate, Duchess of Cambridge, wave as they leave Westminster Abbey after the royal wedding in London, on April 29.

Alastair Grant/AP

 

In this image, the Battle of Britain Memorial Flight, comprising of a Spitfire (l.), Hurricane (r.) and Lancaster bomber, flies over Buckingham Palace as Britain’s Prince William and his wife, Catherine, Duchess of Cambridge appear on the balcony, following their wedding at London’s Westminster Abbey, on April 29.

Neil Chapman/Ministry of Defence/AP

In the wake of record losses, the U.S. Postal Service announced it is cutting 7,500 jobs. But a spokesman for the post office said those positions could be restored if this whole email thing turns out to be nothing but a fad.

– Jay Leno

Market Commentary:

Canada

By Matt Walcoff

     April 29 (Bloomberg) — Canadian stocks rose, trimming a monthly decline, as oil and gas climbed after the U.S. reported larger increases in personal income and spending than most economists had forecast.

     Canadian Natural Resources Ltd., gained 2.4 percent after companies including Caterpillar Inc. and Cliffs Natural Resources Inc. reported earnings that topped analyst estimates.

Research In Motion Ltd., the BlackBerry maker, plunged 14 percent after at least five analysts reduced their ratings on the shares. Lundin Mining Corp. jumped 11 percent after the Globe and Mail said a Chinese-led investment group is preparing a possible bid for the base-metals producer.

     The Standard & Poor’s/TSX Composite Index climbed 50.39 points, or 0.4 percent, to 13,944.79 after surging more than 80 points in the last 36 minutes of trading.

     “It’s just great awareness that economic revival is occurring,” said Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, which oversees about C$1 billion ($1.06 billion). “We saw Cat reporting today. That would be representative of global industry still powering forward.”

     The index lost 1.2 percent this month, or 1 percent with dividends included, for the first negative total return since June. The streak of positive returns was the longest since 1983.

Energy and financial companies have led the decline as data and forecasts indicated a slowing recovery in the U.S., which bought 75 percent of Canadian exports last year, according to Statistics Canada.

     U.S. personal spending increased 0.6 percent in March, the Commerce Department said today in Washington. Economists had estimated a gain of 0.5 percent, according to the median of 69 forecasts in a Bloomberg survey.

     Crude oil finished April with a record eighth-straight monthly gain, and natural gas rose 2.8 percent as the U.S reported a decline in output.

     Canadian Natural, the country’s second-largest energy company by market value, increased 2.4 percent to C$44.51.

Pacific Rubiales Energy Corp., which produces oil in Colombia, advanced 2.4 percent to C$28.75.

     Canadian Oil Sands Ltd., the largest owner of the Syncrude project, rallied 3.1 percent to C$32.64 after its first-quarter earnings topped the average of nine analyst estimates by 8.4 percent, excluding certain items. The company also raised its quarterly dividend by 50 percent to 30 Canadian cents a share.

     Niko Resources Ltd., which produces oil and gas in South Asia, sank 3.7 percent to C$79.95 after Gavin Wylie, an analyst at Scotiabank, reduced his rating on the shares to “sector perform” from “sector outperform.” In a note to clients, Wylie wrote that an Indian government study of an offshore natural gas block in which Niko has an interest raises concerns about water encroachment and resource depletion.

     Gold rose to a record as the U.S. dollar fell for a ninth day against a basket of world currencies, the longest streak in four years. The U.S. currency had dropped to the lowest since July 2008 after the Federal Reserve indicated on April 27 that it will not take immediate steps to restrain inflation.

     Goldcorp Inc., the world’s second-largest producer of the metal by market value, gained 1.2 percent to C$52.89. Eldorado Gold Corp., Canada’s fifth-biggest gold producer by market value, advanced 3.6 percent to C$17.61. Agnico-Eagle Mines Ltd., a gold producer with operations in Quebec, Mexico and Finland, increased 2.6 percent to C$65.92 after reporting first-quarter profit that topped the average analyst estimate.

     Base-metals and coal producers gained after the Globe and Mail said a group including Jinchuan Group Ltd. and China Investment Corp. may bid for Lundin. The newspaper cited unnamed “people familiar with the discussions.”                         

     In a written response to the media, the company said its strategic review is ongoing and it has no “material developments” to announce.

     Lundin soared 11 percent to a three-year high of C$9.26.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, advanced 1.7 percent to C$134.83. Quadra FNX Mining Ltd., a copper producer with operations in the U.S., Canada and Chile, increased 3.5 percent to C$15.53.

     RIM, Canada’s largest technology company, forecast profit of $1.30 a share to $1.37 a share for the quarter ending May 28, down from last month’s estimate of $1.47 a share to $1.55 a share. Analysts had forecast a profit of $1.50 a share, on average, excluding certain items. In a press release, the company cited a shift toward cheaper smartphones by BlackBerry buyers.                          

     Shares of the Waterloo, Ontario-based company sank 14 percent, the most since February 2009, to an eight-month low of C$46.09. RIM has tumbled 36 percent over the last 12 months, behind only Jaguar Mining Inc. among S&P/TSX companies.

     Trucking company TransForce Inc. surged 7.4 percent, the most in six months, to C$14.09 after saying it has formed an alliance with Deutche Post AG’s DHL unit. TransForce will take over DHL’s Canadian domestic business. The deal will increase the Saint-Laurent, Quebec-based company’s annual revenue by more than C$275 million ($288 million).

     Extendicare Real Estate Investment Trust, which owns 265 senior-care centers in the U.S. and Canada, plunged 9.7 percent, the most since December 2008, to C$11.89 after the U.S. Health & Human Services Department proposed a rate cut for skilled- nursing facilities.

     In a note to clients, Neil Downey, an analyst at Royal Bank of Canada, said the rate reduction could lower Extendicare’s annual funds from operations by as much as 38 Canadian cents a unit. 

US

By Nikolaj Gammeltoft and Inyoung Hwang

     April 29 (Bloomberg) — U.S. stocks gained, extending a weekly rally in the Standard & Poor’s 500 Index, as companies such as Caterpillar Inc. and Goodyear Tire & Rubber Co. reported earnings that topped analysts’ estimates.

     Caterpillar jumped 2.5 percent after also raising its forecast amid a surge in sales in developing countries and Goodyear surged 12 percent after posting record sales. Microsoft Corp. lost 3 percent after sales missed analysts’ predictions.

Research In Motion Ltd., the maker of the BlackBerry, tumbled 14 percent after cutting its earnings forecast.

     The S&P 500 rose 0.2 percent to 1,363.61 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 47.23 points, or 0.4 percent, to 12,810.54. Both gauges are trading at their highest levels in almost three years.

     “The earnings reports have been as expected or slightly better,” said Michael Shinnick, a South Bend, Indiana-based money manager at Wasatch Advisors Inc., which oversees $10.5 billion. “Companies like Caterpillar with exposure to global growth were very strong. However, there are some pockets of softness with debate over future strength as we saw with Microsoft.”

     The S&P 500 rose 2 percent this week and gained 2.9 percent this month. The measure has rallied 8.4 percent in 2011 as higher-than-estimated profit and economic reports from manufacturing to housing bolstered investors’ confidence.

Earnings-per-share beat estimates at more than three-quarters of the 298 companies in the S&P 500 that reported since April 11, data compiled by Bloomberg show.

     Thomas J. Lee, JPMorgan Chase & Co.’s chief U.S. equity strategist, raised his 2011 year-end estimate for the S&P 500 to 1,475 from 1,425, citing first-quarter earnings growth. He also boosted his 2012 earnings-per-share estimate for companies in the U.S. equity benchmark gauge to $105 from $102.

     “First-quarter results have been impressive and are a reminder that S&P 500 earnings-per-share results can remain resilient despite weaker U.S. gross domestic product growth,”

Lee wrote in a report dated yesterday. “The most encouraging aspect of first-quarter earnings has been the strength in top- line growth.”

     Sales have grown 10 percent for S&P 500 companies that have reported quarterly results since April 11, exceeding analysts’ estimates at 71 percent of the companies. Stocks rallied yesterday, as higher-than-estimated sales at companies such as Sprint Nextel Corp. outweighed a report that the U.S. economy grew at a slower pace than forecast in the first quarter.

     Lower-than-estimated data on business activity and consumer confidence underscored the Fed’s assessment this week that it will probably keep interest rates near zero for an extended period to bolster a “moderate” economic expansion.

     The Institute for Supply Management-Chicago Inc. said today its business barometer fell to 67.6 in April from 70.6 the prior month, trailing the median forecast in a Bloomberg News survey of economists for a drop to 68.2. The Thomson Reuters/University of Michigan final index of consumer sentiment rose to 69.8 from March’s 67.5 reading that was the lowest since November 2009.

The gauge was projected to increase to 70, according to the median economist estimate.

     Government data showed consumer spending in the U.S. climbed in March as Americans spent more on food and fuel, indicating further income gains are needed to boost the biggest part of the economy.                         

     Caterpillar climbed 2.5 percent to $115.41 for the biggest gain in the Dow. The world’s largest maker of construction equipment is betting on higher mining-equipment sales with its $8.6 billion acquisition of Bucyrus as Asian demand drives up commodity prices. Business outside the U.S. is “booming,”

Chief Executive Officer Doug Oberhelman told investors and analysts at a construction-equipment conference in Las Vegas last month.

     Industrial companies in the S&P 500 climbed 0.3 percent collectively, the second-most among 10 industries in the benchmark index.

     Goodyear Tire & Rubber rallied 12 percent to $18.15 for the biggest gain in the S&P 500. The largest U.S. tiremaker reported first-quarter adjusted earnings of 51 cents a share, more than quadrupling the 11-cent average estimate made by analysts.

     Motorola Mobility Holdings Inc. rose 8.6 percent to $26.06.

The handset maker, spun off in January from parent Motorola Inc., reported a narrower first-quarter loss than analysts projected as it sold more Droid and Atrix phones.

     SunPower Corp. jumped 35 percent to $21.69. Total SA, Europe’s third-biggest oil producer, offered to buy as much as 60 percent of the second-largest U.S. solar module manufacturer at a price of $23.25 a share.

     Energy stocks surged 1.5 percent, the biggest rally out of 10 industries in the S&P 500, as the price of oil climbed higher, capping an unprecedented eighth straight month of gains.

     “Earnings numbers are so far looking pretty strong,” said Thomas Nyheim, a Greenville, Delaware-based money manager for Christiana Trust, which oversees $7.5 billion. “But the one thing that keeps coming up is inflation risk, and we’re beginning to see some of that cost pressure coming through in the reports. There’s still a lot of caution in the market.”

      Microsoft declined 3 percent, the most in the Dow, to $25.92. The world’s biggest software maker reported third- quarter sales in the Windows division that missed analysts’ predictions as consumers shunned its products in favor of tablets such as Apple Inc.’s iPad.

     RIM sank 14 percent, the most since September 2009, to $48.65. The Waterloo, Ontario-based company cut its earnings forecast for the quarter ending May 28 to a range of $1.30 a share to $1.37 a share. Last month, the company had forecast profit of $1.47 a share to $1.55 a share. Before today, it had lost 2.7 percent this year.

     Mike Abramsky, an analyst at RBC Capital Markets in Toronto, slashed his price estimate for RIM stock to $55 from $90 and his rating to “sector perform” from “top pick.” At least four other analysts — Jefferies & Co. Inc.’s Peter Misek, Cormark Securities Inc.’s Richard Tse, Gleacher & Co.

Securities’ Stephen Patel and National Bank Financial’s Kris Thompson — reduced their ratings on the stock.

     Bank of America Corp. and JPMorgan paced losses in financial companies after the two were listed as among 16 investment banks facing the first-ever European Union antitrust probes into the swaps market. Charlotte, North Carolina-based Bank of America slid 1.1 percent to $12.28, while New York-based JPMorgan slumped 0.5 percent to $45.63.

Have a wonderful weekend everyone.

Be magnificent! 

Every day a man must solve the problem of widening the field of his life and adjusting his burdens.

These are too complex and numerous for him to carry himself,

but he knows that by being methodical he can lighten the load.

When the burdens are too complicated and difficult to manage, he must understand the reason:

he has not found a system that will put everything in place and distribute the weight he carries more evenly.

The search for this system is actually the search for the whole, for synthesis;

it is our effort to create harmony, thanks to an interior adaptation, in the heterogeneous complex of exterior material.

-Rabindranath Tagore, 1861-1901 

As ever,

Carolann

 It’s not whether you win or lose,

it’s how you place the blame.

     -Oscar Wilde, 1854-1900

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,  There is light at the end of the tunnel for all our amazing accountants out there – the end of the month draws nigh.  I am always so impressed by their tenacity at this time of year, their voices betraying little of the inevitable weariness they must feel after weeks of number crunching….

Today is the anniversary of Mutiny on the Bounty in 1789.  On April 28, 1789, the mutiny on HMS Bounty took place as the crew of the British ship set Capt. William Bligh and 18 sailors adrift in a launch in the South Pacific.  (They of course, survived, and made it back to Britain to report the mutiny.) Attracted by the idyllic Tahitian lifestyle, the mutineers sailed the British Royal Navy Ship to Pitcairn Island, where they burned it offshore in order to avoid detection and to prevent desertion.  There are still descendants of the mutineers and Tahitians living on Pitcairn Island today. 

And speaking of boats, this Saturday is the official opening day of the Royal Victoria Yacht Club – hard to believe sailing season is upon us again.  I was speaking with a client this morning who will be heading down to Colorado in a few weeks to visit a friend she met many years ago on a beach in Tahiti.  The friend and her husband were sailing around the world and they struck up a friendship with my client – thirty years younger than them – and invited her to sail with them for awhile, which she did for five weeks.  My client was describing her friend as being the most amazing 80 year old person she has ever met.  Right now, for example, in her eighties, she is in Africa doing volunteer work!  Isn’t that wonderful?

Royal enthusiasts sleep in their tents in front of Westminster Abbey in London. Revelers are camping outside the Abbey where Prince William and Kate Middleton are due to get married tomorrow, April 29.

Gero Breloer/AP

The pack rides during the second stage, a 171.8 km race from Romont to Romont, at the 65th Tour de Romandie UCI ProTour cycling race in Sedeilles, Switzerland.

Dominic Favre/Keystone/AP

Sprigs of Lily of the Valley, the symbol of Labour Day in France, are seen at the Rungis International food market in Rungis, south of Paris. The sprigs of Lily of the Valley will be rare and expensive next Sunday for Labour Day in France because of an early and too sunny Spring, which has reduced deliveries to wholesalers from between 40 and 50 percent.

Jacky Naegelen /Reuters

Market Commentary:

 Canada

By Matt Walcoff

     April 28 (Bloomberg) — Canadian stocks rose as Canadian National Railway Co. gained for a second day after reporting earnings that topped analyst estimates and natural gas producers advanced as the fuel climbed to a three-month high.

     CN, the country’s largest railroad, rallied 2.4 percent a day after at least 15 analysts boosted their share-price estimates. Encana Corp., Canada’s biggest natural gas producer, rose 2.2 percent after U.S. supplies increased less than most economists had forecast and crude settled at $112.86 a barrel.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, fell 2.8 percent as corn and wheat dropped.

     The Standard & Poor’s/TSX Composite Index rose 1.83 points, or less than 0.1 percent, to 13,894.40. Among S&P/TSX stocks, 131 gained, 112 declined and five were unchanged.

     “People were mostly too bearish with the winter that we got as well as fuel at $113,” Luc Girard, director of the portfolio advisory group at Desjardins Securities in Montreal, which manages about C$18 billion, said of CN. “Investors were too negative about the earnings.”

     The index is poised to end April with its first negative monthly total return including dividends since June, ending the longest streak of gains since 1983. Energy and financial stocks have dropped on data and forecasts indicating the U.S. economic recovery is slowing.

     CN advanced for a seventh day, increasing 2.4 percent to C$73.14 after Norfolk Southern Corp. reported profit that topped analyst estimates. CN raised its own full-year profit forecast on April 26.

     The shares have risen 4.7 percent since April 24, when CN said Microsoft Corp. Chairman Bill Gates’ Cascade Investment LLC has become its biggest shareholder. CN’s seven-day streak of gains is the longest since November 2009.

     Energy companies climbed after the U.S. Energy Department said natural gas supplies increased 31 billion cubic feet last week, compared with the median analyst estimate of 38 billion cubic feet.

     Encana Corp., Canada’s largest natural gas producer, rose 2.2 percent to C$31.42, erasing four days of losses. Nexen Inc., an oil and gas producer with operations on five continents, gained for a sixth day, advancing 3.1 percent to C$24.71.

Canadian Oil Sands Ltd., the largest owner of the Syncrude project, climbed 1 percent to C$31.66.

     Enbridge Inc., Canada’s largest pipeline company, declined 1.8 percent to C$61.23 after Sam Kanes, an analyst at Bank of Nova Scotia, cut his rating on the shares to “sector perform.”

The shares had surged 64 percent since Kanes rated them “sector outperform” in October 2008.

     Sterling Resources Ltd., which explores for oil and gas in Europe, slumped 11 percent, the most in 26 months, to C$3.91 after declaring force majeure on its offshore licenses in Romania. In a press release, the company cited what it called political obstacles from the Romanian government.

     Oilfield-services company Flint Energy Services Ltd. sank 7.8 percent, the most since July 2009, to C$14.94 after saying it had a first-quarter loss of 8 Canadian cents a share to 14 Canadian cents a share. All six analysts in a Bloomberg survey had forecast a profit.

     BlackBerry maker Research In Motion Ltd. advanced 2 percent to C$53.83 after Jeff Kvaal, an analyst at Barclays, said Barclays’ survey of stores found most PlayBook buyers’ feedback has been positive. Shares of the Waterloo, Ontario-based company plunged 27 percent in the 12 months ending yesterday.                        

  Fertilizer producers retreated as corn slumped the most in six weeks after a U.S. government report showed slowing demand.Wheat tumbled as rain fell in parts of the U.S. that had suffered dry spells.

     Potash Corp. dropped 2.8 percent to C$52.69. Agrium Inc., Canada’s second-largest fertilizer producer, slipped 1.4 percent to C$85.17.

     Producers of raw materials used in industry fell after the U.S. Commerce Department said gross domestic product rose at a 1.8 percent annualized rate in the first quarter. Economists had estimated economic growth of 2 percent, according to the median of 80 estimates in a Bloomberg survey.

     U.S. initial jobless claims increased to 429,000 last week from a revised 404,000 the previous week, the Labor Department said in Washington. The median economist forecast in a Bloomberg survey was 395,000.

     Teck Resources Ltd., Canada’s largest base-metals and coal producer, dropped 2.5 percent to C$51.08. Ivanhoe Mines Ltd., which is building a copper and gold mine in Mongolia with Rio Tinto group, declined 1 percent to C$24.83. Grande Cache Coal Corp., which produces coal used in steel mills, lost 3.1 percent to C$8.12, extending its monthly tumble to 21 percent.

     Thomson Reuters Corp., the financial news and information provider, decreased 2.6 percent to C$38.11 after its first- quarter profit trailed the average of 14 analyst estimates by 2.3 percent, excluding certain items. Bloomberg LP, the parent of Bloomberg News, competes with Thomson Reuters in selling financial and legal information and trading systems.

     Imax Corp., the maker of giant-screen movie-projection systems, climbed 6 percent to a 10-year high of C$32.55 after raising its 2011 forecast for theater signings by 40 percent. In a note to clients, James M. Marsh, an analyst at Piper Jaffray Cos., called the estimate “massive.”

     Gold explorer European Goldfields Ltd. soared 12 percent to C$12.96 after Reuters said Greece is close to approving the company’s environmental-impact study for two mines. The news service cited the country’s environment ministry.

 US

By Rita Nazareth

     April 28 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to the highest level since June 2008, as better-than-estimated corporate earnings tempered investors’ concern over slowing economic growth.

     Insurers led gains as Allstate Corp., Aflac Inc. and Lincoln National Corp. posted earnings that topped estimates.

Sprint Nextel Corp. rallied 6.7 percent as the third-largest U.S. mobile-phone carrier reported a narrower loss after paring costs to offset contract-customer defections. Constellation Energy Group Inc. advanced 5.7 percent as Exelon Corp. offered $7.9 billion to buy the power producer. Boeing Co. gained 3.2 percent as Citigroup Inc. raised its share-price estimate.

     The S&P 500 climbed 0.4 percent to 1,360.48 at 4 p.m. in New York. The benchmark gauge for American equities rallied yesterday as the Federal Reserve renewed its pledge to stimulate growth with low interest rates. The Dow Jones Industrial Average increased 72.35 points, or 0.6 percent, to 12,763.31 today.

     “Corporate America has managed to do very well in this environment of sluggish growth,” said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.4 billion. “Earnings are beating estimates. Companies are adding value to their shareholders.

There are just not that many alternatives that can compete with corporate America at this point.”

     The S&P 500 has rallied 8.2 percent in 2011 as higher-than- estimated profit and economic reports from manufacturing to housing bolstered investors’ confidence. Earnings-per-share beat estimates at more than three-quarters of the 269 companies in the S&P 500 that reported results since April 11, according to data compiled by Bloomberg.

     Benchmark gauges reversed early losses today as a report showed the number of Americans signing contracts to buy previously owned homes rose more than forecast in March, a sign the industry that triggered the recession may be stabilizing.

     Stock-index futures fell before the start of regular trading as government data showed the U.S. economy grew at a slower pace than forecast in the first quarter as consumer purchases cooled and government spending declined. Another report showed new applications for unemployment benefits in the U.S. unexpectedly rose last week to the highest level in three months, a sign progress in the labor market may be stalling.

     “It’s very clear that it’s going to be harder and harder to beat estimates from here,” said Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees $784 billion. “You’re going to see the leading economic indicators weaken, albeit from a high level. You are going to have more questions in the market.”

     The global equities bull market will weather any halt in bond purchases by the Fed amid rising U.S. consumption and investment in emerging markets, according to Templeton Asset Management’s Mark Mobius.

     The S&P climbed to an almost three-year high yesterday and the Russell 2000 Index of smaller stocks reached a record after the central bank renewed its pledge to keep interest rates near zero to stimulate the economy. The Federal Open Market Committee agreed to finish $600 billion of Treasury purchases in June.

Another round of buying isn’t needed to sustain the rally and there won’t be an economic slump in the second half, Mobius said in a phone interview from Bucharest yesterday before the Fed statement.

     “We are in a bull market and it will continue,” said Mobius, 74, who oversees more than $50 billion as the Singapore- based executive chairman of Templeton’s emerging markets group.

“There will be corrections along the way but these will be very temporary. The consumer in Europe and America is back. They’re not spending like crazy but they are spending.”

     The S&P 500 Insurance Index rose 1.7 percent, the biggest gain within 24 groups, as 21 of its 22 stocks rallied.

     Lincoln and Allstate are among insurers benefiting from improved investment results in the first quarter. Lincoln reported gains on alternative investments, such as hedge funds, while Allstate said losses narrowed on derivatives. Allstate’s results also improved as claims from costs tied to natural disasters declined.

      Allstate, the largest publicly traded U.S. home and auto insurer, gained 5.7 percent to $33.76. Aflac rose 5 percent to $57. Lincoln National added 4.2 percent to $31.64.                        

     Sprint Nextel rallied 6.7 percent to $5.11. The company added 846,000 prepaid users, while losses of the more lucrative customers who sign up for two-year contracts shrank to 114,000 from 578,000 a year earlier. The carrier added handsets such as the HTC Corp. Evo to wrest customers from larger rivals AT&T Inc. and Verizon Wireless and draw users to its fourth- generation network.

     Constellation Energy climbed 5.7 percent to $36.26. Exelon, the largest operator of U.S. nuclear power plants, agreed to buy the power producer for about $7.9 billion in stock, adding stakes in five reactors and becoming the largest U.S. electricity marketer.

     Overall, there have been more than 8,000 deals announced globally this year, totaling $794.7 billion, a 26 percent increase from the $629.7 billion in the same period in 2010, according to data compiled by Bloomberg.

     Boeing gained 3.2 percent, the most in the Dow, to $78.55.Citigroup raised its share-price estimate for the world’s largest aerospace company to $90, citing positive “momentum”over the next several years.                          

     PulteGroup Inc. gained 3.3 percent to $8.24. The largest U.S. homebuilder by revenue forecast profit in the second half of the year. The company focused on cutting costs in the face of weak demand for new homes. Selling, general and administrative expenses for the quarter decreased 10 percent from a year earlier to $136 million. The rate of cancellations declined and visits to the company’s sale centers increased, said Richard Dugas, chairman and chief executive officer.

     “Assuming market conditions remain stable, we have put ourselves in a position to return to profitability in the back half of the year.” Dugas said on a conference call with investors. “Now it’s about effort and execution, which are clearly within our control.”

     Energy shares had the biggest decline in the S&P 500 within 10 industries, falling 0.2 percent as a group.

     ConocoPhillips slumped 3 percent to $77.45. The third- largest U.S. oil company was cut to “hold” at Deutsche Bank AG, which cited disappointment with first-quarter earnings and said that the outperformance potential is limited.

     Akamai Technologies Inc. tumbled 15 percent, the most in the S&P 500, to $34.94. Traffic growth in the company’s volume business has “moderated,” and it’s “too early” to predict the pace of growth for the rest of the year, according to Chief Executive Officer Paul Sagan. Akamai delivers data for Apple Inc.’s iTunes and streams video for Netflix Inc.

Have a wonderful evening everyone.

Be magnificent!

The phrase ‘to meditate’ does not only mean to examine, observe, reflect, question, weigh;

it also has, in the Sanskrit, a more profound meaning, which is ‘to become.’

-Krishnamurti, 1895-1986 

As ever, 

Carolann

Patience is the companion of wisdom.

              -Saint Augustine, 354-430 

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

DANDELION: The French “dent de lion” means lion’s tooth, perhaps in reference to the jagged teethe of the leaves.  Taraxacum officinale – “Taraxacum” derives from the Greek: “taraxos” means disorder and “akos” means remedy.

A few days ago, Gary and I were walking in the English countryside near Ascot and because there has been such splendid warm weather over there, record breaking temperatures on some days in fact – in  the 25-27 degree range – so many summer plants are already in bloom.  Indeed, it really felt like summer.  Among a cluster of bluebells under a big old oak tree, we glimpsed some dandelions peeking through.  Even though it is a weed, I believe it is a virtuous weed. They are reminiscent of the summers of our childhoods.  Emerson wrote, “a weed is a plant whose virtues have not yet been discovered.”  The virtues of the dandelion are many.  Craig Holdrege writes,

“Prolific and hardy, its bursting yellow flower heads, rising above a rosette of sharply toothed leaves, [dandelions] can be found almost everywhere….The dandelion-sea of yellow in yet unmowed parks and lawns provides a feast for the winter weary eye.  Thrusting its way up between cracks in the expanses of concrete and asphalt, a single dandelion can remind us of the power of life in a seemingly barren world.  Dandelions won’t be held back.

When you look closely at its flower, you’ll discover many (one to two hundred) yellow ribbons.  You might think that they are petals, like those of a rose or tulip.  But no, each one is a complete tiny flower, so that the dandelion blossom as a whole is in fact a bouquet of tiny flowers!  This development of a superflower made of individual flowers represents the pinnacle of flower differentiation in the plant kingdom.

When the sun shines, dandelion flower heads open in the morning and close again in the afternoon.  When clouds shield them from the sun they close up, as if they were saying: we are of the sun and for the sun.  Dandelion flowers attract bees and nearly a hundred species of other insects that enjoy their nectar.  This is a true gift of plant to animal, since – remarkably – their seeds can develop without fertilization.  One day the flower head opens as a white feathery globe.  The parachute-bearing seeds drift off to some new place just waiting for a dandelion to take root.”

MYTHOLOGY:  The Greek Goddess Hecate fed Theseus dandelions for 30 days to  give him strength to defeat the Minotaur. 

photos of the day

April 27, 2011

A pack of riders climb up a vineyard in the Lavaux near Vevey during the first stage of the Tour de Romandie cycling race.

Denis Balibouse/Reuters

A peacock watches visitors at a bird park on Kish Island, 1,250 kilometers (777 miles) south of Tehran.

Caren Firouz/Reuters

 Market Commentary:

Canada

     April 27 (Bloomberg) — Canadian stocks fell, led by fertilizer producers and financial companies, after the U.S. Federal Reserve raised its inflation forecast and cut its growth estimate.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, declined 2.5 percent as wheat fell after Statistics Canada forecast more planting. Silver Wheaton Corp., Canada’s fourth-largest precious-metals company, rallied 6.9 percent after the U.S. Federal Reserve’s Open Market Committee said commodity prices “have pushed up inflation in recent months.” Toronto-Dominion Bank, Canada’s second-biggest lender by assets, dropped 1.1 percent.

“There’s a lot of concern about the inflation that’s happening in food and energy,” said Danielle Park, a partner at Venable Park Investment Counsel Inc. in Barrie, Ontario, which manages at least C$1 million ($1.05 million) each for more than 250 families. “That will be the area where any kind of tightening at all will be the hardest hit.”

 The Standard & Poor’s/TSX Composite Index lost 16.53 points, or 0.1 percent, to 13,892.57. The S&P/TSX slipped 0.6 percent from the beginning of the current earnings season on April 11 to yesterday, while the S&P 500 advanced 1.7 percent. Fifty-two percent of S&P/TSX companies that have reported financial results in the period have surpassed their average analyst forecast, compared with 77 percent of S&P 500 companies.

 The Fed today said prices will rise between 2.1 percent and 2.8 percent this year before moderating. In January, the central bank had forecast inflation of 1.3 percent to 1.7 percent.

     Wheat futures sank after Statistics Canada forecast Canadian planting will increase 17 percent this year.

     Potash Corp. retreated 2.5 percent to C$54.18. Agrium Inc., Canada’s second-largest fertilizer producer, fell 1.9 percent to C$86.36.

      S&P/TSX financial companies dropped the most in seven days as the Fed reduced its forecast for economic growth.

     Toronto-Dominion Bank, Canada’s second-largest lender by assets, declined 1.1 percent to C$81.95. Bank of Montreal, the country’s No. 4 bank, lost 1 percent to C$62.48. Intact Financial Corp., Canada’s largest property and casualty insurer, slipped 2 percent to C$48.61.

     Precious-metals producers gained as gold futures advanced to a record and silver jumped in electronic trading.                        

     Silver reseller Silver Wheaton surged 6.9 percent to C$39.91. Barrick Gold Corp., the world’s largest producer of the metal, increased 1.2 percent to C$48.34. First Majestic Silver Corp., which mines in Mexico, soared 8.7 percent to C$21.31 after tumbling 12 percent in the previous two days.

     Natural gas declined for a third day after Commodity Weather Group in Bethesda, Maryland forecast below-average temperatures for the U.S. South.

     Suncor Energy Inc., Canada’s largest oil and gas producer, lost 1 percent to C$42.52. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, decreased 0.6 percent to C$43.60. Crescent Point Energy Corp., which produces oil and gas in western Canada, retreated 0.8 percent to C$43.20.

US

By Rita Nazareth

     April 27 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index the fifth gain in six days, as the Federal Reserve renewed its pledge to stimulate growth with low rates and said a pickup in inflation is likely temporary.

     General Electric Co. added 2.7 percent after saying it wants to boost its dividend. Moody’s Corp., whose founder John Moody created credit ratings more than a century ago, climbed 6.7 percent as profit beat estimates by 25 percent. Amazon.com Inc. gained 7.9 percent as the world’s largest online retailer reported sales that topped predictions and Deutsche Bank AG increased its share-price estimate to $215.

     The S&P 500 added 0.6 percent to 1,355.66 at 4 p.m. in New York. The Dow Jones Industrial Average gained 95.59 points, or 0.8 percent, to 12,690.96. The Russell 2000 Index of small companies rose 0.6 percent to 858.31, a record. The Fed left its benchmark interest rate in a range of zero to 0.25 percent and retained a pledge in place since March 2009 to keep it “exceptionally low” for an “extended period.”

     “It’s a sigh of relief,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc. in Raleigh, North Carolina, which manages $4 billion. “The Fed kept the language.

At least for the rest of this year and into next year, we see accommodative policy. In addition, there’s a perception that the signs of inflation are fairly tamed at this juncture. That’s another positive. Before the announcement, we also got good corporate earnings releases. So, that combination is lifting the equity markets at this point.”

     The S&P 500 has rallied 29 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. Earnings per share beat estimates at 77 percent of the 197 companies in the S&P 500 that have reported quarterly results since April 11, according to data compiled by Bloomberg.

     Bernanke has signaled he’ll maintain record stimulus until job growth accelerates and the recovery is robust enough to withstand tighter credit. The Fed chief has said he expects that a surge this year in fuel and food costs will have only a passing inflationary impact, differing with Fed regional bank presidents who say borrowing costs may need to rise to contain prices.

     “The economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually,” the Federal Open Market Committee said today in its statement after a two-day meeting in Washington. “Increases in the prices of energy and other commodities have pushed up inflation in recent months,” and the Fed expects “these effects to be transitory,” the statement said.  Bernanke said the end of the Fed’s $600 billion bond-buying program in June probably won’t have a “significant” effect on financial markets or the economy, and the central bank will likely continue reinvesting maturing debt after June.

     “We are going to complete the program at the end of the second quarter,” he said at his first press conference following a policy meeting. “The end of the program is unlikely to have a significant effect on financial markets or the economy.”

     A report before the open of exchanges showed that orders for durable goods rose in March for a third consecutive month, showing businesses intend to keep spending to update equipment.

Bookings for equipment meant to last at least three years climbed 2.5 percent after a 0.7 percent gain the prior month that was revised from a previously reported drop, the Commerce Department said.                         

    GE added 2.7 percent, the most in the Dow average, to $20.65. Chief Executive Officer Jeffrey Immelt said the global economy continues to improve even as oil prices rise.

     “It’s always something to be concerned about because of consumer confidence, but from a GE context, we have such great technology” in energy products, Immelt told reporters today before the Fairfield, Connecticut-based company’s annual meeting in Salt Lake City. “It’s something to think about, but it doesn’t seem to be hurting the economy. So far.”

     Moody’s climbed 6.7 percent to $38.33 after saying that first-quarter profit rose 37 percent as companies issued a record amount of debt, boosting demand for its services.

Corporate bonds sales in the U.S. increased 24 percent to $398.3 billion last quarter from a year earlier, spurring demand for ratings. Moody’s also raised its annual earnings forecast and said it would boost its quarterly dividend to 14 cents a share.                    

 Amazon.com climbed 7.9 percent to $196.63. The world’s largest online retailer reported first-quarter sales that topped predictions. Deutsche Bank increased its share-price estimate to $215 from $192, saying profit growth will resume in the fourth quarter.

     DeVry Inc. gained 7.2 percent to $53.70. The for-profit education company reported third-quarter earnings excluding some items of $1.32 a share, beating the average analyst estimate of $1.23, Bloomberg data show.

     “We’re seeing pretty healthy signs,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “We have a combination of better economic data, strong earnings and new highs for the market. Companies are making money and willing to spend some money to reinvest into their businesses. They are confident enough about the economy and about their own prospects.”

     Broadcom Corp. slumped 12 percent to $35.45. The biggest maker of chips for television set-top boxes forecast second- quarter revenue that missed analysts’ estimates as customers such as Nokia Oyj and Samsung Electronics Co. struggle to boost sales. Chief Executive Officer Scott McGregor cited a slowdown in sales to cellphone makers for the forecast, though he said Broadcom is holding or gaining market share.

     ConocoPhillips dropped 1.7 percent to $79.83. The third- largest U.S. oil company reported first-quarter profit of $1.82 a share on an adjusted basis. Analysts surveyed by Bloomberg had estimated profit of $1.92 on average.

     Financial stocks are poised to rally after lagging behind the S&P 500 because the two groups are echoing a pattern set last year, Oppenheimer & Co.’s Carter Worth said.

     The Financial Select Sector SPDR Fund, an exchange-traded fund tracking 82 S&P 500 companies in the industry, lost 2 percent in the past year through yesterday, while the SPDR S&P 500 ETF Trust, an ETF linked to the entire index, jumped 11 percent. The ratio of their prices fell to 0.121 in November from 0.141 in April 2010, meaning the financial ETF trailed the S&P 500, before rebounding to 0.129 in January. It has since fallen to 0.12.

     “Our hunch is that the disconnect is resolved this time just as it was resolved late last autumn, with the financials coming to life and playing catch-up with the market,” New York- based Worth wrote in a note sent to clients yesterday.

“Something has to give.”

Have a wonderful evening everyone.

Be magnificent!

In the song of the rushing torrent,

hold onto the joyful assurance:

I will become the sea.

And this is not a vain supposition;

it is absolute humility because it is the truth.

-Rabindranath Tagore, 1861-1901

 As ever,

 Carolann

 The folly which we might have ourselves committed

is the one which we are least ready to pardon in

another.

          -Joseph Roux, 1834-1886

 

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

Senior Vice-President &

Senior Investment Advisor