February 7, 2012 Newsletter

Dear Friends,

Tangents:

Today is the 200^th anniversary of Charles Dickens birthday.   Author of so many characters and aphorisms indelibly impressed on our minds from Great Expectations, David Copperfield, A Christmas Carol, Oliver Twist, among others, he probably ranks only second to Shakespeare.

It was the Best of times, it was the worst of times…

There are celebrations happening all over the world, including a street party in Portsmouth, southern England, where he was born.

In this undated file photo, novelist Charles Dickens poses for a photograph. Britain’s Prince Charles will lay a wreath at Dickens grave in Poet’s Corner, Westminster Abbey, to mark his 200th birthday.

AP/File

Market Closes for February 6, 2012:

North American Markets

Market Commentary:

Canada

By Katia Porzecanski and Matt Walcoff

Feb. 7 (Bloomberg) — Canadian stocks fell for a second day as commodities producers dropped after reports from China and Germany signaled that demand may slow.

First Quantum Minerals Ltd., the country’s second-biggest publicly traded copper producer, decreased 2 percent. Nevsun Resources Ltd., which mines gold in Africa, plunged 30 percent after saying production may tumble by half this year. Canadian Natural Resources Ltd, the country’s second-largest energy company by market value, fell 3.7 percent as it said it will curtail production because of unplanned maintenance.

The S&P/TSX Composite Index dropped 41.22 points, or 0.3 percent, to 12,518.63 at 3:00 p.m. Toronto time. The benchmark equity index hasn’t declined two straight days since Dec. 15.

“China is the marginal driver of the Canadian stock market,” Mathieu Roy, a money manager at Louisbourg Investments Inc. in Moncton, New Brunswick, said in a telephone interview.

“A healthy China that grows quickly and can manage inflation will go a long way into the success of the Canadian stock market.”

The S&P/TSX gained 5.1 percent this year through yesterday as raw-materials and energy companies advanced in part on manufacturing data from the U.S., Europe and China that surpassed most economists’ forecasts in Bloomberg surveys.

Resources companies make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

Chinese industrial output growth is likely to decline from December’s pace of 12.8 percent a year due to a slowing global economy and the European debt crisis, the Ministry of Industry and Information Technology said today in Beijing.

German factory production retreated 2.9 percent in December, the country’s Economy Ministry reported today. Most economists in a Bloomberg survey had forecast an increase or no change from November.

Base-metals producers dropped as copper fell as much as 1.8 percent on the Comex in New York before erasing its decline.

Teck declined 2.4 percent to C$41.47. First Quantum Minerals lost 2 percent to C$22.19.

Nevsun sank 30 percent to C$4.45 after plunging as much as

31 percent, the most intraday since October 2008. The company said production may fall 50 percent this year after it revised its reserve estimate for the Bisha mine in Eritrea.

The S&P/TSX Energy Index fell 0.8 percent, the most intraday since Jan. 30. Energy stocks slipped as natural gas fell on the New York Mercantile Exchange on speculation that a government report will show a smaller-than-normal drop in U.S.

inventories, boosting a surplus of the fuel over the five-year average.

Canadian Natural Resources lost 3.7 percent to C$38.79. The country’s second-largest energy company by market value said it curtailed production because of unplanned maintenance at the Horizon upgrader. Enerflex Ltd., which provides products and services to the energy industry, fell 2.3 percent to C$12.65.

Gold producers gained as the precious metal climbed for the first time in three sessions after the U.S. dollar weakened, increasing demand for the commodity as an alternative investment.

Goldcorp Inc., the world’s second-largest producer by market value, rallied 1 percent to C$47.75.

Golden Star Resources Ltd., the owner of the Bogoso/Prestea mine in Ghana, rallied 2.5 percent to C$2.08. Avion Gold Corp.

rose 4.1 percent to C$1.54 after announcing drilling results.

US

By Rita Nazareth and Michael P. Regan

Feb. 7 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average above its highest closing level since May 2008, while Treasuries fell and the euro strengthened as Greece’s government made progress on measures to secure international aid. Crude oil led gains in commodities.

The Dow increased 27.81 points, or 0.2 percent, to

12,872.94 at 1:20 p.m. in New York and the Standard & Poor’s 500 Index was up 0.1 percent after slipping as much as 0.6 percent earlier. Ten-year Treasury yields increased seven basis points to 1.98 percent and the euro advanced 0.9 percent to $1.3243.

Oil rallied 1.5 percent to $98.38 a barrel.

Greece’s government and international creditors are working on the final draft of an agreement on budget and structural measures needed to free up a second aid package, a Greek official said. Prime Minister Lucas Papademos plans to convene the nation’s political leaders to seek consensus on the cuts required for a bailout, as unions called a strike to protest and European leaders pressed Greece to reach a deal.

“Greece is on the front page again,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees

$160 billion. “It’s been the theme for at least a year that you had to take these governments near the edge of the abyss and look into it before they would agree to additional cuts or fiscal tightening or other types of concessions to get money.”

The S&P 500 declined yesterday for the first time in four days, retreating from a six-month high. The index is up 7.2 percent so far in 2012 and has rallied almost 23 percent from last year’s low in October.

Coca-Cola Co. climbed 1.1 percent to help lead gains in the Dow today after the world’s largest soft-drink maker reported fourth-quarter profit that topped analysts’ estimates as teas and juices boosted sales in Asia.

Yum! Brands Inc., owner of the KFC and Taco Bell fast-food chains, climbed 2.9 percent as profit surged 30 percent.

Walgreen Co., the largest U.S. drugstore chain, slid 1.8 percent after Citigroup Inc. cut its recommendation for the shares.

Becton Dickinson & Co., a maker of medical devices and supplies, slumped 3.8 percent after a disappointing forecast.

Walt Disney Co. is among seven companies in the S&P 500 scheduled to release earnings after markets close today, according to data compiled by Bloomberg. Profits have beaten estimates at about 68 percent of the 280 companies in the S&P

500 that have released results since Jan. 9, data compiled by Bloomberg show. Earnings-per-share have increased 3.5 percent for the group on a 6.5 percent increase in sales.

U.S. Treasuries remained lower after the U.S. sold $32 billion of three-year notes in the first of three auctions this week totaling $72 billion.

Federal Reserve Chairman Ben S. Bernanke repeated that the job market is still far from healthy after signs of economic improvement over the past year, and he called on U.S. lawmakers to reduce the long-term budget deficit.

“We still have a long way to go before the labor market can be said to be operating normally,” Bernanke said in testimony prepared for the Senate Budget Committee that is identical to remarks he gave on Feb. 2 to the House Budget panel. “Particularly troubling is the unusually high level of long-term unemployment.” The jobless rate unexpectedly fell to

8.3 percent in January, a government report showed last week.

The Stoxx Europe 600 Index slipped 0.3 percent, paring a loss of as much as 1 percent. Swatch Group AG sank 4 percent after the largest Swiss watch maker reported 2011 operating profit that missed analysts’ estimates. Alfa Laval AB, the world’s biggest maker of heat exchangers, sank 7.1 percent as fourth-quarter orders declined from the previous three months because of contraction in the shipbuilding industry.

Greek Prime Minister Papademos will issue a statement tonight at the conclusion of a meeting with political leaders on measures and policies Greece has agreed in return for a second financing package, a spokeswoman at the premier’s office in Athens said. The spokeswoman, who declined to be named, said the Cabinet would meet tomorrow at around midday to approve the accord and that a meeting of euro area finance ministers was likely to be held on Feb. 9 on the bailout agreement.

The MSCI Emerging Markets Index was little changed after yesterday slipping 0.1 percent from a six-month high. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong dropped 0.6 percent. The Shanghai Composite Index slid

1.7 percent, the most in six weeks, after China’s government said industrial output growth is likely to slow this quarter as the world economy cools and Europe’s debt crisis worsens.

A “hard landing” for China is a key risk for the global economy, Andrew Colquhoun, the Hong Kong-based head of Asia- Pacific ratings for Fitch Ratings, said in an e-mail.

The yen weakened versus all 16 most actively traded peers after Finance Ministry data released today showed Japan conducted 1.02 trillion yen ($13.3 billion) worth of unannounced intervention during the first four days of November, after selling a record 8.07 trillion yen on Oct. 31, when the yen climbed to a post World War II high of 75.35 per dollar.

The Australian dollar appreciated 0.6 percent to $1.0787 after the Reserve Bank of Australia signaled optimism global economic growth will strengthen.

Have a wonderful evening everyone.

Be magnificent!

We must always bear in mind

that we are not going to be free,

but are free already.

Every idea that we are bound is a delusion.

Every idea that we are happy or unhappy

is a tremendous delusion.

-Swami Vivekananda, 1863-1902

As ever,

Carolann

Because of our routines we forget that life

is an ongoing adventure.

-Jean Atwater

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

Senior Vice-President &

Senior Investment Advisor