March 23, 2012 Newsletter

Dear Friends,

Tangents:

March 23^rd, 1922, Mahatma Gandhi, at his trial on a charge of sedition:

Non-violence is the first article of my faith.  It is the last article of my faith.  But I had to make my choice.  I had either to submit to a system which I considered has done an irreparable harm to my country or incur the risk of the mad fury of my people bursting forth when they understood the truth from my lips.  I know that my people have sometimes gone mad.  I am deeply sorry for it;  and I am therefore, here, to submit not to a light penalty but to the highest penalty.  I do not ask for mercy.  I do not plead any extenuating act.  I am here, therefore, to invite and submit to the highest penalty that can be inflicted upon me for what in law is a deliberate crime and what appears to me to be the highest duty of a citizen.  –from The Book of Days.

photos of the day

March 23, 2012

A bird sits on the head of a deer shortly after dawn in south west London.

Toby Melville/Reuters

People relax in the sun near the fountains at Trocadero square near the Eiffel Tower as unusually warm temperatures hit Paris.

Charles Platiau/Reuters

The secret of health for both mind and body is not mourn for the past, not to worry about the future,

not to anticipate the future, but to live the present moment wisely and earnestly.     ~ Buddha

Market Closures for March 22, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

March 23 (Bloomberg) — Canadian stocks rose, paring a weekly decline, as precious metal producers rallied after a decline in the U.S dollar spurred demand for gold and silver as alternative investments.

Barrick Gold Corp., the biggest producer of the metal, advanced 1.6 percent. Silver Wheaton Corp., the country’s third- biggest precious metals company by market value, rose 5.3 percent after reporting fourth quarter profit that beat analysts’ average estimate. West Fraser Timber Co., Canada’s largest forestry company, fell 2.2 percent after a U.S. report showed purchases of new homes unexpectedly fell.

The Standard & Poor’s/TSX Composite Index advanced 103.85 points, or 0.8 percent, to 12,465.66 in Toronto, reducing its weekly decline to 0.3 percent.

“The dollar is the flipside of commodity prices,” Irwin Michael, a money manager at ABC Funds in Toronto, said in a telephone interview. Michael’s firm oversees C$1 billion ($1 billion). “It doesn’t take very much to cause a move. People are very nervous.”

The index had its fourth-straight weekly decline, the longest slump since November 2011, as manufacturing contracted in China and Europe and gold fell to a 10-week low before rebounding today. Energy and raw-materials companies make up 45 percent of Canadian stocks by market value, according to Bloomberg data.

Materials companies increased today, driven by precious metals stocks, as gold advanced the most in four weeks on speculation that investors will buy more bullion as an alternative to the slumping dollar. Gold had dropped 4 percent this month on concern over an economic slowdown in China before rebounding.

Gold futures for April delivery climbed 1.2 percent on the Comex in New York while silver futures for May delivery increased 3 percent, the most since Feb. 28.

Barrick Gold advanced 1.6 percent to C$43.80. Silver Wheaton rose 5.5 percent to C$33.74 after reporting fourth- quarter earnings excluding some items of 41 cents a share, beating the average analyst estimate in a Bloomberg survey by 1 cent.

Construction and building materials companies declined after purchases of new homes in the U.S. unexpectedly fell in February for a second month, a sign the recovery in the housing market may be uneven. West Fraser Timber, which earned 47 percent of its revenue in the U.S. last year, dropped 2.2 percent to C$48.70.

Energy stocks in the S&P/TSX increased as oil surged almost

$3 a barrel after Reuters reported Iranian oil exports will drop by 300,000 barrels a day this month because of tighter sanctions.

Imperial Oil Ltd., Canada’s second-largest oil company by revenue, rose 2.6 percent to C$45.44. Suncor Energy Inc., Canada’s largest oil and gas producer, increased 1 percent to C$32.80.

US

By Inyoung Hwang

March 23 (Bloomberg) — U.S. stocks rose, trimming the biggest weekly drop of the year for the Standard & Poor’s 500 Index, as gains in commodity and energy companies amid rising oil prices offset an unexpected decline in new-home purchases.

Material and energy shares each climbed 1 percent, the most among 10 groups in the S&P 500, as crude rose on a report that sanctions will reduce Iranian exports. Chevron Corp. gained 1 percent. Morgan Stanley added 3.8 percent, pacing an advance among financial companies, after it was raised to sector perform by Royal Bank of Canada. Bats Global Markets Inc. withdrew its initial public offering after errors on its own system derailed trading in the stock and forced a halt in Apple Inc.

The S&P 500 rose 0.3 percent to 1,397.11 at 4 p.m. in New York, paring the benchmark index’s decline for the week to 0.5 percent. The Dow Jones Industrial Average gained 34.59 points, or 0.3 percent, to 13,080.73 today.

“Energy’s leading and it’s a reflection of the news out of Iran and concerns about a potential shortage of oil,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, which oversees $85 billion, said in a telephone interview. “The market’s had a big run the first quarter and we could see some sort of consolidation phase, but I don’t see the market vulnerable to any significant correction. Despite the big run in stocks, investor sentiment has been contained.”

U.S. stocks retreated yesterday as manufacturing contracted in China and Europe and FedEx Corp. tumbled amid a disappointing forecast. The S&P 500 is still up 2.3 percent for March, heading for its longest monthly rally since September 2009 as economic data topped forecasts and the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to lenders.

At the same time, American equity trading has struggled.

Shares changing hands on all U.S. exchanges slumped 30 percent to 5.9 billion today from last week. The average volume in the past three months has been 6.61 billion, compared with the one- year average of 7.53 billion.

Raw-material and energy companies had the biggest gains out of 10 groups in the S&P 500 today as commodity prices rose. Oil surged almost $3 a barrel after Reuters reported Iranian oil exports will drop by 300,000 barrels a day because of tighter sanctions.

Alcoa jumped 1 percent to $10.11, while Caterpillar added

1.3 percent to $107.83. Chevron climbed 1 percent to $106.36.

Cabot Oil & Gas Corp. jumped 3.2 percent to $32.52, while Consol Energy Inc. jumped 2.5 percent to $33.76.

Financial shares advanced 0.9 percent as a group. Morgan Stanley added 3.8 percent to $20.33. The New York-based firm was raised to sector perform from underperform at Royal Bank of Canada. Discover Financial Services climbed 4.1 percent to

$33.83 after the payments network company was raised to conviction buy at Goldman Sachs Group Inc.

The S&P Supercomposite Homebuilding Index fell 1.2 percent.

Stocks declined earlier today after figures from the Commerce Department showed that new-home sales fell 1.6 percent to a

313,000 annual pace, the slowest since October, from a 318,000 rate in January that was weaker than previously reported. The median estimate of 78 economists surveyed by Bloomberg News called for 325,000.

KB Home, the Los Angeles-based homebuilder that targets first-time buyers, sank 8.5 percent to $10.29. Revenue in the first quarter was $254.6 million, falling short of the average analyst estimate of $328.6 million.

Micron Technology Inc. fell 3.6 percent to $8.40 for the biggest drop in the S&P 500 after reporting a third consecutive quarterly loss as sluggish demand for personal computers dragged down chip prices.

“There’s a little bit of nervousness this week,” Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, said in a telephone interview. The firm oversees $40 billion. “This was the week where the market had a little bit of second guessing on how strong is Europe, how strong is China, and that raises the question, ‘How confident are we that the economy is going to continue to grow at the pace we’ve seen in recent months?’”

Bats Global Markets withdrew its initial public offering after the six-year-old equity exchange priced the deal yesterday.

Pulling the IPO capped a day of missteps for the electronic exchange, beginning just as the shares were making their debut.

Data received by Bloomberg around 11 a.m. in New York showed the stock, the first ever listed on its Lenexa, Kansas-based market, quoted at pennies after being priced yesterday at $16.

Around the same time, a transaction in Apple was executed on Bats so far away from the market price that it triggered a halt. A single trade for 100 shares executed on a Bats venue briefly sent Apple down to $542.80, according to data compiled by Bloomberg.

Bats sent a notice about 10 minutes before the Apple trade saying it was investigating “system issues” affecting companies with ticker symbols ranging between A and BF. Apple’s symbol is AAPL; Bats’s ticker is BATS. Apple finished regular trading down

0.6 percent at $596.05.

Have a wonderful weekend everyone.

Be magnificent!

There is no weapon more powerful in achieving the truth than acceptance of oneself.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

Life is occupied in both perpetuating itself and

in surpassing itself.  If all it does is maintain itself,

then living is only not dying.

-Simone de Beauvoir, 1908-1986

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

Senior Vice-President &

Senior Investment Advisor