March 16, 2012 Newsletter

Dear Friends,

Tangents: St. Patrick’s Day this weekend –

You’ve got to do your own growing, no matter how tall your grandfather was.  ~ Irish Proverb.

It being St. Patrick’s Day weekend and reminiscing on all the great pleasures the Irish had given the world (e.g. The Book of Kells)
I had an urge to find James Joyce’s Portrait of the Artist as a Young Man in the stacks of books  in my library at home and it was a magical moment.  I have probably not looked at it in decades.  When I opened it, I found that I had written in the perfect handwriting I had back then, my name and the day I acquired it – September 15, 1973.  It would have been my first year at Marianopolis College in Montreal and part of the curriculum for my English Literature class.   Even though I was a science major, literature will always be my deepest love and we were allowed an elective, so naturally literature is what I chose.  I remember the Professor as if it were yesterday – he was the most enigmatic, enlightened, inspirational professor I have ever had (except maybe my biochemistry Professor at University a few years later).  I don’t really remember, but I must have had to do a book report on it because it is scribbled with my handwriting all over the place, for instance:

Page 15: “He turned to the flyleaf of the geography and read what he had written there: himself, his name and where he was.

Stephen Dedalus

Class of Elements

Clongowes Wood College

Sallins

County Kildare

Ireland

Europe

The World

The Universe”

I had written in the margins “attempt to orient himself.”

On another page:

“His mind wearied of its search for the essence of beauty amid the spectral words of Aristotle or Aquinas turned often for its pleasure to the dainty songs of the Elizabethans.  His mind, in the vesture of a doubting monk, stood often in shadow under the windows of that age, to hear the grave and mocking music of the lutenists  or the frank laughter of waist-coasters until a laugh too low, a phrase, tarnished by time, of chambering and false honour stung his monkish pride and drove him on from hid looking-place.”

I had written in the margins: “Real world and Elizabeth, virgin queen.”

Lots more too.

photos of the day

March 16, 2012

People create shadows on a metal wall on a sunny spring day in Berlin.

Thomas Peter/Reuters

A Trabant convertible, a vintage East German car, drives past the Reichstag, the seat of Germany’s lower house of parliament, on a sunny spring day in Berlin.

Thomas Peter/Reuters

Market Closures for March 16, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

March 16 (Bloomberg) — Canadian stocks rose for a second day, paring a weekly decline in the benchmark equity index, as economic data from the U.S. drove commodity shares higher.

Advantage Oil & Gas Ltd., which operates in western Canada, advanced 6.7 percent, the biggest gain among energy producers.

Teck Resources Ltd., Canada’s biggest base-metals and coal producer, gained 3.4 percent. Astral Media Inc., the owner of the Movie Network cable channel, surged 34 percent after BCE Inc. agreed to acquire the company for C$3 billion ($3 billion).

Extorre Gold Mines Ltd. fell 3.9 percent as producers of the precious metal retreated.

The S&P/TSX Composite Index increased 41.14 points, or 0.3 percent, to 12,496.96 in Toronto, limiting its weekly decline to

0.1 percent.

“There’s been positive economic news coming from the U.S., and we’re following in the wake,” Pat McHugh, senior managing director and Canadian equity strategist at Manulife Financial Corp.’s asset-management unit, said in a telephone interview.

The unit oversees about $217 billion. “Oil is up, which certainly helps. Our banks have had good results. And Treasury yields coming up have helped insurance companies have a very nice week.”

The index was down 0.4 percent this week through yesterday, as commodity shares declined after China reported a smaller gain in exports than economists had forecast. Energy and raw- materials companies make up 45 percent of Canadian stocks by market value, according to Bloomberg data.

Canadian resources companies rebounded amid speculation that demand will climb in the U.S., which reported yesterday that jobless claims fell to a four-year low last week. The U.S.

Labor Department reported today that consumer prices climbed less than forecast last month, showing inflation remains controlled. The country is the biggest crude consumer in the world and the second-biggest user of copper.

Advantage Oil & Gas rose 6.7 percent to C$3.80 after releasing a year-end report on its drilling program and reserves. Teck Resources increased 3.4 percent to C$36.75.

Fertilizer companies rose after data from the Fertilizer Institute showed a decline in potash inventories in February.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer by market value, gained 6.6 percent to C$45.40. Agrium Inc., a fertilizer company and farm retailer, increased 3.2 percent to C$85.22.

Financial stocks in the S&P/TSX rose for a seventh straight day, led by insurers, after the Federal Reserve raised its assessment on the economy earlier this week and said that 15 of

19 U.S. banks would be able to maintain adequate levels of capital in a financial crisis.

Industrial Alliance Insurance & Financial Services Inc., a Quebec-based insurer, rose 2.2 percent to C$32.40. Bank of Nova Scotia, Canada’s third-biggest lender, gained 0.9 percent to C$55.86.

Astral Media rose 34 percent to C$48.55 after BCE, Canada’s biggest phone company, said it would buy the company to expand in Quebec’s French-speaking market.

Calgary-based Corus Entertainment Inc., the owner of the YTV cable television network, increased 7.5 percent to C$23.40.

Gold producers declined for the fourth time this week as futures fell after India, the biggest bullion buyer, raised its tax on imports of precious metals for a second time this year.

Goldcorp Inc., the second-largest producer by market value, retreated 1.1 percent to C$43.65. Extorre, which explores for the metal in Argentina, slipped 3.9 percent to C$6.54, the lowest price since Oct. 5.

US

By Rita Nazareth

March 16 (Bloomberg) — The Dow Jones Industrial Average snapped a seven-day gain after an increase in oil and consumer prices sparked inflation concern as the economy improves.

Energy shares had the biggest advance among 10 groups in the Standard & Poor’s 500 Index. Noble Corp. and Chesapeake Energy Corp. increased more than 2.5 percent. The Bloomberg U.S.

Airlines Index slumped 3 percent amid expectations about higher fuel prices. Bank of America Corp. jumped 6.1 percent, surging

23 percent in four days. Apple Inc. ended almost unchanged as the company started selling the new iPad.

The S&P 500 advanced 0.1 percent to 1,404.17 at 4 p.m. New York time, capping a fifth week of gains. The benchmark measure has risen 2.4 percent since March 9, the biggest weekly advance in 2012. The Dow dropped 20.14 points, or 0.2 percent, to 13,232.62, after rallying to the highest level since December 2007. About 8.1 billion shares changed hands on U.S. exchanges today, or 21 percent above the three-month average.

“The bugaboo in the background is oil prices,” said Madelynn Matlock, who helps oversee about $14.6 billion at Huntington Asset Advisors in Cincinnati. “I filled up my car yesterday and it hurts. Things are improving at a slow, but steady pace. If oil prices pop up, it will be different story.”

Equities were little changed as the cost of living rose in February by the most in 10 months, reflecting a jump in gasoline. Confidence among consumers unexpectedly fell in March, a sign rising fuel costs may be starting to weigh on economic prospects. Treasury Secretary Timothy F. Geithner said yesterday rising oil prices show “we still face a dangerous and uncertain world” and there’s no easy way to lower gasoline costs.

The S&P 500 is still on pace for the best first quarter since 1998, after rallying 12 percent, amid better-than- estimated economic and corporate reports. It trades at 14.5 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4 times earnings.

“It’s a bit of acrophobia,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, citing potential investors’ fear after the S&P 500 rose to the highest level since 2008. His firm oversees $209 billion. “The market has just gone up pretty quickly. Meantime, slow and slightly improving has been the way to look at the economy.”

Energy shares gained, while airlines slumped as oil traded above $107 a barrel. Noble surged 4.8 percent to $41.25.

Chesapeake Energy added 2.5 percent to $25.06. Exxon Mobil Corp.

advanced 0.4 percent to $86.44. US Airways Group Inc. lost 5.7 percent to $7.15. United Continental Holdings Inc. declined 2.2 percent to $19.95.

Financial shares in the S&P 500 rose 0.3 percent as a group. The index surged 6.2 percent in four days following dividend increases by banks including JPMorgan Chase & Co. Bank of America jumped 6.1 percent, the most in the Dow, to $9.80.

Wells Fargo & Co. lost 0.5 percent to $33.89.

American International Group Inc. fell 0.2 percent to $28.03, after rising as much as 1.1 percent earlier today. The insurer’s repayment of $1.6 billion to the U.S. Treasury Department pushed the government’s portion of recouped financial-bailout money to 80 percent, said a Treasury official familiar with the matter.

Apple ended almost unchanged at $585.57, after briefly rising above $600 yesterday. The 9.7-inch iPad, unveiled on March 7, is the biggest upgrade yet to Apple’s tablet before Microsoft Corp. introduces new software for competing devices.

Generating demand with the model is important for Apple to fend off competition from devices using Google Inc.’s Android operating system and the $199 Kindle Fire from Amazon.com Inc.

that’s popular among cost-conscious buyers.

The S&P 500, which yesterday rose above 1,400 for the first time in almost four years amid better-than-estimated economic data, may extend its gain to 1,470, according to Credit Suisse Group AG’s Andrew Garthwaite. He lifted his forecast for the index at the end of 2012 from a previous projection of 1,400, citing increasing risks for bonds and momentum in global earnings.

“The prospects for economic growth are pretty good,”

Michelle Gibley, director of international research at San Francisco-based Charles Schwab Corp., said in a telephone interview. Her firm has $1.81 trillion in client assets. “Near term, you could see some volatility in stocks because the run has been so strong. Longer term, the outlook looks good.”

The benchmark measure has “healthy intermediate-term momentum” that helped it recover from a slump at the beginning of the month and may drive it higher, MKM Partners LP’s chief market technician said.

The market may be staging a “breakout” after matching its

2011 highs last week, MKM Partners’ Katie Stockton said, citing the momentum indicator known as Moving Average Convergence/Divergence. A second-straight weekly close above

1,370 today would confirm the trend and open the way to an increase to 1,440, Stockton said in a phone interview yesterday.

“I’m bullish on the market from an intermediate perspective based largely on momentum and this breakout that appears to be under way,” Stockton said. “The fact that the S&P 500 has managed to exceed resistance at the 2011 high tells us that breakout should overrule any negative set-up otherwise.”

Have a wonderful weekend everyone.

Be magnificent!

Live your own life.

That is to say, where you are, as you are, with what you are, and with who you are…

Accept the situation which you find yourself and try, at the same time, to adapt to it.

You cannot escape from it.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

Try to be better than yourself.

-William Faulkner, 1897-1962

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor