June 27, 2011 Newsletter
Dear Friends,
Tangents: Birthday: Helen Keller, June 27, 1880
Words of Wisdom from Helen Keller:
One can never consent to creep when one feels the impulse to soar.
The world is full of suffering, but it is also full of people overcoming it.
Many persons have a wrong idea of what constitutes true happiness. It is not attained through self-gratification but through fidelity to a worthy purpose.
We could never learn to be brave and patient, if there were only joy in the world.
When one door of happiness closes, another opens; but often we look so long at the closed door that we do not see the one which has been opened for us.
The best and most beautiful things in the world cannot be seen or even touched. They must be felt within the heart.
Photos of the day
June 27, 2011
Monica Ocampo of Mexico scores a goal against England during their Women’s World Cup Group B soccer match in Wolfsburg, Germany. Ina Fassbender/Reuters
Members of the Vienna State Opera Ballet (Wiener Staatsopernballett) perform on stage during a dress rehearsal of Nureyev Gala at the State Opera in Vienna, Austria. The Ballet will premiere on June 28, 2011. Lisi Niesner/Reuters
Market Commentary:
Canada
By Inyoung Hwang and Victoria Stilwell
June 27 (Bloomberg) — Canadian stocks swung between gains and losses after three days of declines, as bank shares gained after global regulators issued new capital rules and energy producers fell.
Toronto-Dominion Bank and Bank of Nova Scotia jumped at least 0.3 percent as financial companies advanced. Teck Resources Ltd. declined 0.9 percent as price of copper fell on concern Greece’s debt crisis will curb demand for industrial metals. Suncor Energy Inc. dropped 0.8 percent as oil sank after the International Energy Agency said it’s prepared to release additional crude from stockpiles.
The Standard & Poor’s/TSX Composite Index lost 7.58 points, or 0.1 percent, to 12,901.31 at 11:41 a.m. in Toronto after rising as much as 0.2 percent.
“This week is going to be a fairly volatile week — our eyes continue to be on the European issues that are going on with Greece,” said Youssef Zohny, a money manager at Van Arbor Asset Management Ltd. in Vancouver, which oversees about C$50 million ($51 million). The new capital rules “are seen more positive for Canadian-U.S. banks, so that’s giving a little bit of strength to the Canadian financial sector.”
The S&P/TSX broke a three-week losing streak last week as investors speculated Greece will be able to enact austerity measures and avoid default. Greek lawmakers are starting a three-day debate to approve an austerity package needed for the release of the next phase of an international bailout.
An index of financial stocks in the S&P/TSX rose 0.2 percent. Banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement Saturday. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.
Toronto-Dominion Bank, the country’s second-largest lender by assets, gained 0.3 percent to C$78.95. Bank of Nova Scotia climbed 0.5 percent to C$57.36.
“Now we have clarity on the amount of capital needed for those financial institutions,” said Bob Decker, a money manager at Aurion Capital Management in Toronto, which oversees C$5.5 billion ($5.6 billion). “Just to know what the number is has created some confidence. There’s basically a wait-and-see attitude to find what the solution is going to be on these Grecian debts.”
Potash Corp of Saskatchewan Inc. increased 1.9 percent to C$52.88 as Horst Hueniken at Stifel Nicolaus & Co. said fertilizer stocks may continue to gain. Potash, the largest fertilizer producer by market value, has advanced 2.7 percent this year.
Investment in agriculture must rise by $90 billion a year to meet the world’s growing food needs, according to a study sponsored by businesses including Monsanto Co., DuPont Co., Archer Daniels Midland Co. and Deere & Co.
The “investment gap” requires more private-sector involvement in agricultural and rural development, according to a report issued today by the Global Harvest Initiative, a collaboration between companies and nonprofits such as the World Wildlife Fund.
Teck, Canada’s largest base-metals and coal producer, lost 0.9 percent to C$45.54.
Energy stocks slumped 0.6 percent, the second-biggest decline in the S&P/TSX. Suncor lost 0.8 percent to C$36.70. Talisman Energy Inc. fell 1.3 percent to C$18.32. The IEA said June 23 its member states including the U.S. and Germany would release oil stockpiles for the third time in the agency’s history. The agency will act again if needed, Executive Director Nobuo Tanaka said June 25.
Yellow Media Inc. declined 18 percent, the most in the S&P/TSX. The directory publisher was cut to “underperform” from “neutral” at Credit Suisse Group AG, which cited a potential dividend cut and an accelerating decline in print business.
US
By Rita Nazareth and Cecile Vannucci
June 27 (Bloomberg) — U.S. stocks advanced, breaking a three-day losing streak for the Standard & Poor’s 500 Index, as regulators issued capital rules to safeguard the global financial system and technology companies rallied.
Bank of America Corp., U.S. Bancorp, Huntington Bancshares Inc. rose at least 2.7 percent as lenders climbed. Microsoft Corp. jumped 3.7 percent, helping to lead a gauge of technology shares in the S&P 500 to the biggest gain within 10 groups.
Amazon.com Inc. added 4.5 percent after Morgan Stanley added the world’s largest online retailer to its “Best Ideas” list.
The S&P 500 gained 0.9 percent to 1,280.10 at 4 p.m. in New York. The benchmark index for American equities had fallen 2.1 percent over the last three days. The Dow Jones Industrial Average rose 108.98 points, or 0.9 percent, to 12,043.56 today.
More than 6 billion shares changed hands on U.S. exchanges at 4:32 p.m., about 4.8 percent more than a week ago.
The requirements for banks “are less onerous than had been feared,” said Scott Tapley, who helps oversee $2.5 billion at 1st Source Investment Advisors Inc. in South Bend, Indiana.
“Sooner they’ll be able to return capital to shareholders through dividends and buybacks.”
The S&P 500 had retreated 7 percent from this year’s high at the end of April through June 24 amid concern about Europe’s debt crisis. Financial institutions in the measure slumped 9.9 percent, the second-biggest decline among 10 groups.
Stocks rose today as global regulators said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, the Basel Committee on Banking Supervision said in a statement on June 25. As many as 30 banks may face some level of surcharges, according to a person familiar with the discussions.
“The banks are going to have a greater chance of success reaching those capital thresholds,” said Keith Wirtz, Cincinnati-based chief investment officer for Fifth Third, which oversees $17.4 billion. “They’re going to allow the banks to earn their way into a better balance sheet condition.”
Equity index futures pared gains before the market opened after consumer spending unexpectedly stagnated as employment prospects dimmed and rising inflation caused Americans to cut back, a Commerce Department report showed in Washington today.
Purchases rose 0.3 percent in May, the same as in the prior month. Economists had forecast a gain of 0.1 percent, according to the median of 63 estimates compiled by Bloomberg.
“I don’t think these little squiggles on the domestic economy are going to make that much difference,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which oversees more than $9 billion. “The focus will continue to be on two things: sovereign debt and Greece. Until this is resolved, I don’t think anybody can feel comfortable anywhere, including the United States.”
Greek lawmakers will vote on a five-year austerity plan this week that must pass before the European Union and the International Monetary Fund will agree to provide further aid.
Failure to pass the plan may lead to the euro area’s first sovereign default as Greece needs to cover 6.6 billion euros ($9.4 billion) of maturing bonds in August.
The first session of the three-day debate began in Athens today. The lawmakers will probably vote on June 29. They also need to pass an implementation law, which provides the details of how the five-year plan will be applied, before June 30.
The KBW Bank Index gained 1.4 percent as 20 of its 24 stocks advanced. U.S. Bancorp added 2.7 percent to $24.57.
Huntington Bancshares rallied 3.6 percent to $6.32.
Bank of America rose 3.1 percent to $10.85. The biggest U.S. lender was “massively undervalued” as the stock traded for less than the cash on its balance sheet is worth, said Richard Bove, an analyst with Rochdale Securities LLC.
“Under the bleakest of scenarios Bank of America’s book value will rise in the next three years,” Bove, who is based in Lutz, Florida, wrote today in a note to clients. “At some point the market will adjust to the company’s real values.”
Technology shares in the S&P 500 rose 1.4 percent, the biggest gain within 10 groups.
Microsoft climbed 3.7 percent to $25.20 before a presentation tomorrow by Chief Executive Officer Steve Ballmer, who is expected to introduce Microsoft’s next-generation cloud service for its Office software. Apple Inc. rose 1.7 percent to $332.04 after Morgan Stanley said the company’s order reductions will ease and production of iPhones and iPads will begin “ramping aggressively” from August through year-end.
Spending on information technology by companies and governments in the U.S. will grow 5.6 percent in 2011, according to a survey by International Data Corp., about double the estimated increase for gross domestic product. Of the executives surveyed by the research firm, 31 percent said spending on security initiatives was a top initiative this year, while 19 percent chose business analytics.
Amazon gained 4.5 percent to $201.25. Morgan Stanley raised its share-price estimate for the company to $245, citing potential for operating margin expansion.
Stanley Black & Decker Inc. added 0.3 percent to $69.50 after agreeing to buy Niscayah AB for 7.6 billion kronor ($1.2 billion), outbidding rival Securitas AB to secure expansion in the market for electronic security systems. Investors will receive 18 kronor a share in cash under the terms of the offer, New Britain, Connecticut-based Stanley said. The price is 47 percent higher than the Niscayah’s closing price prior to the $910 million bid from Securitas.
Have a wonderful evening everyone.
Be magnificent!
Meditation is one of the greatest arts in life, perhaps the greatest,
and one cannot possibly learn it from anybody else,
that is the beauty of it.
It has no technique and therefore no authority.
When you learn about yourself, watch yourself, watch the way you walk,
how you eat, what you say, the gossip, the hate, the jealousy –
if you are aware of all that in yourself, without any choice,
that is part of meditation.
-Krishnamurti, 1895-1986
As ever,
Carolann
The nearest way to glory…
is to strive to be what you
wish to be thought to be
-Socrates, c. 470-399 BC