July 7th, 2011 Newsletter

Dear Friends,

 Tangents:

I attended the service at Christ Church Cathedral this afternoon for one of Victoria’s greats, Jane Heffelfinger, who was remembered in a most serene setting with resonating tributes. The Hon. Dr. Lloyd Axworthy spoke at length about her engaging personality and vivacity, her love of all people, her determination to fight for justice and see wrongs righted, her generous contributions of time and energy to so many causes.   

Jane was a co-founder of Pacific Opera Victoria and was passionate about music.  Captivated by her passion and charm, I, along with so many others, became the willing sponsor of many an opera production when she was Chair.  And for many years we had season tickets to the same Saturday evening performances of Seattle Opera.

As Chair of the Greater Victoria Hospital Foundation’s first Capital Campaign, which was launched in 1995, she recruited me to become a member of her 25 person Campaign Cabinet, where we managed to raise $13 million for our hospital system.

I also know first-hand of her caring and considerate nature when she supported my nomination for the Women of Distinction Awards.  I am honored to have known this remarkable woman in my lifetime.

When we walked out of the Cathedral, strong winds blew up…

Morgen

     -by Richard Strauss

 And tomorrow the sun will shine again.

        And on that path I shall take

Will we, the happy ones, meet once again

In the midst of this sun-breathing earth…

 And to the shore, to the broad, blue waves

    We will go silently and slowly down.

   Mute, we will look in each other’s eyes

And the mute silence of happiness will descend

                               on us…

Photo of the day 

July 7, 2011

A pedestrian walks past a man busking in central Melbourne, Australia. Mick Tsikas/Reuters

Market Commentary:

Canada

By Matt Walcoff

July 7 (Bloomberg) — Canadian stocks rose for the seventh time in eight days, led by energy companies, as crude oil futures advanced to a three-week high after U.S. employment reports bolstered confidence in the economy.

Suncor Energy Inc., Canada’s largest oil and gas producer, gained 1.5 percent as crude futures rose 2.1 percent after ADP Employer Services said U.S. payrolls increased last month by more than twice the amount forecast by economists. Metals explorer European Goldfields Ltd. surged 11 percent after Greece said it will decide on the company’s mine-permit application within a month. Telecommunication shares retreated from their highest valuations relative to earnings since 2008.

The Standard & Poor’s/TSX Composite Index rose 2.9 points, or less than 0.1 percent, to 13,406. The index had gained as much as 0.5 percent before erasing most of its gains in the last hour of trading.

“Oil prices reflect a perceived better environment” economically, said Greg Eckel, a money manager at Morgan Meighen & Associates Ltd. in Toronto, which oversees about C$1 billion ($1.04 billion). “Today, you had a decent ADP jobs report, and you’ve got a lot of estimates of a better second half.”

The stock benchmark fell for the first time in seven days yesterday, trimming its gain since June 24 to 3.8 percent. The S&P/TSX has rallied as European leaders took action to prevent a Greek default and a gauge of U.S. manufacturing surpassed economists’ forecasts.                        

U.S. payrolls increased by 157,000 jobs last month, according to ADP, a unit of Roseland, New Jersey-based Automatic Data Processing Inc. Jobless claims fell by 14,000 to 418,000 in the week ended July 2, U.S. Labor Department figures showed. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000.

Crude oil extended its weekly climb to 3.8 percent in New York. Suncor rose 1.5 percent to C$39.22. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, gained 1.3 percent to C$41.67. Cenovus Energy Inc., Canada’s No. 5 company in the industry, advanced 3 percent to C$36.60.

Oil-sands developer BlackPearl Resources Inc. increased 5 percent to C$6.93 after Steve Toth, an analyst at Canaccord Financial Inc., raised his rating on the stock to “buy” from “hold.” In a note to clients, Toth cited the shares’ 23 percent plunge from Feb. 15 to yesterday.

European Goldfields jumped 11 percent to C$12.31, extending its three-day gain to 22 percent. Greece will make an announcement within a month on the permitting on the company’s projects in the country, George Papaconstantinou, the minister of environment, energy and climate change, said at a presentation in Athens today.                         

Telecommunication companies declined after reaching their highest price relative to earnings since August 2008 yesterday.

The industry has ranked second in gains this year among 10 groups in the S&P/TSX as low interest rates and bond yields have encouraged investors to buy stocks that pay higher-than-average dividends.

“People do realize rates at some point have to go up,” Eckel said. “Valuations may be stressed at this point.”

Rogers Communications Inc., Canada’s largest wireless carrier, lost 2.1 percent to C$37.90. BCE Inc., the country’s biggest phone company, decreased 1.4 percent to C$37.84.

TransCanada Corp., a pipeline company that pays a dividend yield of 4 percent, retreated 2 percent to C$40.75. The company’s Keystone XL project may face delays as long as two years because of landowners’ opposition, Bloomberg News reported today.

BlackBerry maker Research In Motion Ltd. rallied 4 percent to C$27.87 after saying it has added 1 million new subscribers in Europe, the Middle East and Africa in less than three weeks.

The company made the statement on Twitter.

US

By Nikolaj Gammeltoft and Victoria Stilwell

July 7 (Bloomberg) — U.S. stocks jumped, sending the Standard & Poor’s 500 Index close to a three-year high, as retail and job market data bolstered confidence in the economy.

Target Corp., the second-largest U.S. discount retailer, and Kohl’s Corp. rose at least 6.6 percent as June retail sales surpassed analysts’ projections. Urban Outfitters Inc. rallied 6 percent after Morgan Stanley recommended investors buy the shares. JPMorgan Chase & Co. climbed 1.9 percent as banking shares soared.

The S&P 500 Index climbed 1.1 percent to 1,353.22 at 4 p.m. in New York, its highest closing level since May 10. The Dow Jones Industrial Average rose 93.47 points, or 0.7 percent, to 12,719.49, as a report by ADP Employer Services showed U.S. companies added more jobs than forecast in June. Volume on U.S. exchanges totaled about 6.8 billion at 4:30 p.m., 4 percent less than the three-month average through yesterday.

 “We’re starting to cycle through the list of issues that have been on investors’ minds,” said Christopher Blum, New York-based chief investment officer for the U.S. behavioral finance group at JPMorgan Asset Management, which oversees $1.9 trillion in assets. “Economic data is coming in better than expected, and certainly the beat on the jobs number today came earlier than most investors had expected.”

The S&P 500 has climbed 6.7 percent over the past eight days, with last week’s gain the biggest since July 2009. The index is about 10 points shy of a three-year high reached April 29. Through June 24, U.S. equities had fallen for seven of the previous eight weeks on concern that the European debt crisis would spread and the U.S. economy slow. The index still has gained 7.6 percent for the year amid better-than-expected earnings and government stimulus measures.                         

Equities rose today as figures from ADP showed companies in the U.S. added 157,000 workers to their payrolls in June. The median estimate of economists surveyed by Bloomberg News called for an advance of 70,000. The data comes before the government’s June payrolls report tomorrow.

Separate data from the Labor Department showed jobless claims fell by 14,000 to 418,000 last week, compared with the median forecast of economists for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments also declined.

“These kind of employment numbers are supportive for the market,” said Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $355 billion. “Unemployment is the single most dominant statistic in our national debate right now, it shadows all the other economic and political debates and it shapes the sentiment which surrounds the stock market.”                       

Measures of fuel and materials companies climbed 1.4 percent and 1.5 percent, respectively, while the Morgan Stanley Cyclical Index added 1.3 percent on speculation that the U.S. labor market may be stronger, indicating that job growth could accelerate in the second half of the year and demand for commodities will improve.

Investors next week also will be turning their attention to second-quarter earnings. The season starts July 11 with Alcoa Inc., the first Dow company to release results. Corporate earnings are forecast to have grown by 13 percent, according to estimates compiled by Bloomberg.

Retailers in the S&P 500 rallied 2.4 percent today to a record. Sales reports indicated that shoppers took advantage of discounts that retailers implemented in June to clear out inventory and make room for back-to-school merchandise. Lower gas prices and warmer temperatures also enticed consumers. Gas prices in the U.S. have declined 10 percent since a high of $3.99 a gallon on May 4, according to AAA.

Target jumped 6.7 percent to $51.67 while Kohl’s, the department-store chain that’s been in business since 1962, soared 7.1 percent to $55.78.

Limited Brands Inc., operator of the Victoria’s Secret chain, rose 2.7 percent to $40.36 after posting a gain of 12 percent in same-store sales for June, surpassing the 4.4 percent average of analysts’ estimates compiled by Retail Metrics Inc.

Urban Outfitters, a clothing retailer, climbed 6 percent to $32.58 after Morgan Stanley raised the stock to “overweight” from “equal weight.”

Financial companies rose 1.6 percent, the biggest gain among 10 groups in the S&P 500. JPMorgan climbed 1.9 percent to $41.32, for the third-largest increase in the Dow. Wells Fargo & Co. added 1.9 percent to $28.66, Citigroup Inc. advanced 1.5 percent to $42.63 and Bank of America Corp. jumped 1.7 percent to $10.92.

Bank of America, JPMorgan and three other U.S. mortgage servicers are in advanced talks to resolve state and federal claims over faulty foreclosures, according to two people briefed on the matter. Negotiators tentatively set a July 13 target for a settlement, which may exceed $20 billion, the people said.

The New York Post sent bank stocks lower yesterday after reporting that the settlement’s total value might reach $60 billion, citing unidentified people close to the discussions. The Post corrected its report today, saying the amount might reach $25 billion.

Seagate Technology Plc rose 2 percent to $16.64. The world’s largest maker of computer disk drives was raised to “overweight” from “underweight” at JPMorgan.

Affymetrix Inc. tumbled 18 percent to $6.59. The producer of genomic-analysis technology forecast second-quarter sales of as little as $64 million, compared with the average analyst estimate of $74.7 million.

Have a wonderful evening everyone.

Be magnificent!

No one can understand the sound of a drum,

without understanding both the drum and the drummer.

No one can understand the sound of a conch shell,

without understanding the shell and the one who blows it.

No one can understand the sound of a lute,

without understanding both the lute and the one who plays it.

As there can be no water without the sea, no touch without the skin,

no smell without the nose, no taste without the tongue, no sound without the ear,

no thought without the mind, no work without hands, and no walking without feet,

so there can be nothing without the soul.

-Brihadaranyaka Upanishad

As ever,

Carolann

All human wisdom is summed up

in two words – wait and hope.

  -Alexandre Dumas, 1802-1870