June 28th, 2011 Newsletter
Dear Friends,
Tangents: Birthday: Peter Paul Rubens, June 28th, 1577
Peter Paul Rubens, The Elevation of the Cross, oil on canvas, 1610-1611 (Cathedral of Our Lady, Antwerp)
Rubens was an enormously successful artist in the first half of the 1600s. His paintings were sought after by important patrons all over Europe. A shrewd businessman, Rubens was of course, also a devout Catholic. He is also a perfect example of the changed status of the artist: his friends and confidants were scholars, aristocrats, and even the Royal Families of Europe (Rubens was so trustworthy and clever that he served as a diplomat).
Rubens spent several years in Italy early in his career studying Italian Renaissance art, as well as the art of classical antiquity. He combined this with the influence of Caravaggio, the Venetian artists of the Renaissance, the Baroque, and the tradition of his native Flanders (think Campin and Van Eyck). Rubens was so successful that he set up a large studio in his native Antwerp (which you can still visit). There, he churned out large numbers of paintings for his royal and wealthy clients, and charged for the paintings according to how much he had personally painted. He was always responsible for the idea of a painting, but if his assistants executed most of it, the work was less expensive. In his studio Rubens had assistants working for him who specialized in different things, so they could all work on different parts of a single painting. From: SmartHistory.
Photo of the day
June 28, 2011
The father of seven-month-old Nopparat teaches him to ‘wai,’ a traditional Thai greeting with the palms pressed together in a prayer-like fashion, to neighbors as they pass outside their residence in Bangkok’s Khlong Toei district, Thailand. Adres Latif/ Reuters.
Market Commentary:
Canada
By Nikolaj Gammeltoft
June 28 (Bloomberg) — Canadian stocks rose for a second day as energy producers and bank shares gained amid optimism that a deal can be reached to help Greece avoid defaulting on its debt.
Suncor Energy Inc., Canada’s largest oil and gas producer, advanced 1.5 percent as oil futures jumped. Royal Bank of Canada, the country’s biggest bank, and Toronto-Dominion Bank increased at least 0.8 percent as financial stocks rallied. Westport Innovations Inc. soared 11 percent after General Motors Co. agreed to work on projects with the developer of natural-gas engine technologies.
The Standard & Poor’s/TSX Composite Index rose 138.49 points, or 1.1 percent, to 13,104.98 at 4 p.m. in Toronto.
“Everyone’s thinking of Greece and there’s a little bit of optimism today as we wait for the vote tomorrow,” said Irwin Michael, who helps manage C$1 billion ($1 billion) as a money manager at ABC Group of Funds in Toronto. “Greece has to be repaired and put on the right track because you got other problematic countries that are being watched very closely.”
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 in the midst of a debate this week to approve an austerity package needed for the release of the next phase of an international bailout.
Germany’s biggest banks and insurers will meet with the Finance Ministry in Berlin tomorrow as they seek to reach an agreement on their contribution to a Greek aid package, two people with knowledge of the matter said. A preliminary deal may be reached as early as tomorrow, they said. Greek Prime Minister George Papandreou’s 78 billion euro ($111 billion) plan to cut spending and sell assets is set for a vote in parliament tomorrow.
S&P/TSX energy stocks rallied 1.6 percent, the second-most among ten groups in the benchmark index for Canadian equities. Suncor advanced 1.5 percent to C$37.52. Canadian Natural Resources Ltd., the country’s second-biggest energy company by market value, increased 3 percent to C$39.44. Industrial companies rose the most S&P/TSX Composite Index.
Oil rose from a four-month low amid speculation that Greek lawmakers will approve austerity measures to prevent a default on the country’s debt and on forecasts U.S. fuel demand will rise before the Fourth of July holiday. The U.S. Independence Day weekend typically marks the peak consumption period for U.S. motorists.
The S&P/TSX Financials Index, the largest part of the S&P/TSX Composite, gained 0.5 percent. Royal Bank of Canada rose 1.1 percent to C$54.49. Toronto-Dominion Bank, Canada’s second- largest lender by assets, increased 0.8 percent to C$80.26.
Westport Innovations surged 11 percent to C$23.55 after agreeing with GM to develop natural gas controls, emissions and performance strategies. Westport will also open a new technical center in Michigan.
Stocks rose in Canada even after a report that confidence among U.S. consumers dropped to a seven-month low in June as Americans grew concerned about the outlook for jobs and wages.
The Conference Board’s sentiment index decreased to 58.5 from a revised 61.7 in May. Home prices fell in the year ended in April by the most in 17 months, another report showed.
“Everyone is betting on Europe finding a resolution for the Greece,” said Ken Mack, an analyst and trader at Stone Asset Management in Toronto, which oversees about C$850 million.
“The U.S. put out a consumer confidence number that was lower than expected and the market shrugged it off. It’s very day to day, the optimism comes and goes and today it’s up.”
US
By Rita Nazareth and Cecile Vannucci
June 28 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to its highest level in three weeks, amid optimism European nations will take action to prevent a Greek default and after Nike Inc.’s earnings beat estimates.
Nike rallied 10 percent as higher North American sales helped the world’s largest sporting-goods company top profit projections. Caterpillar Inc., Exxon Mobil Corp. and Alcoa Inc. added at least 2.1 percent, pacing gains in companies most-tied to economic growth. Home Depot Inc. climbed 2.4 percent after the largest U.S. home-improvement retailer said that it is targeting about $3.5 billion in share repurchases for 2011.
The S&P 500 advanced 1.3 percent to 1,296.67 at 4 p.m. in New York, rising to the highest closing level since June 3. The Dow Jones Industrial Average increased 145.13 points, or 1.2 percent, to 12,188.69 today. More than 6.1 billion shares changed hands on U.S. exchanges at 5:12 p.m., 14 percent less than the three-month average through yesterday.
“The rally is a continuation of the global growth story,” said Sean Kraus, who oversees about $2.2 billion as chief investment officer at Citizens Business Bank in Pasadena, California. “There’s relief around Greece. As a global company, people looked at Nike to say, ‘hey, how was the global economy really doing on the consumer side?’ Because Nike actually had a very good quarter, that was a surprise to the market.”
Energy, consumer discretionary and raw material companies posted the biggest gains today among 10 industries in the S&P 500, rising at least 1.7 percent. Since the index bottomed on March 16, defensive industries such as health-care, telecommunications and utilities have risen the most as investors sought havens on speculation growth is slowing.
Global stocks rallied today as two people with knowledge of the matter told Bloomberg News that Germany’s biggest banks and insurers will meet with the Finance Ministry in Berlin tomorrow as they seek to reach an agreement on their contribution to a Greek aid package.
German and French lenders are the biggest European holders of Greek debt and their participation in the plan is key to the European Union goal of getting banks to roll over at least 30 billion euros ($43 billion) of bonds. The debt swap is part of a broader aid package European Union leaders have pledged to pass next month to prevent the euro-region’s first default a year after the Greek bailout that failed to stop the debt crisis.
“The Germans and the French are the key players,” said Mike Shea, a managing partner and trader at Direct Access Partners LLC in New York. “The market is looking for some kind of clarity. Nobody expects a permanent solution right now, but if the German banks are on board with the French plan it indicates that we are closer to some kind of resolution.”
Nike jumped 10 percent to $89.90. Chief Executive Officer Mark Parker has boosted sales and reduced marketing costs from a year earlier, when Nike promoted around the World Cup, to fight rising costs for cotton, labor and transportation that have reduced profitability in the apparel industry this year.
“Nike had strong earnings,” said Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management LLC, which oversees $3.8 billion. “We’re coming into earnings season, which is going to be good. What is going to drive the stock market is going to be earnings. U.S. companies are doing very well.”
Alcoa is the first Dow average company to report second- quarter earnings on July 11. Earnings at S&P 500 companies rose 13 percent in the three-month period ending June 30, according to a Bloomberg survey with analysts. Net income will rise 20 percent in 2011, the data showed.
The Morgan Stanley Cyclical Index rose 1.5 percent as 29 of its 30 stocks rallied. The Dow Jones Transportation Average of 20 stocks, a proxy for economic growth, added 1.4 percent. The S&P GSCI Index of 24 commodities advanced 2.2 percent as crude oil rebounded from a four-month low and metals rallied.
Caterpillar, the world’s largest maker of construction equipment, gained 3 percent to $103.84. Exxon Mobil increased 2.2 percent to $79.63. Alcoa advanced 2.4 percent to $15.65.
Home Depot climbed 2.4 percent, the third-biggest gain in the Dow, to $36.06. The home-improvement retailer closed at the highest level since May 31.
Accenture Plc rose 3.2 percent to $59.65. The world’s second-largest technology-consulting firm will replace Marshall & Ilsley Corp. in the S&P 500 after the close of trading on July 5, S&P said. The change is being made because Bank of Montreal is acquiring Marshall & Ilsley in a deal expected to be completed around that date.
LinkedIn Corp. soared 12 percent to $85.56. JPMorgan Chase & Co. predicted that the shares would climb to $85 in the next 18 months, giving them an “overweight” rating, while Bank of America Corp. has a “buy” recommendation and an estimate of $92. UBS AG, which also assigned a “buy” rating, expects the stock to increase to $90. Morgan Stanley projected $88, with an “overweight” rating.
Pfizer Inc. rose 1.9 percent to $20.55. The world’s biggest drugmaker said the U.S. Food and Drug Administration accepted the company’s filing for review of axitinib for patients with advanced kidney cancer.
The S&P 500 may extend its gains from a three-month low to as much as 4.1 percent after a trend measure sent out its first buy signal since April, according to Piper Jaffray Cos.
The Moving Average Convergence/Divergence line, calculated by subtracting the S&P 500’s average level during the past 26 days from the average over the past 12 days, crossed last week above the “signal line” that plots the 9-day average difference between the two. That suggests the gain is likely to continue and help drive the S&P 500 to its 50-day moving average, or 1,317, said Craig W. Johnson, a technical market strategist with Piper Jaffray in Minneapolis.
“People know the summer doldrums probably won’t carry through into the fall,” he said in an interview. “They’re trying to use pullbacks toward the 200-day average as the opportunity buying stocks.”
Have a wonderful evening everyone.
Be magnificent!
Man cannot be broken down into emotions, intellect, or action.
Man is a whole.
When these three elements of intellect, feelings, and action are in harmony, they make up man.
-Swami Prajnanpad, 1891-1974
As ever,
Carolann
Fortunately Nature, kind and patient as she is,
has never put the dire question as to the meaning
of their lives into the mouths of most people.
And where nobody asks, nobody needs to answer.
-Carl Gustav Jung, 1875-1961