February 2, 2012 Newsletter

Dear Friends,

Tangents:

Groundhog day: Punxsutawney Phil first predicted weather 126 years ago and has had about 39% accuracy ever since. –HuffingtonPost.com

Birthdays: a couple of my favorite writers,

Ayn Rand, Born 1905

James Joyce, born 1882

Part of PBS’s celebration of Black History Month, Daisy Bates: First Lady of Little Rock, form “Independent Lens,” tells the story of an unconventional revolutionary who paid dearly for her public support of nine black students who registered to attend the all-white Central High School in Little Rock, Ark., which culminated in a constitutional crises – pitting a president against a governor and a community against itself.  It airs tonight.

photos of the day

February 2, 2012

Groundhog handler John Griffith holds famed weather prognosticating groundhog Punxsutawney Phil before Phil makes his annual weather prediction on Gobbler’s Knob in Punxsutawney, Penn., on the 126th Groundhog Day. Phil saw his shadow, signaling six more weeks of winter.

Jason Cohn/Reuters

A gargoyle in a fountain in Zurich, Switzerland, wears a beard of ice. A cold spell has reached central and eastern Europe with temperatures far below zero.

Alessandro Della Bella/Keystone/AP

Market Closes for February 2nd, 2012:

North American Markets

Market Commentary:

Canada

By Matt Walcoff

Feb. 2 (Bloomberg) — Canadian stocks rose for a third day, led by gold producers, after U.S. Federal Reserve Chairman Ben S. Bernanke said he sees signs the economy is improving and U.S.

initial jobless claims declined.

Goldcorp Inc., the world’s second-largest gold producer by market value, gained 2.1 percent as the metal advanced to a two- month high. Royal Bank of Canada, the country’s largest lender by assets, dropped 0.7 percent after Bank of Nova Scotia said it will sell shares. Open Text Corp., Canada’s biggest software company, rallied 15 percent in Toronto Stock Exchange trading after reporting earnings that beat the average estimate of analysts in a Bloomberg survey.

The S&P/TSX Composite Index increased 35.82 points, or 0.3 percent, to 12,553.48, the highest level since Sept. 8.

“Global economic growth seems to be improving,” Robert McWhirter, a money manager who oversees about C$140 million

($140 million) at Selective Asset Management Inc. in Toronto, said in a telephone interview. “Europe may continue to have its own problems, but the rest of the world is picking up in economic growth to offset some of that.”

The index has jumped 5 percent this year as the U.S.

reported declines in unemployment and the Federal Reserve extended its low-interest-rate pledge to late 2014. The U.S.

accounted for 75 percent of Canada’s exports in 2010, according to Statistics Canada. The Labor Department is scheduled to report January’s unemployment rate and payrolls data tomorrow in Washington.

Precious-metals producers rose with gold futures after the U.S. reported a bigger decline in first-time unemployment claims than most economists in a Bloomberg survey had forecast.

Bernanke told a congressional committee today that economic indicators “have shown some signs of improvement.”

Goldcorp advanced 2.1 percent to C$48.67. Barrick Gold Corp., the world’s biggest company in the industry, increased

0.9 percent to C$49.73. Silver Wheaton Corp., Canada’s fifth- largest precious-metals company by market value, rallied 1.2 percent to C$36.61, extending its streak of gains to seven days, the longest since August 2010.

NovaGold Resources Inc., which is developing mines in Alaska and British Columbia, sank 8.6 percent to C$9.44 after disclosing a 35-million-share offering at $9.50 a share.

Atac Resources Ltd., which explores for gold in Yukon, soared 23 percent, the most since September 2010, to C$3.87, to extend its six-day jump to 61 percent. The company has no announcements immediately pending and does not know the reason for the shares’ surge, Vanessa Pickering, a company spokeswoman, said in a telephone interview.

Wildcat Silver Corp., which is developing a mine in Arizona, surged 20 percent to C$2.03 after Graeme Jennings, an analyst at Cormark Securities Inc., began coverage of the company with a “speculative buy” rating. New Millennium Iron Corp., which has projects in eastern Canada, jumped 17 percent to C$2.44 after Adam Low, an analyst at Raymond James Financial Inc., assigned it an “outperform” rating in new coverage, citing the prospect of high ore prices.

Natural gas futures on the New York Mercantile Exchange gained 7.2 percent after the U.S. reported stockpiles declined more last week than most analysts in a Bloomberg survey had forecast. The fuel sank 45 percent in the year ending yesterday.

Encana Corp., the country’s largest natural gas producer, advanced for the first time in six days, increasing 5.3 percent to C$19.87. Tourmaline Oil Corp., a western Canadian natural gas and oil producer, climbed 3.3 percent to C$25.02.

Oil-sands developer MEG Energy Corp. rose 4.1 percent to

C$46.50 after reporting a fourth-quarter profit more than twice as high as the average analyst estimate in a Bloomberg survey, excluding certain items.

Canada’s six largest banks each dropped after Scotiabank, the country’s third-largest lender by assets, said it will sell

30 million shares at C$50.25 a share to help pay for acquisitions.

Royal Bank declined 0.7 percent to C$52.93. Bank of Montreal, Canada’s No. 4 lender, slipped 0.6 percent to C$58.43.

Scotiabank lost 0.9 percent to C$51.38 in TSX trading. In composite trading, which includes trading platforms that remained open after the company’s announcement yesterday, the shares rebounded 1.9 percent to C$51.38 after decreasing 2.2 percent yesterday.

Open Text surged 15 percent, the most since August 2010, to

C$60.34 in TSX trading after its second-quarter profit surpassed the average analyst estimate in a Bloomberg survey by 14 percent, excluding certain items. The shares gained 7.6 percent to C$60.34 in composite trading after soaring 10 percent yesterday.

Air Canada, the country’s largest airline, soared 9.5 percent to C$1.27 to extend its seven-day rally to 32 percent, the most since August 2009. The shares have advanced as Delta Air Lines Inc. and US Airways Group Inc. reported earnings that beat analysts’ average estimates.

US

By Michael P. Regan and Rita Nazareth

Feb. 2 (Bloomberg) — Most U.S. stocks gained as a drop in jobless claims fueled optimism about the economy before tomorrow’s employment data. Oil slid to a six-week low as supplies rose. The dollar and Treasuries were little changed.

The Standard & Poor’s 500 Index added 0.1 percent to

1,325.54 at 4 p.m. in New York as three stocks rose for every two that fell on U.S. exchanges. The Dow Jones Industrial Average lost 11.05 points to 12,705.41. The Stoxx Europe 600 Index reached to a six-month high as mining shares surged after Xstrata Plc confirmed takeover talks. The S&P GSCI Index of raw materials lost 0.5 percent as oil’s drop overshadowed a rally in natural gas. Ten-year U.S. Treasury yields were little changed at 1.83 percent. The Dollar Index rose less than 0.1 percent.

Federal Reserve Chairman Ben S. Bernanke told lawmakers in Washington that while the world’s largest economy is still vulnerable to shocks, measures of spending, production and jobs have improved. U.S. unemployment claims dropped by 12,000 to

367,000 last week. Olli Rehn, the European Union’s economic commissioner, said he expects a debt-swap agreement between Greece and private bondholders by the end of the week.

“It’s a wait-and-see approach,” Peter Jankovskis, who helps manage about $2.6 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “You have a number of people waiting for the jobs report tomorrow to make a decision which way they go. You have the ongoing negotiations on the Greek debt on the background. I wouldn’t read too much into today’s trading.”

U.S. stocks rose for a second day after yesterday halting a four-day retreat, the longest for the Dow since August.

Tomorrow’s monthly payrolls data is forecast to show employment grew by 140,000 last month after rising 200,000 in December and the jobless rate held at an almost three-year low of 8.5 percent, according to a Bloomberg survey of economists.

Gains among the 10 main S&P 500 industry groups were led by energy, financial and consumer-staples companies, while raw- materials producers, health-care companies and utilities declined.

MasterCard Inc., the second-largest payments network, jumped 6.7 percent after profit climbed 24 percent. Qualcomm Inc., the biggest maker of mobile-phone chips, advanced 2 percent after raising its sales and earnings targets. Green Mountain Coffee Roasters Inc., the maker of Keurig brand single- cup pods and brewers, surged 24 percent as profit exceeded estimates.

Profits have topped estimates at about 67 percent of the

246 companies in the S&P 500 that have released results since Jan. 9, data compiled by Bloomberg show. Earnings-per-share have increased 3.2 percent for the group on a 6.6 percent increase in sales.

Internet and social media companies rose after Facebook Inc. filed to raise $5 billion in an initial public offering.

Zynga Inc., the largest developer of games for Facebook, surged

17 percent. Groupon Inc., the biggest Internet daily-deal site, added 7.4 percent.

Oil slipped to a six-week low, dropping 1.3 percent to

$96.36 a barrel, after government data showed supplies climbed and fuel demand tumbled. Natural gas in New York rose 5.6 percent, the first advance in four days, following a bigger- than-forecast drop in U.S. stockpiles.

The Stoxx 600 rose for a third straight day. Shares of Xstrata Plc jumped 9.9 percent as the mining company said Glencore International Plc offered to buy the shares it didn’t already own. Glencore advanced 6.9 percent. Joining the two natural resources companies would combine the world’s largest listed commodity trader with a producer of coal, copper and nickel from Africa to Asia.

The MSCI Emerging Markets Index climbed 1.4 percent, heading for the highest close since Aug. 4. The Shanghai Composite Index gained 2 percent. Vietnam’s benchmark VN Index jumped 2.8 percent amid speculation policy makers will implement more measures to support the market.

Have a wonderful evening everyone.

Be magnificent!

Do we still not know that the appearance of a seed is in direct contradiction to its true nature?

If you submit the seed to a chemical analysis, you would find in it perhaps some carbon, proteins,

and many other things, but never the hint of the leaf of a tree.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Life is unchartered territory.  It reveals

its story one moment at a time.

-Leo Buscaglia, 1924-1998

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

Senior Vice-President &

Senior Investment Advisor