February 27, 2013 Newsletter
I recently came back from visiting family in Jamaica. It has been 9 years since I was last there and it is just as beautiful as I remember it. What I love most about Jamaica is that not only do you get the beautiful clear ocean water, but you also get the gorgeous view of the mountains. Jamaica is a third world country so with the beauty, there is also struggle for a lot of families and it is seen when you drive through the country. You have people selling fruits, vegetables, coconuts – anything really to make money. With minimum wage being $50 US dollars per week, you can only imagine how excited Jamaican’s are when a car pulls over to buy something from their shop. It was hard for me at times understanding the strong accents and use of “Patois” (Jamaican slang) when buying fruits and vegetables, but after a few days I picked up on it again. For example, if I wanted to say “What’s going on” or “See you tomorrow” in Patois, it would be “Wa gwan” and “”See you inna di lights”. It was quite the adventure trying to have conversations with the locals, but overall a very memorable trip – “ya mon”!
Today In History:
1827 – New Orleans held its first Mardi Gras celebration.
1867 – Dr. William G. Bonwill invented the dental mallet.
1896 – The “Charlotte Observer” published a picture of an X-ray photograph made by Dr. H.L. Smith. The photograph showed a perfect picture of all the bones of a hand and a bullet that Smith had placed between the third and fourth fingers in the palm.
1922 – The U.S. Supreme Court upheld the 19th Amendment that guaranteed women the right to vote.
1949 – Chaim Weizmann became the first Israeli president.
1974 – “People” magazine was first issued by Time-Life (later known as Time-Warner).
1981 – Chrysler Corporation was granted an additional $400 million in federal loan guarantees. Chrysler had posted a loss of $1.7 billion in 1980.
1997 – In Ireland, divorce became legal. .
Photo of the Day – February 27th, 2013
Kashmiri boatmen wait for customers as mountains stand covered with snow in the background, at Dal Lake in Srinagar, India. Snowfall in the Indian portion of Kashmir has disrupted power supply and road traffic between Srinagar and Jammu, the summer and winter capitals of India’s Jammu-Kashmir state. Mukhtar Khan/AP
Market Closes for February 27th, 2013
|Bonds||% Yield||Previous % Yield|
10 Year Bond
10 Year Bond
30 Year Bond
|WTI Crude Future||92.76||92.63|
By Lindsey Rupp
Feb. 27 (Bloomberg) — Canadian stocks rose for a second day amid better-than-estimated U.S. economic data and as European shares rebounded on gains in Italian bonds.
Canadian Pacific Railway Ltd. jumped 3.2 percent and Canadian National Railway Co. climbed 1 percent to pace gains in transportation shares. Goldcorp Inc. fell 1.6 percent and Barrick Gold Corp. lost 1.4 percent as gold futures slipped for the first time in three days. Financial shares added 0.4 percent ahead of banks’ earnings announcements tomorrow.
The Standard & Poor’s/TSX Composite Index rose 71.95 points, or 0.6 percent, to 12,732.39 at 4 p.m. in Toronto. The S&P/TSX has risen 2.4 percent this year.
“People are feeling a little bit confident,” Peter Buchanan, senior economist at CIBC World Markets, said in a phone interview. “We’ll have to see if that confidence is warranted. Gold has traditionally been an inflationary hedge, but in the last year or two demand has clearly been driven by recession fears.”
Gold futures fell 1.2 percent to settle at $1,595.70 an ounce on the Comex in New York today. The metal is set to drop for a fifth month, the longest run of monthly losses since 1997, on signs global economic growth is improving, curbing demand for gold as a protection of wealth.
Goldcorp declined 1.6 percent to C$33.90 and Barrick Gold slid 1.4 percent to C$31.63.
Equities advanced as U.S. data showed contracts to purchase previously owned homes climbed more than forecast in January.
Orders for U.S. durable goods excluding transportation equipment increased in January by the most in a year. Federal Reserve Chairman Ben S. Bernanke said the central bank has the “tools” necessary to scale back record stimulus and avert a rise in inflation expectations, in congressional testimony that was identical to his remarks yesterday.
Stocks in Europe rebounded as Italy sold 6.5 billion euros ($8.5 billion) of five- and 10-year bonds in its first auction following inconclusive election results that pushed yields to a four-month high yesterday.
Canadian Pacific Railway jumped 3.2 percent to C$124.58 and Canadian National Railway climbed 1 percent to C$101.68.
Jefferies Group Inc. analyst Peter Nesvold called 2013 “the Year of Transports” in a note today, citing strength in auto sales and housing prices, increasing diesel consumption and better-than-anticipated airfreight volumes.
Royal Bank of Canada rose 0.4 percent to C$63.48. Toronto- Dominion Bank added 0.2 percent to C$84.29. Both are scheduled to report earnings tomorrow. Royal Bank, Toronto-Dominion and the country’s four other main lenders are expected to post a 6.9 percent increase in per-share profit excluding some items for the quarter, according to Darko Mihelic, an analyst at Cormark Securities Inc. in Toronto.
The nation’s banks, ranked the world’s soundest by the World Economic Forum for five straight years, face a consumer- lending slowdown as Canadians struggle with record debt levels and a cooling housing market.
First Quantum Minerals Ltd. rose 2.1 percent to C$19.27 after the company extended its C$5.1 billion ($5 billion) hostile takeover bid for Canada’s Inmet Mining Corp. by 12 days.
Inmet shareholders will now have until March 11 to accept the cash-and-stock offer, Vancouver-based First Quantum said today in a filing. The bid was previously due to expire today. Inmet gained 2.4 percent to C$66.89.
By Rita Nazareth and Sarah Pringle
Feb. 27 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a second day, as better- than-estimated housing data bolstered economic optimism and European shares rebounded amid gains in Italian bonds.
FedEx Corp., operator of the world’s largest cargo airline and an economic bellwether, added 2.5 percent to pace gains in transportation shares. Priceline.com Inc., the biggest online travel agency by market value, added 3.4 percent after revenue growth in international markets pushed profit past estimates.
Target Corp. slumped 1.1 percent as earnings fell amid the worst holiday-season store sales performance in four years. Apple Inc. tumbled 1 percent after its annual shareholder meeting.
The S&P 500 rose 1.3 percent to 1,515.96 at 2:34 p.m. in New York. The Dow Jones Industrial Average added 165.07 points, or 1.2 percent, to 14,065.20. The 30-stock gauge is less than 1 percent away from its October 2007 record. Trading in S&P 500 companies was about 9.6 percent below the 30-day average at this time of day, according to data compiled by Bloomberg.
“The housing market is proving a positive delta to the economy for this quarter and year,” David Katz, who oversees about $825 million as chief investment officer at New York-based Matrix Asset Advisors Inc, said in a phone interview. “The rally is driven by improvement in sentiment from Europe coupled with positive data.”
Equities rose as contracts to purchase previously owned U.S. homes climbed more than forecast in January, a sign the industry will keep strengthening this year. Orders for U.S. durable goods excluding transportation equipment climbed in January by the most in a year, indicating business investment is holding up.
Federal Reserve Chairman Ben S. Bernanke said the central bank has the “tools” necessary to scale back record stimulus and avert a rise in inflation expectations, in congressional testimony that was identical to his remarks yesterday to the Senate Banking Committee.
American stocks also joined a rally in Europe as Italy sold,6.5 billion euros ($8.5 billion) of five- and 10-year bonds in its first auction following inconclusive election results that pushed yields to a four-month high yesterday.
The S&P 500, which is trading less than 3.5 percent from its record, has gained 6.3 percent this year as lawmakers agreed on a compromise on taxes and amid better-than-estimated earnings. About 75 percent of the S&P 500 companies that have released quarterly results beat profit estimates, according to data compiled by Bloomberg. The index trades at 15 times reported earnings, below the average since 1954 of 16.4.
All 10 groups in the S&P 500 rose today as commodity and industrial shares had the biggest gains. The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 2.1 percent, its largest advance since Jan. 2.
The Dow Jones Transportation Average rallied 3.1 percent, its biggest advance since March. FedEx added 2.5 percent to $105.77 and United Parcel Service Inc. rose 1.4 percent to $83.05. The Bloomberg U.S. Airlines Index jumped 2.4 percent.
“Our call — that 2013 is poised to be ‘The Year of Transports’ — has gradually gained steam,” Peter Nesvold, an analyst at Jefferies Group Inc., wrote in a note today. He cited the strength in car and housing prices.
Priceline added 3.4 percent to $701.63. The company is racing with smaller rival Expedia Inc. to sell hotel reservations in Europe and Asia, where consumers are warming to booking travel online. Expedia, whose growth has lagged behind Priceline’s in recent years, said last month that international sales accounted for almost half of its fourth-quarter sales, a sign of improving growth opportunities abroad.
Coach Inc. advanced 3.5 percent to $48.12. The largest U.S. luxury-handbag maker rose after DealReporter said there is speculation the company may consider a sale. Coach is speculated to be exploring a sale, DealReporter said today, citing two bankers it didn’t name. Andrea Resnick, a spokeswoman for Coach, said the company doesn’t comment on speculation or rumors, “particularly unsubstantiated ones.”
LinkedIn Corp. gained 7.6 percent to $169.68 after Wunderlich Securities recommended buying the shares. The 12- month share-price estimate is $195.
Verisk Analytics Inc. jumped 9.3 percent to $58.91. The supplier of actuarial and risk data to lenders and insurers gained after fourth-quarter earnings beat analysts’ estimates on increased health-care revenue.
Deere & Co. rose 1.5 percent to $87.82. The world’s largest agricultural-equipment maker raised its quarterly dividend by 11 percent to 51 cents a share from 46 cents previously. The increase is the 11th since early 2004, the Moline, Illinois- based company said today in a statement. The boosted dividend is payable May 1 to holders of record on March 28.
Target dropped 1.1 percent to $63.34. Chief Executive Officer Gregg Steinhafel struggled to increase sales during the holidays after a luxury goods line co-branded with Neiman Marcus Group Inc. flopped with shoppers.
First Solar Inc. slumped 15 percent to $26.67. The biggest maker of thin-film solar panels said its “expected revenue” fell 15 percent last year and its goal for this year is to avoid slipping further. The shares plunged the most in five months.
Apple fell 1 percent to $444.70. Chief Executive Officer Tim Cook, saying he’s in “very, very active” talks about what to do with the company’s growing cash pile, did little to assuage investors seeking more clarity on his plans.
Apple shares slipped as Cook ended the company’s annual shareholder meeting without giving any additional insight on what he’ll do with the company’s $137.1 billion in cash and investments. Shareholders re-elected Apple’s board, approved Ernst & Young LLP as accountant and passed a non-binding measure on executive compensation.
Cook is under growing pressure to use increased dividends, stock buybacks or a new class of preferred shares to compensate investors after Apple shares have lost more than a third since peaking in September. The calls grew louder amid signs of slowing sales and profit growth and increasingly acute competition from Samsung Electronics Co. and Google Inc.
The CEO said he and other executives are “focused on the long term” and aren’t happy with the falling stock price.
Shareholders re-elected the company’s board and approved a non- binding measure on the executive compensation policy. Investors had been asked to vote on the board and Apple’s pay structure. The results were released at a meeting today at Apple’s headquarters in Cupertino, California.
Chief Executive Officer is being urged to return some of the $137.1 billion on Apple’s balance sheet to investors in the form of increased dividends, stock buybacks or new class of preferred shares. The calls have grown louder as the stock has fallen by about a third from a September peak amid concerns about slowing sales and profit growth.
At the meeting, Cook told shareholders the company is in “very, very active” discussions on cash. The CEO said he and other executives were “focused on the long term” and aren’t happy with the falling stock price.
Have a wonderful evening everyone.
Assistant to Carolann Steinhoff
Queensbury Securities Inc.
St. Andrew’s Square
Suite 340A, 730 View St.,
Victoria, B.C. V8X 3Y7