January 27th, 2012 Newsletter

Dear Friends,

Tangents:

Today  is Montreal author Mordecai Richler’s birthday. January 27^th, 1931.  Martin Levin writes in The Globe & Mail, “For young Mordecai Richler, the choice was always between the shtetl and the street, the rabbinic and the writerly.  Child of a distinguished religious clan that somehow made its way from Galicia to Montreal, he chose the street, and the writing life.  The street was St. Urbain, beating heart of emergent Jewish life in Canada, and Richler gave us a peerlessly detailed, often comic mapping of its terrain – psychological, social and emotional as much as physical – in such works as The Street and The Apprenticeship of Duddy Kravitz.  Richler may be said to have been shaped by two things: From the orthodoxy he rejected, he salvaged the search for moral values: from the Nazi destruction of European Jewry, he formed the will to be a truth-teller, a fearless witness to his age.”

I absolutely loved his writing and I’ve read everything he has ever written.  I used to go walk the streets in his novels when I lived in Montreal, and still do when I visit the city savoring nostalgia.

The National Post today has an article entitled Heroines of Auschwitz, written by Bernie M. Farber, the former CEO of the Canadian Jewish Congress and the son of a Holocaust survivor.    He writes, “On Jan. 27, 1945, 67 years ago today, the Soviet Army liberated Auschwitz.  From 1942 to late 1944, the concentration camp became the center of the wholesale murder….Yet within Auschwitz’s horror there were unique acts of bravery from which we must always take heart.  The courage of Anna (Wajcblum) Heilman and the women of the Auschwitz munitions factory is one such story.”  It is a very moving story of the heroics of these women.

photos of the day

January 27, 2012

Ultra-orthodox Jewish men pray at the Western Wall, the holiest site where Jews can pray, in Jerusalem’s Old City.

Bernat Armangue/AP

Denmark’s Prince Joachim and French-born princess Marie showed off their newborn princess for the first time to the public at Rigshospitalet in Copenhagen, Denmark. The baby was born Tuesday morning and weighed 6.45 pounds and measures 19.6 inches. The newborn is the couple’s second child and is 10th in line to Denmark’s throne.

Joachim Adrian/AP

Market Closes for January 27th, 2012

Market Commentary:

Canada

By Matt Walcoff

Jan. 27 (Bloomberg) — Canadian stocks rose, extending a sixth-straight weekly advance, after borrowing costs fell at an Italian debt sale and the U.S. dollar declined for a fifth day against the euro.

Barrick Gold Corp., the world’s largest gold producer, gained 1.6 percent as metal climbed after settling at a seven- week high esterday. Toronto-Dominion Bank, Canada’s second- biggest lender by assets, dropped 0.5 percent as financial stocks declined for a fourth day. Celestica Inc., which makes electronics for companies including Research In Motion Ltd., surged 5.1 percent after its fourth-quarter earnings beat the average analyst estimate.

The S&P/TSX Composite Index gained 38.78 points, or 0.3 percent, to 12,503.06 at 1:52 p.m. Toronto time, extending its weekly advance to 0.9 percent.

“The euro has come under so much pressure in the past few months, and indications out of Europe have turned a little more constructive,” Andrew Pyle, an associate portfolio manager at Bank of Nova Scotia in Peterborough, Ontario, said in a telephone interview. Pyle’s team oversees about C$200 million

($200 million). “Maybe the euro has found a bottom against the U.S. dollar, and that would help support gold.”

The index’s streak of weekly gains would be the longest since April 2009. Gold stocks rallied this week after the U.S.

Federal Reserve said it plans to keep interest rates at historical lows until at least late 2014 and the U.S. dollar retreated. Raw-materials companies make up 21 percent of Canadian equities by market value, according to Bloomberg data.

Italy’s Treasury sold 8 billion euros ($10.5 billion) of 182-day bills today at the lowest yields since May. It also sold

3 billion euros of 331-day bills. The U.S. dollar fell for a fifth day against the euro.

The S&P/TSX Gold Index headed for its biggest weekly rally since October. Barrick Gold Corp., the world’s largest producer of the metal, increased 1.6 percent to C$49.76. Yamana Gold Inc., Canada’s fourth-biggest company in the industry by market value, climbed 2 percent to C$17.46 to extend its weekly surge to 13 percent, which would be the most since October 2009.

Premier Gold Mines Ltd., which said yesterday it intends to enter a joint venture with Newmont Mining Corp. in Nevada, jumped 10 percent to C$5.83. Christos Doulis, an analyst at Stonecap Securities Inc., raised his 12-month price estimate on the shares to C$8.85 from C$8.50, citing the joint venture in a note to clients.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 2.5 percent to

C$47.12 after Robert B. Winslow, an analyst at National Bank, boosted his rating on the shares to “sector perform” from “underperform.” Winslow raised his earnings estimates for the company, citing “the potential for near-term upward pressure on grain prices” in a note to clients.

Financial stocks in the S&P/TSX fell after the U.S. said its gross domestic product increased at an annualized rate of

2.8 percent in the fourth quarter. Economists had forecast a 3 percent increase in GDP, according to the median estimate in a Bloomberg survey.

TD dropped 0.5 percent to C$77.46. Royal Bank of Canada, its larger domestic rival, slipped 0.5 percent to C$52.45.

Canadian Imperial Bank of Commerce, the country’s third-biggest lender by assets, declined 0.6 percent to C$74.83.

Celestica surged 5.1 percent to C$8.11 after its fourth- quarter profit surpassed the average estimates of analysts in a Bloomberg survey by 28 percent, excluding certain items. Gus Papageorgiou, an analyst at Scotiabank, increased his rating on the shares to “sector outperform” from “sector perform.”

US

By Rita Nazareth

Jan. 27 (Bloomberg) — U.S. stocks erased losses as banks rallied after the Obama administration said it will relax rules on a loan-modification program and optimism grew that Greece will reach a debt-restructuring agreement with bondholders.

Wells Fargo & Co. and Regions Financial Corp. added at least 2 percent, pacing gains among banks. Ford Motor Co.

slumped 3.6 percent as profit missed estimates on overseas challenges. Chevron Corp., the second-largest U.S. energy company, slid 2.2 percent after reporting its biggest earnings decline in two years. T. Rowe Price Group Inc., the asset manager that has posted a profit every quarter since going public in 1986, dropped 1.8 percent as earnings fell.

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

1,319.35 as of 3:45 p.m. New York time, after earlier declining as much as 0.5 percent. The Dow Jones Industrial Average retreated 43.67 points, or 0.3 percent, to 12,690.96 today.

The revised Home Affordable Modification Program, or HAMP, would pay Fannie Mae and Freddie Mac to forgive debt on homes that have lost value. The government-owned companies so far have refused to reduce principal, citing cost. Greek Finance Minister Evangelos Venizelos said the government was “one step away”

from completing talks on a voluntary debt swap and was negotiating with international creditors on the terms for a second financing package at the same time.

A gauge of banks rallied 1.2 percent, the biggest gain in the S&P 500 among 24 industries. Wells Fargo added 2 percent to $29.62. Regions Financial rose 2.3 percent to $5.29.

The rally in banks helped the market overcome earlier losses triggered by lower-than-forecast growth in the U.S.

economy. Gross domestic product, the value of all goods and services produced, climbed at a 2.8 percent annual rate following a 1.8 percent gain in the prior quarter. The median forecast of 79 economists surveyed by Bloomberg News called for a 3 percent increase. Growth excluding a jump in inventories was

0.8 percent.

Benchmark gauges rose earlier this week as Federal Reserve officials said they were concerned about the economy’s lack of vigor two years after the recession ended, prompting a pledge to keep interest rates low at least until late 2014. The Fed also didn’t rule out bond purchases to bolster the economy.

“Having the world’s economic locomotive showing signs of strain is adding to investors concern worldwide,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “The GDP report creates doubt about how solid the recovery is. It’s a very difficult environment to assess.”

The S&P 500 has risen 4.8 percent this year through yesterday, poised for the best January since it gained 6.1 percent during the first month of 1997, according to data compiled by Bloomberg. Of the 169 S&P 500 companies that reported results since Jan. 9, 112 posted per-share earnings that beat projections, according to data compiled by Bloomberg.

Solar shares gained as chief executive officers from Suntech Power Holdings Co. and Trina Solar Ltd. said China may double its installations of solar panels this year, absorbing excess production that depressed prices and margins in 2011.

Suntech added 6.8 percent to $3.46. Trina rose 7.4 percent to $8.68. First Solar Inc. climbed 12 percent to $45.73 for the biggest gain in the S&P 500.

Newell Rubbermaid Inc. gained 8 percent to $18.83. The maker of Sharpie pens and Graco car strollers reported fourth- quarter earnings of 40 cents a share, excluding some items, beating the average analyst estimate of 38 cents.

Eastman Chemical Co. rallied 6.4 percent to $50.12 after agreeing to buy Solutia Inc. for about $4.7 billion, including debt, to drive expansion into higher-margin specialty plastics and chemicals. Solutia surged 40 percent to $27.36.

The S&P 500 Automobiles & Components Index dropped 2.1 percent, the most among 24 industries. Ford slumped 3.6 percent to $12.28. In the fourth quarter, the Dearborn, Michigan-based automaker was hamstrung by a weakening European market and flooding in Thailand that wiped out profits in its Asian operations, Chief Financial Officer Lewis Booth said today.

Chevron slid 2.2 percent to $104.28. Chief Executive Officer John Watson has been selling oil refineries and filling stations in Europe and Africa to focus on higher-profit crude production and gas-liquefaction projects.

T. Rowe Price retreated 1.8 percent to $59.93. Net income decreased 1.7 percent to $188.4 million, or 73 cents a share, from $191.6 million, or 72 cents, a year earlier, the Baltimore- based company said today in a statement. Earnings per share increased as the number of outstanding shares fell 2.7 percent.

The average estimate of 12 analysts surveyed by Bloomberg was for profit of 69 cents a share.

Have a wonderful weekend everyone.

Be magnificent!

Man has lost his inner perspective, he measures his greatness by his size

and not by his vital attachment to the infinite ; he judges his activity by his own movement

and not by the serenity of perfection, not by the peace that exists in the starry vault,

in the rhythmic dance of incessant creation.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

Man is able to do what he is

unable to imagine.

-Rene Char, 1907-1988

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

Senior Vice-President &

Senior Investment Advisor