March 2, 2012 Newsletter

Dear Friends,

Tangents:

Birthday: Theodore Geisel, Dr. Seuss was born March 2^nd, 1904

Dr. Seuss’s eco-cautionary fable ‘The Lorax’: movie review

‘The Lorax’ is a reasonably entertaining version of Dr. Seuss’s eco-cautionary fable

By Peter Rainer, Film critic / March 2, 2012

‘The Lorax’ has a lively comic gallery of characters, including Danny DeVito as the titular tree-protector and Betty White as Grammy Norma.

Universal Pictures/HONS/AP

The Lorax – The 3-D animated feature “The Lorax” is a reasonably entertaining rendition of the 1971 Dr. Seuss eco-cautionary fable that now seems all too prescient. It’s about 13-year-old Ted (voiced by Zac Efron), who seeks out the legendary Truffula Tree far beyond the confines of his treeless, prefabricated town of Thneedville, where fresh air is sold in bottles.

Dr. Seuss: 10 favorite quotes on his birthday

Along the way a lively comic gallery emerges, including Ted’s Grammy Norma (Betty White), the orange sprite Lorax (Danny De Vito), and Thneedville’s reigning meanie Aloysius O’Hare (Rob Riggle). Director Chris Renaud and his team have fun with these dithery, frenetic characters. The film is less special when it slows down and takes a breath of fresh air. Grade: B (Rated PG for brief mild language.)

photos of the day

March 2, 2012

A man and a Buddhist monk ride a motor bike near U Bein bridge, the longest teak bridge in the world, in Mandalay. The bridge was built 200 years ago across the Taungthaman Lake and measures 0.75 miles in length.

Soe Zeya Tun/Reuters

A woman rows on Lake Leman on a warm winter day in St-Sulpice near Lausanne.

Denis Balibouse/Reuters

Market Closes for March 2, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Matt Walcoff

March 2 (Bloomberg) — Canadian stocks fell, completing a weekly retreat, as mining stocks dropped with the euro after Germany reported a decline in retail sales and oil futures slipped as Saudi Arabia denied speculation of pipeline sabotage.

Yamana Gold Inc., Canada’s third-largest gold producer by market value, lost 2.6 percent as the metal posted its biggest weekly slump since December. Canadian Natural Resources Ltd., the country’s second-biggest energy producer by value, slipped

2.9 percent as crude oil finished its first weekly drop in four weeks. Royal Bank of Canada, the country’s largest lender by assets, decreased 0.7 percent after an analyst at Toronto- Dominion Bank cut his rating on the shares.

The S&P/TSX Composite Index fell 79.64 points, or 0.6 percent, to 12,643.82, extending its weekly loss to 0.6 percent.

“The markets are showing a little bit of overbought conditions,” Philip Petursson, managing director of the Portfolio Advisory Group at Manulife Financial Corp.’s asset- management unit, said in a telephone interview from Toronto. The unit oversees about $217 billion. “The economic data that helped drive the markets higher has been fully digested in the marketplace.”

The index gained 6.4 percent this year through yesterday as gold, copper and oil futures each advanced at least 9.9 percent.

Energy and raw-materials make up 48 percent of Canadian stocks by market value, according to Bloomberg data.

The U.S. dollar completed its biggest weekly climb against the euro since Jan. 6 after Germany reported that retail sales declined 1.6 percent in January. None of the 22 economists in a Bloomberg survey had forecast a drop that large.

Gold, silver and copper retreated on the Comex in New York.

Yamana lost 2.6 percent to C$16.82. Teck Resources Ltd., Canada’s largest base-metals and coal producer, decreased 2.6 percent to C$38.52. New Gold Inc., which mines in Mexico, Australia and the U.S., slumped 5.2 percent to C$10.76 after the average fourth-quarter earnings estimate of analysts in a Bloomberg survey.

Oil dropped the most this year after Saudi Arabia’s oil ministry said there has been no sabotage of its oil facilities in the Qatif area. Iran’s Press TV said yesterday that an explosion had hit oil pipelines in eastern Saudi Arabia. Oil continued its retreat after The Atlantic magazine quoted U.S.

President Barack Obama as saying a pre-emptive strike on Iran might allow the country to “portray itself as a victim.”

Canadian Natural lost 2.9 percent to C$36.33. Suncor Energy Inc., the country’s biggest energy company, declined 1.1 percent to C$35.45. Calfrac Well Services Ltd. slid 7.6 percent to

C$32.48 after surging 26 percent in the previous three days.

Progress Energy Resources Corp., which produces natural gas and oil in Canada, rallied 6.7 percent to C$11.50 after Roger Serin, an analyst at TD, raised his rating on the shares to buy from hold. The company reported fourth-quarter cash flow per share 20 percent higher than Serin’s estimate.

Trinidad Drilling Ltd., an oil and gas services company, surged 5.4 percent to C$8 after Michael Mazar, an analyst at Bank of Montreal, said in a note to clients that the company has a “moderate-to-high” chance of raising its dividend when it reports quarterly financial results next week.

Royal Bank decreased 0.7 percent to C$56.40 to end its eight-day streak of gains, the longest in two years. Jason Bilodeau, an analyst at TD, reduced his rating on the stock to hold from buy. “Much of the opportunity for near-term outsized returns has been captured” after the shares soared 31 percent from Nov. 25 to yesterday, Bilodeau wrote in a note to clients.

SNC-Lavalin Group Inc., Canada’s biggest construction and engineering company, climbed 2.9 percent to C$40 after Gareth Tingling, an analyst at Macquarie Group Ltd., raised his rating on the shares to outperform from neutral. An outperform rating means the shares will return at least 5 percentage points more than their benchmark over the next year. SNC-Lavalin’s 21 percent plunge after disclosing an internal accounting probe was overdone, Tingling wrote in a note to clients.

US

By Rita Nazareth

March 2 (Bloomberg) — U.S. stocks retreated, trimming a weekly advance for the Standard & Poor’s 500 Index, amid concern that a rally that drove the benchmark gauge to the highest level since 2008 has outpaced global economic growth prospects.

Energy, industrial and financial shares had the biggest declines among 10 groups in the S&P 500. Anadarko Petroleum Corp., Cummins Inc. and Morgan Stanley slid more than 1.6 percent to pace losses among the largest companies. Big Lots Inc. fell 4 percent as sales missed estimates. Yelp Inc., the site that lets users review everything from diners to dentists, gained as much as 73 percent in its first day of trading.

The S&P 500 fell 0.3 percent to 1,369.63 at 4 p.m. New York time. It rose 0.3 percent since Feb. 24 for a third weekly gain.

The Dow Jones Industrial Average slid 2.73 points, or less than

0.1 percent, to 12,977.57. The Russell 2000 Index lost 1.6 percent to 802.42, the lowest since Jan. 31. The gauge dropped 3 percent this week. About 6 billion shares changed hands on U.S.

exchanges, or 9.9 percent below the three-month average.

“Some people may think that the market is a bit ahead of itself after the rally in stocks,” said John Carey, a Boston- based money manager at Pioneer Investments. His firm oversees about $220 billion. “There’s concern about a potential slowdown as a result of Europe’s debt crisis. People seem to have been more relaxed about the situation in Europe, but when you look closely, you see that the underlying issues remain unresolved.”

Stocks followed a euro slump as Spain raised its budget- deficit target for 2012 and German retail sales unexpectedly declined. Treasuries gained for the first time in four days, while the S&P GSCI gauge of 24 commodities fell 1.2 percent.

Today’s drop came as the S&P 500 capped its best start to a year since 1991 on better-than-estimated economic data and expectations Europe would tame its crisis. It trades at 14.1 times reported earnings, which is the highest since August while still below the average since 1954 of 16.4 times, according to data compiled by Bloomberg. Earlier this week, the Dow closed above 13,000 for the first time since 2008 and the Nasdaq Composite Index topped 3,000 for the first time since 2000.

“There’s a whole too far, too fast thing,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in a telephone interview. His firm oversees more than

$12 billion. “We don’t think that means it’s going to have a huge pullback, but a consolidation would be a relief.”

Seven out of 10 groups in the S&P 500 declined. Anadarko Petroleum fell 3.8 percent to $82.55, pacing losses in energy shares, as oil tumbled after yesterday topping $110 a barrel.

Cummins decreased 1.8 percent to $119.46. Morgan Stanley retreated 1.7 percent to $18.87.

Big Lots slid 4 percent to $42.71 after reporting fourth- quarter sales of $1.63 billion. On average, analysts surveyed by Bloomberg estimated $1.66 billion.

Travelers Cos. lost 0.7 percent to $58.01. The only insurer in the Dow Jones Industrial Average was downgraded to “equal weight” at Morgan Stanley. That means the stock’s total return is expected to be in line with the average for its industry peers over the next 12 to 18 months. The previous rating was “overweight.”

Overstock.com Inc. slumped 11 percent to $6.11. The online discount retailer reported fourth-quarter sales of $314.1 million, trailing the average estimate of $377.5 million from two analysts in a Bloomberg survey.

Yelp climbed 64 percent to $24.58. The San Francisco-based company raised $107.3 million in the IPO, pricing the shares at

$15 each, according to a statement yesterday. The company earlier offered them for $12 to $14.

Facebook Inc. hired Deutsche Bank AG, Credit Suisse Group AG and Citigroup Inc. to work on its $5 billion initial public offering, bringing the total of banks on the deal to nine, said a person with direct knowledge of the situation.

Facebook’s new and existing banks will grant the company an additional credit line of more than $2.5 billion, said the same person, who declined to be identified as the decision isn’t public. The moves will be disclosed in a new regulatory filing in a couple of weeks, said the person.

Sara Lee Corp. added 7.1 percent to $21.83. Its international coffee company, which includes the Douwe Egberts, Senseo and Moccona brands, filed for a spinoff under the name DE International Holdings NV.

Wynn Resorts Ltd. jumped 4.3 percent to $127.27, as the stock resumed trading following an hour-and-a-half halt. The Las Vegas-based operator of its namesake and Encore casinos retracted a regulatory filing that suggested the company had completed a land concession contract on its proposed resort and casino in the Cotai area of Macau.

Shutterfly Inc. surged 17 percent to $31.36 after announcing an initial offer to buy Eastman Kodak Co.’s online- picture business for $23.8 million. Kodak, the photography pioneer that filed for bankruptcy protection in January, agreed to the so-called stalking horse bid in a court-supervised auction process, according to a statement yesterday.

Price swings in the S&P 500 have become more muted this year, making investors complacent about the outlook for stocks, according to Canadian brokerage firm Brockhouse & Cooper Inc.

There have been no daily swings of 2 percent or more in either direction this year, compared with more than 25 occurrences in the second half of 2011, when Europe’s sovereign- debt crisis triggered a drop in equities. The lower chart panel tracks the Chicago Board Options Exchange Volatility Index, or VIX, known as the market’s “fear gauge.”

“Volatility tends to come with negative surprises, and it’s been quiet since December,” said Pierre Lapointe, a strategist at the Montreal-based brokerage. “But quiet periods usually don’t last. There is a risk of complacency. This is a low volatility environment and investors shouldn’t think this is the new norm.”

Have a wonderful weekend everyone.

Be magnificent!

Everyone is but a manifestation of the Impersonal, the basis of all being,

and misery consists in thinking of ourselves as different from this Infinite, Impersonal Being;

and liberation consists in knowing our unity with this wonderful Impersonality.

-Swami Vivekananda, 1863-1902

As ever,

Carolann

Confidence…thrives on honesty, on honor,

on the sacredness of obligations, on faithful

protection and unselfish performance.

Without them it cannot live.

-Franklin D. Roosevelt, 1882-1945

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

Senior Vice-President &

Senior Investment Advisor