July 26th, 2011 Newsletter
Dear Friends,
Tangents: Summertime and the Living is Easy…
from The Book of Humorous Anecdotes, The Folio Society, London:
Kathleen Simons on holiday-
Family bonding – forget it. Instead of being a large extended family on a rural idyll in upstate Vermont, think Deliverance without the banjos and you’re getting close. This holiday feels more like a survival course we should have trained for. Spending time with blood relatives, at least two of whom hate you with a loathing that most people reserve for intestinal parasites, is not something you should undertake without specialist counselling, and perhaps a stiff drink.
There is a monosyllabic teenage girl whose hobby is slamming doors, and a squeaky-voiced 14-year-old who spends his time rocking to the beat of an invisible drum, relayed through earphones that seem to be permanently joined to his head. There’s the old family retainer – a Mexican housekeeper so ancient that the notion of her actually doing anything around the house is met with shocked silence.
Surely we are the only people who go on holiday with a cook who is purely decorative. Asking her to make a sandwich would be like asking the Queen Mother to trim your….Instead we serve her, planning our meals to make allowances for her high cholesterol and applauding her when she manages to put a plate of hot dogs on the table, as though Gordon Ramsay himself had cooked us dinner.
Then there’s my mother-in-law, who embraces her advancing deafness with the ardour of a naked starlet for a fluffy mink coat. My father-in-law calls me Sweetie through gritted teeth, except after lunch when two or three gin and tonics create an alcoholic good humour. Then he just doesn’t talk to me at all.
My two children, meanwhile, are welded to my leg, whining piteously about the dearth of television channels and the profusion of wildlife. Snakes lurk in the long grass, woodchucks, raccoons, squirrels and chipmunks proliferate, usually dead at the side of the road, and we’ve already been visited by Pepe Le Pew….
We can’t get a signal on the television, and the radio is permanently tuned to 1973. If I hear ‘Stand by Me’ again I’m going to make a mad dash for freedom, through the poison ivy, over the electric fence and straight to the nearest Dunkin’ Donuts. -The Times, 24th August, 2000
Photos of the day
July 26, 2011
Lovers clip padlocks onto the fence on the Pont des Arts bridge over the River Seine during summer holidays in Paris. Eric Gaillard/Reuters
Meagan Williamson runs through a wheat field in Kirby Hill, northern England. Nigel Roddis/Reuters
Market Commentary:
Canada
By Matt Walcoff
July 26 (Bloomberg) — Canadian stocks fell for a second day as financial companies dropped after President Barack Obama warned of a “deep economic crisis” if lawmakers there can’t agree on a plan to raise the debt ceiling by Aug. 2.
Toronto-Dominion Bank, Canada’s second-largest lender by assets, decreased 1.9 percent. Rogers Communications Inc., Canada’s largest wireless carrier, retreated 3.5 percent after reporting a decline in profits from its wireless unit. Canadian National Railway Co., the country’s biggest railroad, lost 4.2 percent after an analyst at Dahlman Rose & Co. cut his rating on the shares.
“We have this issue in the U.S. that seems to be hanging around for a while,” Sadiq Adatia, chief investment officer at Sun Life Global Investments in Toronto, said in a telephone interview. The unit of Sun Life Financial Inc. manages C$2.3 billion ($2.4 billion) for clients. “Canada’s looking over its shoulder at the U.S. If they have an issue down there, it’s going to affect us as well.”
The Standard & Poor’s/TSX Composite Index dropped 135.39 points, or 1 percent, to 13,300.56. The S&P/TSX rose 1 percent this month through yesterday as the European debt crisis and U.S. debt-ceiling deadlock led to gains in gold stocks and drops in financial companies’ shares.
The S&P/TSX Financials Index, the biggest part of the equity benchmark, is on pace to fall for a fourth-straight month for the first time since February 2009. Canada’s six largest banks each retreated as Obama battled with U.S. Republicans over how to cut the country’s debt. TD decreased 1.9 percent to C$78.68. Bank of Nova Scotia, Canada’s third-biggest lender by assets, fell 2.1 percent, the most in 11 months, to C$55.91. Manulife Financial Corp., North America’s fourth-largest insurer, slipped 1.4 percent to C$15.60.
S&P/TSX energy stocks retreated for the first time in six days as natural gas futures dropped. Canadian Natural Resources Ltd., Canada’s second-largest energy company by market value, lost 1.9 percent to C$40.62. TransCanada Corp., the owner of Canada’s largest pipeline system, retreated 1.3 percent to C$40.25. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, declined 2.4 percent to C$27.57.
Rogers dropped 3.5 percent, the most since October, to C$36.50. Profits excluding certain items from its wireless operations declined more than most analysts had estimated, Maher Yaghi, an analyst at Desjardins Securities, said in a note to clients.
CN lost 4.2 percent, the most in two years, to C$72.05 after reporting second-quarter earnings excluding certain items that surpassed the average analyst estimate in a Bloomberg survey by 0.6 percent. The profit trailed the forecast of Jason H. Seidl, an analyst at Dahlman Rose, by 3.1 percent. He cut his rating on CN to “hold” from “buy,” citing its share price and economic uncertainty. The shares had rallied 13 percent this year through yesterday.
Inmet Mining Corp., which produces copper and zinc in Turkey, Spain and Finland, plunged 4.9 percent to C$66.60. The company’s second-quarter profit trailed the average estimate in a Bloomberg survey by 30 percent, excluding certain items. Orest Wowkodaw, an analyst at Canaccord Financial Inc., cut his 12- month price estimate on the shares to C$87 from C$90.
Sino-Forest Corp., the forestry company fighting a short seller’s assertions of financial manipulation, rose 12 percent to C$7.12. The shares have doubled since July 18, the day before New Zealand billionaire Richard Chandler increased his stake in the company.
Cardiome Pharma Corp., which develops heart drugs, soared 28 percent to C$5.27 after saying it will transfer the North American development and commercialization rights for vernakalant (IV), also known as Kynapid, to Merck & Co. In a note to clients, Neil Maruoka, an analyst at Canaccord Financial Inc., raised his rating on the shares to “buy” from “hold.” “The addition of Cardiome’s long-standing partner to this program provides new clarity of the potential path to approval for this drug,” Maruoka wrote in a note to clients.
US
By Nikolaj Gammeltoft
July 26 (Bloomberg) — U.S. stocks fell for a second day amid wrangling between lawmakers over plans to raise the federal debt limit and forecasts from 3M Co. and United Parcel Service Inc. that disappointed investors.
3M lost 5.4 percent, the most in the Dow Jones Industrial Average, after projecting full-year earnings that trailed analysts’ estimates. UPS, the world’s largest package-delivery company, dropped 3.3 percent after saying the third quarter will be “fairly slow.” AK Steel Holding Corp. tumbled 17 percent, the most since 2008, as the steelmaker’s profit missed the average analyst estimate. Lexmark International Inc. rose 18 percent after reporting better-than-estimated earnings.
The S&P 500, which rallied 2.2 percent last week, dropped 0.4 percent to 1,331.94 at 4 p.m. in New York. The Dow lost 91.50 points, or 0.7 percent, to 12,501.30.
“We have multiple sources of uncertainty, including what’s happening in Washington with the debt ceiling,” Mark Freeman, co-chief investment officer at Westwood Management Corp. in Dallas, said in a telephone interview. His firm oversees $14 billion. “The longer the uncertainty goes on, the greater the risk is that it will negatively affect businesses.”
Negotiations over the nation’s debt limit have whipsawed stocks. Republicans and Democrats are sparring over separate plans to raise the federal debt limit and avoid a government default. House Speaker John Boehner said today his debt-limit plan can pass both chambers of Congress. President Barack Obama’s administration threatened a presidential veto of the two-step plan to raise the debt ceiling and cut $3 trillion in government spending.
Obama, in an address last night from the White House, said he remains confident that the stalemate can be resolved if both sides compromise. Both S&P and Moody’s Investors Service are weighing a downgrade of the U.S. credit rating. “The uncertainty over the debt ceiling issue is pushing the market down,” Sandy Villere III, who helps manage the Villere Balanced Fund at New Orleans-based St. Denis J. Villere & Co., said in a telephone interview. The firm oversees $1.5 billion and the fund has beat 97 percent of peers in the past five years. “But people will eventually peel off the layers of the onion and look at the good earnings that are still being produced.”
The S&P 500 rallied last week, erasing 81 percent of its loss since April 29 as Europe pledged support for Greece to end the region’s debt crisis and corporate profits topped analysts’ estimates. Since July 11, about 80 percent of S&P 500 companies that have released quarterly results beat projections, according to data compiled by Bloomberg.
Industrial shares led losses among eight of the 10 main groups in the S&P 500 today, falling 1.9 percent. 3M dropped 5.4 percent to $89.93 after the maker of Post-It Notes projected 2011 earnings that fell short of analysts estimates as lower demand for LCD televisions curbed sales in its display and graphics business, the company’s third-biggest unit.
UPS, a bellwether of the economy that handles goods ranging from financial documents to pharmaceuticals and industrial parts, tumbled 3.3 percent to $71.59 after saying in a conference call that the third quarter will be “fairly slow” before demand picks up in the last three months of 2011.
Equities pared losses as a report showed confidence among consumers unexpectedly rose in July from an eight-month low, led by a rebound in the outlook for jobs over the next six months.
The Conference Board’s index of consumer confidence climbed to 59.5 from a revised 57.6 reading in June that was lower than previously estimated. Economists predicted the July gauge would fall to 56, according to the median forecast in a Bloomberg News survey.
All 12 stocks in a gauge of homebuilders declined after a separate report from S&P/Case-Shiller showed home prices in 20 metropolitan areas declined 4.5 percent in May from the same month last year. The year-over-year decrease was the biggest since November 2009, adding to evidence the housing market is struggling. Other data showed sales of new homes unexpectedly declined for a second month in June.
AK Steel Holding, the third-largest U.S. steelmaker by sales, plunged 17 percent to $12.81 as it reported second- quarter profit excluding some items of 32 cents a share, missing the average analyst estimate by 36 percent, Bloomberg data show.
Netflix Inc. dropped 5.2 percent to $266.91 after its third-quarter sales and profit forecast missed estimates and the company said a price increase was crimping new-user signups.
Supervalu Inc. gained 6.9 percent to $9.11 as the supermarket chain reported first-quarter earnings of 35 cents a share, beating the average analyst estimate in a Bloomberg survey of 33 cents.
RadioShack Corp. surged 20 percent to $15.69 as the consumer-electronics retailer said it will provide Verizon Wireless products in its stores starting Sept. 15 and it was “comfortable with the range of analysts’ earnings estimates for the remainder of 2011.”
Baidu Inc., the owner of China’s most popular Internet search engine, climbed 5 percent to $164.36. The company said third-quarter sales will be at least $611.1 million, compared with the average analyst forecast for $568.4 million, Bloomberg data show.
Broadcom Corp., the supplier of communications chips for Apple Inc.’s mobile devices, rallied 9.4 percent to $38.20 after forecasting third-quarter sales that topped analysts’ predictions on booming demand for iPhones and iPads.
Lexmark International surged 18 percent, the biggest gain since 2000 and the most in the S&P 500, to $33.93. The maker of laser and inkjet printers reported second-quarter profit excluding some items of $1.36, beating the average $1.03 estimate of analysts surveyed by Bloomberg on strong demand from corporate customers.
Have a wonderful evening everyone.
Be magnificent!
No matter how insignificant the thing you have to do,
do it as well as you can,
give it as much of your care and attention as you would give to the thing
you regard as most important.
-Mahatma Gandhi, 1869-1948
As ever,
Carolann
One doesn’t have a sense of humor.
It has you.
-Larry Gelbart, 1928-2009