March 21st, 2011 Newsletter

Dear Friends,

Spring has officially arrived!

SPRING -Gerard Manley Hopkins

NOTHING is so beautiful as spring—

When weeds, in wheels, shoot long and lovely and lush;

Thrush’s eggs look little low heavens, and thrush

Through the echoing timber does so rinse and wring

The ear, it strikes like lightnings to hear him sing;

The glassy peartree leaves and blooms, they brush

The descending blue; that blue is all in a rush

ith richness; the racing lambs too have fair their fling…

March 21, 2011

Photo’s of the Day

The ancient Acropolis hill is lit by the sun on a heavily overcast day in central Athens. Petros Giannakouris/AP

An elephant dances with volunteers wearing costumes to raise money for victims of the recent Japan earthquake and tsunami in Khao San Road, a backpacker area in Bangkok. The donation drive was part of Thailand’s efforts to aid earthquake-hit Japan. Chaiwat Subprasom/Reuters

The 67-story-high ‘The Masterpiece,’ one of Hong Kong’s most luxurious high-rise residential buildings, is seen during foggy conditions under the influence of a warm maritime airstream at sunset in Hong Kong. Tyrone Siu/Reuters

Market Commentary:

Canada

By Matt Walcoff and Jennifer A. Johnson

March 21 (Bloomberg) — Canadian stocks rose for a third day as energy shares rallied after air strikes in Libya threatened to prolong a supply disruption and Japan reported progress in solving its nuclear crisis.

Suncor Energy Inc., Canada’s largest oil and gas producer, increased 3.6 percent as crude climbed above $102 a barrel.

Cameco Corp., the world’s second-biggest uranium producer, surged 7.4 percent. Royal Bank of Canada, the country’s largest bank, increased 1.5 percent as financial companies advanced.

The Standard & Poor’s/TSX Composite Index rose 224.07 points, or 1.6 percent, to close at 14,013.70 in Toronto.

“The media has panicked everyone over the situation in Japan and shook the tree real hard and unnecessarily so,” said Gerry Brockelsby, who helps oversee C$200 million ($205 million) as a money manager at Marquest Asset Management Inc. in Toronto.

“We’re seeing the reality is not as scary as the media has been portraying it.”

The S&P/TSX has gained 3.6 percent since March 16 for the biggest three-day advance in more than 10 months as oil has rebounded after dropping following the earthquake and tsunami in Japan. Energy companies make up 28 percent of Canadian stocks by market value, the most among 10 industries.

Crude futures increased as much as 2.3 percent today after allied countries began enforcing a no-fly zone over Libya to stop Muammar Qaddafi’s troops from overwhelming rebel forces.

Suncor rallied 3.6 percent to C$44.63. Canadian Natural Resources Ltd., the country’s second-largest energy company by market value, climbed 1.9 percent to C$48.71. Cenovus Energy Inc., the No. 5 Canadian energy company by revenue, increased 3.7 percent to C$37.53.

Uranium producers surged after Japanese Prime Minister Naoto Kan and Tokyo Electric Power Co. said progress has been made toward restoring power to the Fukushima Dai-Ichi nuclear plant.

Cameco advanced 7.4 percent to C$31.09 after dropping 20 percent last week. Uranium One Inc., the mining company controlled by Moscow-based ARMZ Uranium Holding, jumped 13 percent to C$4.48. Denison Mines Corp. soared 9.3 percent to C$2.81.

Mantra Resources Ltd. surged 24 percent to C$6.60 after ARMZ reduced its bid for the Perth, Australia-based company  to A$6.87 a share from A$8 a share. Mantra, which is developing uranium projects in Africa, sank 31 percent last week as ARMZ said it wanted to renegotiate the deal reached in December.

Canada’s five largest banks and all S&P/TSX insurers gained. The events in Japan and the Arab world have made investors less wary of interest-rate increases, Camilla Sutton, a currency strategist at Bank of Nova Scotia, said in a note to clients.

Royal Bank rose 1.5 percent to C$60.04. Scotiabank, Canada’s third-biggest bank, advanced 1.2 percent to C$58.60.

Manulife Financial Corp., North America’s fourth-largest insurer, increased 2.3 percent to C$17.25.

Precious-metals producers climbed as gold and silver rallied as investors sought a haven from the potential spread of unrest in the Middle East and North Africa.

Silver reseller Silver Wheaton Corp. rose 5.3 percent to C$41.31 as the metal gained 2.7 percent. First Majestic Silver Corp. advanced 7.8 percent to C$18.11, extending its four-day rally to 21 percent. Semafo Inc., which mines gold in Africa, increased 9.5 percent to C$9.67.

Teck Resources Ltd., Canada’s largest base-metals and coal producer, fell 0.9 percent to C$52.87 after workers at its Elkview coal mine in British Columbia rejected a new contract. About 750 employees have been on strike since Jan. 31.

Copper producer Taseko Mines Ltd. dropped 3.4 percent to C$5.68 after Alex Terentiew, an analyst at Credit Suisse Group AG, cut his rating on the shares to “underperform” from “neutral.” In a note to clients, Terentiew said Quadra FNX Mining Ltd. is “more compelling” than Taseko due to forecasts of faster production growth and lower costs.

Kinross Gold Corp. added 3.7 percent to C$15.04. The company’s shares have fallen so low compared to other gold mining companies that the Toronto, Ontario-based company may be a takeover target, the Globe and Mail reported. Kinross has fallen 21 percent this year. Barrick Gold Corp., the world’s largest gold mining company, dropped 7.2 percent during the same period.

US

By Rita Nazareth and Lu Wang

March 21 (Bloomberg) — U.S. stocks rallied, sending the Standard & Poor’s 500 Index higher for a third day, as concern eased that Japan will suffer a nuclear meltdown and after AT&T Inc. agreed to buy T-Mobile USA for $39 billion.

AT&T added 1.2 percent after agreeing to buy Deutsche Telekom AG’s U.S. wireless unit. OptionsXpress Holdings Inc. soared 17 percent after Charles Schwab Corp. agreed to buy the company for $1 billion in stock. American International Group Inc. and Hartford Financial Services Group Inc. rallied at least 3.9 percent as Japan made progress in restoring power to two reactors. Energy shares advanced as crude oil gained.

The S&P 500 rose 1.5 percent to 1,298.38 at 4 p.m. and has rallied 3.3 percent in three days, the longest winning streak in about a month. The Dow Jones Industrial Average added 178.01 points, or 1.5 percent, to 12,036.53. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, slumped 16 percent, the biggest decline since May, to 20.61.

“We ought to be overweight equities,” said Hayes Miller, the Boston-based head of asset allocation in North America at Baring Asset Management Inc., which oversees $51.6 billion. “I don’t think that anything that’s happening in Japan or Libya changes the attractiveness of stocks. On top of that, companies have cash and they need to deploy it somehow if they can find accretive deals. The AT&T buyout looks very interesting.

Investors are also looking at dividends and buybacks.”

U.S. stocks fell last week, sending the S&P 500 down 1.9 percent, amid concern that Japan’s nuclear crisis and violence in Libya and Bahrain may curb the economic recovery. The gauge rose on March 18 as the Federal Reserve cleared the way for lenders to boost dividends, Libya announced a cease-fire and central banks worked to support Japan’s economy.

Global stocks rose today after Japanese Prime Minister Naoto Kan said progress is being made in restoring power to two reactors at the Fukushima Dai-Ichi plant, which was damaged by the March 11 temblor and ensuing tsunami. In Libya, allied officials said air and missile strikes have effectively grounded Muammar Qaddafi’s air force.

Billionaire investor Warren Buffett said Japan’s record earthquake is a buying opportunity and he won’t sell his shares in the country. Buffett canceled a trip this week to Japan to visit a factory owned by Iscar Metalworking Cos.’s Tungaloy Corp. in Fukushima prefecture, the site of the worst nuclear disaster in 25 years. Buffett’s Berkshire Hathaway Inc. owns 80 percent of Iscar, a maker of cutting tools.

“If I owned Japanese stocks, I would certainly not be selling them because of the events of the past 10 days or so,” said Buffett, speaking to reporters in the South Korean city of Daegu, where he arrived yesterday to attend a ceremony for a new factory being built by TaeguTec Ltd. “Something out of the blue like this, an extraordinary event, really creates a buying opportunity.”

AT&T gained 1.2 percent to $28.26. The phone company agreed to buy T-Mobile USA from Deutsche Telekom for about $39 billion in cash and stock to create America’s largest mobile- phone company, trumping Sprint Nextel Corp.’s effort to acquire the business. The deal would allow AT&T, now the second-largest U.S. wireless operator, to add about 34 million customers and surpass Verizon Wireless. AT&T was raised to “buy” from “hold” at Citigroup.

Sprint tumbled 14 percent to $4.36.

OptionsXpress soared 17 percent to $17.90. Charles Schwab agreed to buy the Chicago-based company for $1 billion in stock, adding the 10-year-old retail options broker to its equity and mutual fund offerings. The largest independent brokerage by client asset will exchange 1.02 shares for each share of OptionsXpress. Charles Schwab added 0.5 percent to $17.65.

AIG rose 6 percent to $37.03 even after the insurer bailed out by U.S. taxpayers said first-quarter catastrophes including the earthquake in Japan will cost the company about $1 billion this quarter.

Hartford added 3.9 percent to $26.49.

An index of energy shares rallied 2.9 percent, the most in the S&P 500 within 10 industries. Oil rose as allied air strikes in Libya threatened to prolong a supply disruption in Africa’s third-biggest producer and on concern that escalating turmoil may curtail Middle East shipments.

Exxon Mobil Corp. gained 2.5 percent to $82.84.

ConocoPhillips climbed 2.9 percent to $77.55.

CBS Corp. gained 5.5 percent to $24.51. Ratings from the NCAA basketball tournament have been up 11 percent from the same period last year, David Joyce, analyst at Miller Tabak & Co., said in a note today. There has been strong demand for advertising and the tournament should be “the second-largest sports ad revenue event after the Super Bowl,” he wrote.

Tiffany & Co. climbed 5.1 percent to $60.22. The world’s second-largest luxury jewelry retailer reported a 29 percent gain in fourth-quarter profit as sales exceeded analyst estimates during the holiday season.

Citigroup Inc. lost 1.5 percent to $4.43 after reporting a 1-for-10 reverse split of its common stock. Citigroup also reported that it intends to reinstate a quarterly dividend of 1 cent per common share in the second quarter of 2011, following the effective date of the reverse stock split.

U.S. stocks maintained gains even after the National Association of Realtors said that sales of U.S. previously owned homes dropped more than forecast in February and the median purchase price declined to the lowest since April 2002.

Purchases decreased 9.6 percent to a 4.88 million annual rate, less than the 5.13 million median forecast of economists surveyed by Bloomberg News.

“Those things are all part of uncertainties we deal with on a day-by-day basis,” said Joseph Keating, chief investment officer at CenterState Wealth Management, who manages $1 billion in Birmingham, Alabama. “When you do the calculus, it comes down to saying, ‘the U.S. economy looks like it’s on solid footing and earnings will continue to grow. This is a buying opportunity.”

Have a wonderful evening everyone.  Be magnificent!

It is only when we give complete attention to a problem, and solve it immediately – never carrying it over to the next day, the next minute – that there is solitude.To have inward solitude and space is very important because it implies freedom to be, to go, to function, to fly.

~Krishnamurti, 1895-1986

As ever,

Carolann

How wonderful it is that nobody need wait a single moment before starting to improve the world.     -Anne Frank, 1929-1945