January 19th, 2012 Newsletter

Tangents:

I read an interview with Pierre Dukan, the diet guru (since Carole Middleton told a journalist that she followed his high-protein diet, sales of his book have soared in the UK, North America and even China) in the Financial Times last night. Can’t say I agree with him. However it is the time of year to check resolutions. This is interesting:

Lessons from a 16^th-century dieting bestseller

One of the most successful diet books, The Art of Living Long by a Venetian merchant named Luigi Cornaro (1464-1566), is still in print more than 450 years after it was first published in Padua in 1558.

It was an instant success, went through many editions, and was translated into many languages. Contemporaries such as Elyot, Boorde, Vaughan and Markham, concerned with what they perceived to be the problem of excessive eating and drinking, had read Cornaro’s “admirable diet”, a diet not far removed from the simple peasant food they all advocated.

A 1903 edition of The Art of Living Long was still advising its readers to take good heed of Cornaro’s work, and recommending the spirit of his approach, if not his life-and-death method, the strictness of which could, as today’s neurobehaviourists recognize, sometimes backfire….The first rule of Cornaro’s diet is to regain self-control. Gluttony, he believed, was not merely a personal sin but also a killer. He saw it as an almost apocalyptic force: it “kills every year…as great a number as would perish during the time of a most dreadful pestilence, or by the sword or fire of many bloody wars.” Citing the ancients, Galen Hippocrates, Plato and Cicero, he insisted with the zeal of a convert, on living a regular life with moderation…Physic , or medicine, was, for the most part, nothing but a substitute for the actual weight loss necessities of exercise and temperance.

People should eat little and frugally (today’s calorie restrictors are Cornaro’s direct dieting descendants) he advised, and he recommended a diet consisting of 12oz a day in bread, soups, yolks of new-laid eggs, meat, plus about 14oz of wine.

Extracted from ‘Calories and Corsets by Louise Foxcroft, published this month by Profile Books.

photos of the day

January 19, 2012

The Houses of Parliament are seen in early morning mist in central London.

Stefan Wermuth/Reuters

Ukrainians dance during celebration to mark the Epiphany in Kiev, Ukraine. Orthodox believers celebrate the holiday of the Epiphany on Jan. 19, and traditionally bathe in holes cut through thick ice on rivers and ponds to cleanse themselves with water deemed holy for the day.

Sergei Chuzavkov/AP

Market Closes for January 19th, 2012

Market Commentary:

Canada

By Ksenia Galouchko

Jan. 19 (Bloomberg) — Canadian stocks rose for a second day, led by financial and energy companies, as Bank of America Corp. reported a profit and U.S. unemployment claims fell to the lowest level in almost four years.

Bank of Nova Scotia, Canada’s third-largest bank, gained 2.6 percent after saying it is considering a sale of its Scotia Plaza office tower. PetroBakken Energy Ltd. increased 3.9 percent after selling an asset for C$105 million ($104 million).

Teck Resources Ltd., Canada’s largest copper producer, rallied 3.6 percent as the metal rose on prospects of demand from China.

The S&P/TSX Composite Index rose 44.07 points, or 0.4 percent, to 12,371.59 at 1:46 p.m. Toronto time.

“Investors are feeling a little bit more confident in the outlook for the financials,” Michael Sprung, president of Sprung & Co. Investment Counsel Inc. in Toronto, said in a phone interview. “They have been a harbor for the investors.”

The index climbed 0.8 percent in the two weeks ended yesterday as base-metals producers and financial companies gained as Goldman Sachs Group Inc. reported better-than-forecast earnings and copper imports to China rose to a record. The S&P/TSX trailed the S&P 500 last year for the first time since 2003 as drops in commodity prices held back the Canadian stock benchmark gauge.

S&P/TSX banks rose after Bank of America, the second- largest U.S. lender by assets, swung to a fourth-quarter profit and Morgan Stanley reported a smaller fourth-quarter loss than analysts estimated. The U.S. Labor Department reported jobless claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008.

Royal Bank of Canada, the country’s biggest lender by assets, gained 1 percent to C$52.96, after rising to C$53.18, the highest intraday price since July 22. Toronto-Dominion Bank, the country’s second-largest lender, increased 1.5 percent to C$78.45. National Bank of Canada gained 2.2 percent to C$75.55 after advancing to C$75.71, the highest intraday price since July 28.

Bank of Nova Scotia gained 2.6 percent to C$53.92 after rising to C$54.07, the highest intraday price since Sept. 27.

Canada’s third-largest bank said it is considering a sale of its Scotia Plaza office tower, one of the largest skyscrapers in Toronto’s financial district.

Financial companies comprise 28 percent of Canadian equities by market value, the most of any 10 industry groups, according to Bloomberg data.

PetroBakken Energy gained 3.9 percent to C$15.56 and rose to C$15.87 earlier, the highest intraday price since June 6, after selling its interest in the southeast Saskatchewan Weyburn unit to an undisclosed buyer. The shares were raised to “outperform” from “sector perform” at Alta Corp Capital Inc.

Petrobank Energy & Resources Ltd., the majority owner of PetroBakken, advanced 5.4 percent to C$13.75.

Bankers Petroleum Ltd. rallied 3.5 percent to C$5.38 after rising as much as 4 percent earlier, after Tudor Pickering said it sees the company as “viable” acquisition target.

Copper increased to a 17-week high in New York on speculation China will ease credit controls as growth slows, potentially bolstering demand prospects in the world’s largest user of the metal. Copper imports into China rose to a record and fourth-quarter economic growth in the country topped economists’ estimates, figures showed this month.

“The sentiment in respect to the growth in China seems to be a driving force in the Canadian market and the commodities gains,” Sprung said. “Any sign that growth there won’t contract is taken as a positive sign.”

Lundin Mining Corp., which produces base metals in Europe, climbed 2.6 percent to C$5.17, after rising to C$5.23, the highest intraday price since Sept. 8.

Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi project in Mongolia, rallied 1.5 percent to C$19.60. Teck Resources rallied 3.6 percent to C$42.38.

HudBay Minerals Inc., which mines copper, gold and zinc, rallied 4.2 percent to C$11.46.

Finning International Inc. rose 3.3 percent to C$26.97 after climbing to C$27.27, the highest intraday price since Aug.

2. The world’s biggest Caterpillar dealer had its rating raised to “outperform” from “market perform” at Raymond James Financial Inc.

Grande Cache Coal Corp. fell 6.5 percent to C$9.28 after dropping 12 percent, the most since October. The Calgary-based coal producer fell after Winsway Coking Coal Holdings Ltd., a Chinese miner that agreed to buy Grande Cache in October, was targeted by a short seller. Winsway, which denied the allegations by Jonestown Research that it imported less coal than reported, declined 8.6 percent in Hong Kong.

A gauge of gold stocks in the S&P/TSX fell for a third day as the declined from a five-week high after the drop in the unemployment benefits claims revived prospects for economic growth and eroded the appeal of precious metals as a hedge.

Barrick Gold Corp. fell 3.2 percent to C$46.98 after declining to C$46.96 earlier, the lowest intraday price since Jan. 3. Kinross Gold Corp., Canada’s third-largest gold producer, tumbled 3.6 percent to C$10.16 after falling to C$10.10, the lowest price since 2008.

North American Palladium Ltd. fell 10 percent to C$2.42, declining to C$2.35 earlier, the lowest intraday price since Oct. 6

US

By Rita Nazareth

Jan. 19 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index higher for a third straight day, as Bank of America Corp. rallied after swinging to a profit and jobless claims plunged to the lowest level in almost four years.

Bank of America, the second-largest U.S. lender, climbed 2.4 percent. Morgan Stanley added 5.4 percent after the owner of the largest brokerage reported a smaller-than-estimated loss.

Union Pacific Corp. jumped 2.2 percent to the highest level since 1980 as the biggest U.S. railroad’s profit beat forecasts.

Eastman Kodak Co. tumbled 46 percent in over-the-counter trading after the photography pioneer filed for bankruptcy.

The S&P 500 added 0.5 percent to 1,314.50 at 4 p.m. New York time. The Dow Jones Industrial Average gained 45.03 points, or 0.4 percent, to 12,623.98. The Nasdaq-100 Index rose 0.7 percent to 2,441.70, the highest level since 2001. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses in the S&P 500, declined below 20 for the first time since July.

“There has been some relief that financials might be along for the ride,” Brian Jacobsen, who helps oversee about $209 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said in a telephone interview. “A lot of the pessimism has been baked into the cake. We’re more likely to see positive surprises.”

Of the 35 companies in the S&P 500 that reported results since Jan. 9, 22 posted per-share earnings that beat projections, according to data compiled by Bloomberg. The S&P 500 has gained 4.5 percent so far in 2012, the most since it rose 4.8 percent over the first 12 days in 1997, according to data compiled by Bloomberg.

Today’s rally in stocks was helped by optimism that the U.S. economy will be able to weather Europe’s debt crisis.

Claims for jobless benefits last week dropped to the lowest level since April 2008, pointing to an improvement in the U.S. job market that may help bolster spending in the new year.

“We’re in a fragile economy, we’re not going to have robust growth, but it’s going to take us a lot of things to derail,” Richard Weeks, the Vienna, Virginia-based managing director and partner at HighTower’s VWG Wealth Management. His firm oversees about $20 billion. “You’ve seen big corporations navigate through very difficult times.”

The Dow Jones Transportation Average, a proxy for the economy, increased 1.6 percent. Gauges of diversified financial and transportation shares added at least 1.5 percent, leading the gains among 24 industries in the S&P 500.

Bank of America rallied 2.4 percent, the most in the Dow, to $6.96. Chief Executive Officer Brian T. Moynihan is cutting assets, expenses and staff while raising capital to meet demands from regulators for a larger cushion against unexpected losses.

Morgan Stanley climbed 5.4 percent to $18.28. Morgan Stanley posted the only increase in trading revenue excluding accounting gains among the five largest Wall Street banks in 2011, making progress toward Chairman and Chief Executive Officer James Gorman’s goal of boosting market share.

Union Pacific gained 2.2 percent to $112.18. Carloads advanced 3 percent in the quarter, with auto and chemical shipments leading gains as a strengthening recovery boosted demand. Energy and industrial products deliveries also rose.

EBay Inc. jumped 3.9 percent to $31.51. The largest Internet marketplace reported sales and profit that topped analysts’ estimates, buoyed by a campaign to promote its expanded retail offerings and broader use of the PayPal online- payments service.

Some of the largest technology companies reported results after the market closed today.

Intel Corp., the biggest chipmaker, predicted revenue that may top estimates. International Business Machines Corp., the largest computer-services provider, and Microsoft Corp., the biggest software maker, reported earnings that beat forecasts.

Google Inc., owner of the most popular Internet search engine, reported revenue that fell short of analysts’ projections.

Intel rose 0.4 percent to $25.73, while IBM added 2.5 percent to $185.01, and Microsoft jumped 1.8 percent to $28.62 at 5:09 p.m. New York time. Google tumbled 8.5 percent to

$585.26 after the close of regular trading.

Sears Holdings Corp. advanced 9.8 percent to $43.35 following a report that CIT Group Inc. will approve financing for the retailer’s vendors as soon as today. CIT is looking for more detailed information on Sears’s financing and may require letters of credit for all orders, Women’s Wear Daily reported, citing unidentified people familiar with the plan. CIT is the largest U.S. company that provides what’s known as factoring.

Credit Suisse Group AG’s Andrew Garthwaite lifted his 2012 forecast for the S&P 500 to 1,400, citing the European Central Bank’s refinancing plans for banks as a “potential game changer.” Garthwaite, the London-based global equity strategist at the firm, had previously estimated the benchmark gauge for U.S. equities would climb to 1,340 at the end of 2012.

Eastman Kodak Co. slumped 46 percent to 30 cents in over- the-counter trading. The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S.

Bankruptcy Court in Manhattan. The company’s stock symbol changed today to “EKDKQ” from “EK.”

Johnson Controls Inc. plunged 8.8 percent to $32.46. The largest U.S. auto supplier lowered its forecast for profit for the fiscal year on weakening demand for replacement batteries and a reduced outlook for vehicle assembly in Europe.

Solar companies slumped after Germany said it will make monthly subsidy cuts to slow demand for panels in the country, the world’s largest market. Suntech Power Holdings Co., the biggest solar-panel maker, fell 14 percent to $3.20. First Solar Inc. declined 10 percent to $38.70.

Have a wonderful evening everyone.

Be magnificent!

There are thousands of lives in one single life.

-Swami Prajnanpad,1891-1974

As ever,

Carolann

Life is occupied in both perpetuating itself and in

surpassing itself. If all it does is maintain itself,

then living is only not dying.
-Simone de Beauvoir, 1908-1986

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

Senior Vice-President &

Senior Investment Advisor