June 21st, 2011 Newsletter

Dear Friends, 

The summer solstice shouldn’t come as a surprise. It arrives at pretty much the same time every year. But some of the little-known facts behind and surrounding the solstice are fascinating. Summer in the Northern Hemisphere will officially arrive on Tuesday June 21, at 1:16 p.m. EDT (17:16 Universal Time ): the June solstice.  At the same time, winter officially begins for the Southern Hemisphere.

At that moment, the sun will reach the point where it is farthest north of the celestial equator. To be more precise, when the summer solstice occurs, the sun will appear to be shining directly overhead at a point on the Tropic of Cancer (latitude 23.5 degrees north) in the Great Bahama Bank, roughly halfway between Andros Island and central Cuba.

 “A perfect summer day is when the sun is shining, the breeze is blowing, the birds are singing, and the lawn mower is broken.”

— James Dent

 
Photos of the Day:

Farmers push a boat carrying their pigs in a flooded area of Lanxi City, Zhejiang Province June 21 2011. REUTERS/Lang Lang

A man celebrates the summer solstice at the market for the summer solstice at the Kokinko megalithic observatory June 21, 2011. REUTERS/ Ognen Teofilovski

Market Commentary:

 Canada

(Reuters) – Toronto’s main stock index ended sharply higher on Tuesday, posting its biggest one-day gain in three months on the back of stronger commodity prices that rose on hopes for a deal to resolve Greece’s debt crisis

Consensus grew that Prime Minister George Papandreou would survive a confidence vote, the first of three tests the Greek government must survive to avert the euro zone’s first sovereign default. The vote is due around 5 p.m. EDT (2100 GMT). The optimism whetted investor appetite for riskier assets and drove global stocks and commodity prices higher.

“The market is discounting the fact that the Greek prime minister will survive tonight’s confidence vote, so a relief rally on the back of that,” said Fergal Smith, managing market strategist at Action Economics. He warned however that market players were talking about Tuesday’s bounce being a low-volume, rally and whether it could be sustained.

Materials and energy issues rose 3.1 percent and 1.8 percent respectively. The two groups together make up about half of the TSX index.

Potash Corp was the most influential gainer on the index, building on the previous session’s advance as it rose 3.5 percent to C$52.38. Canadian Natural Resources was close behind, climbing 3.5 percent to C$39.15, while Teck Resources surged 5.2 percent to C$45.47. Toronto-Dominion Bank gave the strongest showing among banks, rising 1.6 percent to C$80.17. Smith noted that progress on the debt ceiling talks in the United States was also positive for the market, as well as signs that U.S. vehicle assembly has been recovering faster than anticipated, which supported the view that growth will rebound in the second half of the year.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 205.62 points, or 1.6 percent, at 13,063.32. It was the biggest one-day gain since March 21. Nine of the TSX’s 10 main groups were higher. Health care stocks were down 0.9 percent.

Smith said significant near-term resistance would be found around the 200-day moving average, which sits just below 13,300. “Temporarily, it looks like we’ve hit a bottom here, because bad news is being somewhat forgiven and good news is being treated pretty heartily,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier. Though he also cautioned that the confidence may not last long.

“Something else could hit us over the head and we’re back down. But, having said that, it’s better than if we keep going down, down, down.”

Among the decliners, EnCana was the biggest weight on the index, falling 1.4 percent to C$29.06. The company called off a proposed C$5.4 billion deal to sell half its holdings in a prolific shale gas region in British Columbia to PetroChina, saying it would seek new partners.

Sino-Forest was the second heaviest laggard, sinking 27 percent to C$1.99 after its biggest shareholder, billionaire hedge fund manager John Paulson, dumped his entire 14 percent stake in the company late Monday.

Research In Motion, which has reportedly begun handing out layoff notices, jumped more than 9 percent to C$27.74 after falling more than 26 percent following Friday’s disappointing results and outlook. RIM’s recent sharp selloff has fueled speculation that the company is looking like a more attractive takeover target.

Looking ahead to Wednesday, the market will shift its focus to the second day of the Federal Open Market Committee’s meeting, with a news conference by Federal Reserve Chairman Ben Bernanke. The U.S. central bank is expected to cut its growth forecast for 2011, but Bernanke will likely continue to argue the slowdown is temporary and offer no hints at a third round of quantitative easing.

(Reporting by Claire Sibonney)

US

(Reuters) – Stocks posted gains for the fourth day on Tuesday on growing hopes that Greece will avoid a debt default, adding momentum to the market’s recent rebound.

The Nasdaq had its biggest percentage gain since October, while the S&P 500 marked its best day in two months in what investors believe could be continued short-term buying from deeply oversold levels. The Nasdaq reclaimed positive territory for the year and led the market’s advance, boosted by a jump in semiconductor stocks. A semiconductor index .SOX shot up 2.5 percent, its best gain since April.

Consensus grew that Prime Minister George Papandreou’s cabinet would survive a confidence vote after the U.S. market close. The confidence vote is seen as the first step in moving closer to a resolution of Greece’s debt crisis.

It could pave the way for more aid and also remove a source of constant worry about global banks’ exposure to the euro zone’s debt problems. The PHLX KBW Bank Index gained 1.1 percent after touching a 52-week high earlier in the day.

“If you’re an investor, you don’t want this Greek debt crisis to touch off another round of financial contagion around the world,” said Michael Sheldon, chief market strategist of RDM Financial, in Westport, Connecticut.

The Dow Jones industrial average rose 109.63 points, or 0.91 percent, to 12,190.01 at the close. The Standard & Poor’s 500 Index gained 17.16 points, or 1.34 percent, to 1,295.52. The Nasdaq Composite Index climbed 57.60 points, or 2.19 percent, to 2,687.26.

The Nasdaq ended Tuesday’s session above its 50- and 200-day moving averages, for the first time since May 31.

The Dow and the S&P 500 finished last week with gains after six weeks of declines. The Nasdaq, however, ended the week in the minus column.The S&P 500 is down 5 percent since its May 2 high.

During the session, the Nasdaq also got a lift from U.S.-traded shares of Research In Motion Ltd, which gained 10.3 percent to $28.55 after falling about 7 percent on Monday.

The vote in Greece’s parliament was due around 5 p.m. EDT (2100 GMT). Officials said the Greek government had until July 3 to approve new steps to get the next installment of 110 billion euros in aid from the European Union and the International Monetary Fund.

Analysts cautioned, however, there could be steep downside potential if the vote doesn’t go as expected. A default by Greece “would be another domino falling from the financial crisis,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

Among stock gainers, Best Buy Co Inc rose 2.7 percent to $32.38 after the electronics retailer raised its dividend and approved a stock-repurchase plan. On the downside, Walgreen Co fell 4.2 percent to $43.28 after it failed to renew a deal with pharmacy benefits manager Express Scripts Inc. Express Scripts shares rose 0.4 percent to $54.99.

The Federal Open Market Committee began a two-day meeting, with an announcement expected Wednesday afternoon, followed by Federal Reserve Chairman Ben Bernanke’s new conference. The Fed is expected to cut its growth forecast for 2011, but Bernanke probably will continue to argue the slowdown is temporary.

Advancing stocks outnumbered declining ones on the NYSE by nearly 6 to 1. On the Nasdaq, advancers beat decliners by about 4 to 1.

(Reporting by Caroline Valetkevitch; Additional reporting by Ashley Lau; Editing by Jan Paschal)

 Be magnificent!

“The most primitive work of art also can express the strongest experience, and it speaks to us, if only we let it.” –Ludwig Von Mises

 As Always,

Kyle for Carolann