May 13th, 2011 Newsletter
Dear Friends, Friday the thirteenth….Thirteen was regarded as an unlucky number even among the Romans, who held it as a sign of death and destruction. The origin of the idea that sitting down thirteen at a table is unlucky is said to be that, at a banquet in Valhalla, Loki once intruded, making 13 guests and Balder was slain. The superstition was confirmed in Christian countries by the Last Supper of Christ and the 12 apostles. In the Middle Ages, witch covens were believed always to have 13 members. The 13th of any month is widely regarded as an inauspicious day on which to undertake any new enterprise, and it is traditionally thought to be unlucky for a ship to begin a voyage on the 13th.
In ancient Rome, Friday was called dies Veneris, day of Venus, hence the French Vendredi. The northern nations adopted the same nomenclature and the nearest equivalent to Venus was Frigg or Freyja, hence Friday (old English frigedoeg). Friday was regarded by the Norsemen as the luckiest day of the week when weddings took place, but among Christians it has been regarded as the unluckiest, because it was the day of the crucifixion. Friday is the Sabbath for Muslims, who hold that Adam was created on a Friday and that it was on Friday that Adam and Eve ate the forbidden fruit and on Friday that they died. It is also held unlucky among Buddhists and Brahmans.
In England, it is not unlucky to be born on this day since “Friday’s child is loving and giving.”
-from Brewer’s Dictionary of Phrase & Fable
photos of the day
May 13, 2011
The experimental aircraft Solar Impulse takes off for its first international flight to Brussels from the airbase in Payerne, Switzerland. The solar-powered plane has the wingspan of a Boeing 777.
Laurent Gillieron/Keystone/AP
A two-month-old leopard cub peers out of a cage at Suvarnabhumi airport in Bangkok. Thai police arrested a UAE citizen just after midnight as he was preparing to fly first class from Bangkok to Dubai with various rare and endangered animals in his suitcases including four leopards, a Malayan sun bear, a white-cheeked gibbon, a black-tufted marmoset, an Asiatic black bear and two macaque monkeys.
Damir Sagolj/Reuters
Market Commentary:
Canada
By Matt Walcoff
May 13 (Bloomberg) — Canadian stocks fell for a fourth day, completing a weekly decline, as energy shares retreated after the U.S. dollar strengthened.
Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, decreased 1.5 percent as the U.S. dollar rose against 15 of 16 other major currencies.
Manulife Financial Corp., North America’s fourth-largest insurer, lost 1.3 percent as a gauge of financial stocks retreated for a third day. Potash Corp. of Saskatchewan Inc., the world’s biggest fertilizer producer, advanced 1.5 percent as corn futures advanced.
The Standard & Poor’s/TSX Composite Index slipped 12.26 points, or 0.1 percent, to 13,377.16, extending its weekly drop to 1.4 percent.
“Speculative money is being run out of the commodity markets,” said Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, which oversees C$250 million
($259 million).
The S&P/TSX retreated for a third week for the first time since January 2010. The index decreased 4.2 percent from April 21 through yesterday as oil, copper and silver each plunged at least 10 percent. Energy and raw-materials companies make up 47 percent of Canadian stocks by market value, according to Bloomberg data.
The U.S. dollar gained against the euro today after Reuters quoted European Central Bank President Jean-Claude Trichet as saying inflation was at a “peak.” The news service later corrected its story to say Trichet referred to a “hump” in inflation as he had in previous interviews.
“The catalyst was the remarks that Trichet made this afternoon our time that suggested that growth was not going to be maybe what people had anticipated,” said Laura Wallace, senior manager for a team at Scotia Asset Management that oversees C$11 billion for private clients.
Canadian Natural fell for a fifth day, sliding 1.5 percent to C$39.41. Canadian Oil Sands Ltd., the largest owner of the Syncrude project, dropped 1.8 percent to C$30.98.
Petrominerales Ltd., which produces oil and gas in Colombia, slumped 3.9 percent to C$28.89 after Rafi Khouri, an analyst at Raymond James Financial Inc., cut his rating on the shares to “underperform” from “market perform.” In a note to clients, Khouri cited a decline in production.
Shares of the Bogota- and Calgary-based company have retreated nine straight days.
Canadian financial shares declined along with U.S. banks amid concern about Europe’s debt crisis.
Manulife, the owner of John Hancock Financial Service Inc., lost 1.3 percent to C$17.25. Sun Life Financial Inc., Canada’s third-largest insurer, decreased 0.8 percent to C$30.18.
Brookfield Asset Management Inc., Canada’s biggest real-estate company, slipped 0.7 percent to C$31.28.
Fertilizer producers climbed as corn futures rose on signs demand for U.S. exports is increasing. Potash Corp. gained 1.5 percent to C$49.92. Agrium Inc., Canada’s second-biggest fertilizer producer, advanced 2.2 percent from a seven-month low to C$78.
Neo Material Technologies Inc., which makes rare-earth and zirconium products, sank 9.4 percent, the most since December 2008, to C$8.69 after saying it will sell $200 million in debt that can be converted into stock.
Sino-Forest Corp., the largest Canada-based forestry company by market value, tumbled 6.3 percent, the most since June, to C$19.20. In a phone interview, Sino-Forest Chief Financial Officer Dave Horsley said the shares were dropping on speculation the company was late filing first-quarter financial results, which he said was not the case.
US
By Inyoung Hwang
May 13 (Bloomberg) — U.S. stocks fell, erasing a weekly gain, as CA Inc. led technology shares lower after earnings missed estimates and banks slid amid concern about Europe’s debt crisis and closer government scrutiny.
CA, the second-largest maker of software for mainframe computers, tumbled 8.6 percent for its biggest drop since 2009.
Nvidia Corp. dropped 11 percent after the company’s rating was cut at Needham & Co., which cited slower growth. Janus Capital Group Inc. lost 4.5 percent to lead financial companies to the biggest decline among 24 industries.
The Standard & Poor’s 500 Index fell 0.8 percent to 1,337.77 at 4 p.m. in New York, leaving it down 0.2 percent on the week. The Dow Jones Industrial Average dropped 100.17 points, or 0.8 percent, to 12,595.75. Stocks extended losses as the Dollar Index rallied, gaining 0.7 percent.
“You’re seeing liquidity drain off — people have had a good year so far and rather than get tagged for staying too long at the party, they’re exiting,” said Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors in Cincinnati, which manages $14.8 billion. “With all the liquidity out there needing a home, it’s a tug of war back and forth between inflation fear and a need to keep that money invested.”
The S&P 500 fell 1.9 percent this month as gauges of energy and raw-material producers slumped with metal and oil prices.
The gauge has still climbed 6.4 percent this year as government stimulus measures and corporate earnings boosted confidence in the economic recovery.
U.S. data today showed the cost of living climbed in April by 0.4 percent, led by gains in food and fuel prices. That follows a 0.5 percent gain in March.
Consumer confidence climbed more than forecast in May, with the Thomson Reuters/University of Michigan preliminary consumer sentiment index rising to 72.4, a three-month high, from a final reading of 69.8 in April. The gauge was projected to rise to 70, according to the median forecast of 62 economists surveyed by Bloomberg News. Reports in Europe earlier showed Germany and France powered economic growth in the euro area in the first quarter as booming exports fueled domestic spending in the bloc’s core, offsetting sovereign debt concerns.
The view that “the West is in trouble” is wrong when nations including Germany, Sweden and Canada are performing strongly, said Jim O’Neill, chairman of Goldman Sachs Asset Management, in a Bloomberg Television broadcast in Hong Kong.
Investors should “stop worrying so much.”
Germany is waiting for the conclusion of a European and International Monetary Fund mission to Greece before making any decision on whether further steps may need to be taken to help the first victim of the debt crisis, a German government spokesman said.
Germany, the European Commission and the IMF back an extension of maturities on Greek bonds because of the worsening deficit situation in Greece, Die Welt newspaper reported in an advance copy of an article in tomorrow’s edition, without saying where it got the information.
“People are fearful that bad news will come out of Europe over the weekend,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $550 billion. “There’s general concern about weekend news that’s keeping a lid on the market.”
Technology companies were the two worst-performing stocks in the S&P 500. Nvidia, the maker of three-dimensional graphics processors, sank 11 percent, the biggest slump in benchmark equity index to $18.26. The company had its rating cut to “hold” from “buy” at Needham & Co., which cited slower growth in its core graphics processing business and increased competition in the tablet computer and smartphone markets, among other things.
CA erased 8.6 percent to $22.90 for the second-biggest retreat in the S&P 500. The software company posted fourth- quarter sales and profit that missed the average analyst estimates, Bloomberg data show.
Yahoo! Inc. slumped 3.6 percent to $16.55, the lowest price since April 19. The owner of the largest U.S. Web portal said Alibaba Group Holding Ltd. spun off its Alipay online-payment business to a different company without the knowledge or consent of its board or shareholders.
Financial stocks declined 1.5 percent, the biggest drop out of 10 groups in the S&P 500, as Republicans on the House Financial Services Committee advanced three bills today to reshape the Consumer Financial Protection Bureau.
Janus Capital slumped 4.5 percent to $10.91. JPMorgan Chase & Co. slid 2.1 percent to $43.15.
Republicans are pushing changes to the Dodd-Frank Act, the regulatory overhaul they targeted since taking control of the House in January. Republicans have proposed about a dozen bills to revise the new rules, which they were nearly unanimous in opposing when Dodd-Frank was passed in July.
Goldman Sachs Group Inc. tumbled 3.5 percent yesterday, the most since January, after the bank was cut to “sell” from “neutral” by Richard Bove, an analyst with Rochdale Securities, who cited pressure on the Justice Department to file a criminal lawsuit against Goldman Sachs.
Consumer-staple and health-care companies were the best performing groups in the benchmark equity index today.
“The markets are going to struggle,” said Michael Vogelzang, chief investment officer at Boston Advisors LLC, which manages $1.8 billion. “The rotation internally has been away from risk and toward more stability. You’re starting to see staples and health-care outperformance — groups that have underperformed for a significant period of time.”
JPMorgan’s strategy team, led by Thomas Lee, raised their recommendation for health care to “overweight” from “neutral,” citing improving fundamentals, stable regulatory risk and “attractive” valuations. Aetna Inc. rose 2.4 percent to $43.85, while Cigna Corp. added 1.3 percent to $48.69.
UnitedHealth Group Inc. and WellPoint Inc. were named in the bank’s list of 18 “best ideas.”
Have a wonderful weekend everyone.
Be magnificent!
The human soul travels from the law to love,
from discipline to freedom,
from the moral plane to the spiritual plane.
-Rabindranath Tagore, 1861-1901
As ever,
Carolann
Destiny is carried out,
fate is suffered.
-J. Christopher Herold, 1919-1964
Carolann Steinhoff, B.Sc., CFP, CIM, FCSI
Senior Vice-President &
Senior Investment Advisor