October 12th, 2011 Newsletter
Tangents:
Birthday: Luciano Pavarotti, born October 12th, 1935.
Milestone: October 12th, 1999 ~ world population reaches 6 billion. We’ve now surpassed 7 billion!
I want to share with you a wonderful read which I recently came across and thoroughly enjoyed. It is entitled La Seduction (Times Books, Henry Holt & Co. New York, 2011) and it is written by Elaine Sciolino who is a Paris correspondent and former Paris bureau chief for The New York Times. She previously served as the newspaper’s chief diplomatic correspondent and UN bureau chief. Impressively, in 2010, she was decorated a chevalier of the Legion of Honor. She still lives in Paris with her husband. Being an unabashed Francophile, I found her book to be an insightful consideration on the allure of the French way of life. The first chapter opens with a quote by Edith Wharton from French Ways and Their Meaning, “Le plaisir…is something so much more definite and more evocative than what we mean when we speak of pleasure….To the French it is part of the general fearless and joyful contact with life.”
She writes in the first chapter about the ritual of the baisemain, a kiss of the hand:
“The first time my hand was kissed à la française was in the Napoléon III salon of the Élysée Palace. The one doing the kissing was the president of France.
In the fall of 2002, Jacques Chirac was seven years into his twelve-year presidency. The Bush administration was moving toward war with Iraq, and the relationship between France and the United States was worse than it had been in decades…”
The epilogue is the unfolding of a wonderful dinner party and the perceptions of the French guests assembled on La Seduction.
Photos of the day
October 12, 2011
Novice monks at the Dechen Phrodrang Buddhist monastery look down from a hilltop in Bhutan’s capital, Thimphu. Adrees Latif/Reuters.
A full moon shines at dusk above the Swayambhu Nath stupa, a world heritage site in Katmandu, Nepal. Laxmi Prasad Ngakhusi/AP.
Market Commentary:
Canada
By Matt Walcoff
Oct. 12 (Bloomberg) — Canadian stocks rose for a second day, led by energy and financial shares, after European Commission President Jose Barroso’s call for a coordinated response to the continent’s debt crisis spurred optimism about the global economy.
Suncor Energy Inc., the nation’s largest oil and gas producer, gained 2.6 percent after the commission released a so- called road map to address Greek debt, European lenders and the economy. Manulife Financial Corp., North America’s fourth- largest insurer, increased 4 percent. First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, jumped 6.2 percent as the U.S. dollar dropped against six major counterparts.
The Standard & Poor’s/TSX Composite Index rose 154.41 points, or 1.3 percent, to a three-week high of 12,029.96. The S&P/TSX rebounded 7.6 percent in five days after closing at a 14-month low on Oct. 4 as optimism European officials will aid the continent’s banks led to gains in the euro and a weaker U.S. dollar.
“The global mindset had been very negative, very focused on worst-case scenarios,” David Baskin, president of Baskin Financial Services Inc., said in a telephone interview from Toronto. The firm oversees C$400 million ($393 million). “That doesn’t seem to be happening, so there’s a sigh of relief.”
Crude oil futures surged 13 percent and copper rallied 6 percent from Oct. 4 to yesterday, boosting energy and raw- materials stocks. Companies in those industries make up 47 percent of Canadian stocks by market value, according to Bloomberg data.
The euro advanced 1.1 percent against the U.S. dollar today, extending its climb since Oct. 3 to 4.7 percent.
Fifty-nine of 66 S&P/TSX energy companies rose. Suncor increased 2.6 percent to C$29.61. Crescent Point Energy Corp. rallied 4.9 percent to C$41.91 as oil and gas producers with operations in western Canada climbed a day after China Petrochemical Corp. agreed to buy Daylight Energy Ltd. for C$2.2 billion. Athabasca Oil Sands Corp., an oil-sands developer that began trading in April 2010, soared 8.15 percent to C$12.60 after advancing a record 8.17 percent yesterday.
Trican Well Service Ltd., the country’s biggest oilfield- services company, gained 8.8 percent, the most since September 2009, to C$18.56. The shares rallied for a second day after New Orleans-based Superior Energy Services Inc. agreed to buy Houston-based Complete Production Services Inc. for about $2.6 billion in cash and stock.
All S&P/TSX banks and insurers advanced. Manulife climbed 4 percent to C$12.85. Sun Life Financial Inc., Canada’s third- biggest insurance company, climbed 3.7 percent to C$26.45. Royal Bank of Canada, the country’s largest lender by assets, gained 1.8 percent to C$48.83.
Copper futures increased 3.1 percent on the Comex in New York as Asian inventories shrank. First Quantum Minerals surged 6.2 percent to C$17.21. Teck Resources Ltd., the country’s biggest base-metals and coal producer, rose 2.1 percent to C$36.03. Quadra FNX Mining Ltd., which operates in the U.S., Canada and Chile, climbed 5 percent to C$11.01.
Extorre Gold Mines Ltd., which explores in Argentina, gained for a second day after reporting high-grade drilling results, advancing 13 percent to C$8.89. The shares jumped 9 percent yesterday.
BlackBerry maker Research In Motion Ltd. retreated 3.5 percent to C$24.27 after service outages spread to North America and South America. Disruptions continued in Europe, the Middle East and Africa for a third day.
The S&P/TSX has increased at least 150 points four of the past five days. That has happened only once before, when the index climbed at least 150 points five times in a six-day period in December 2008 and January 2009.
US
By Rita Nazareth
Oct. 12 (Bloomberg) — U.S. stocks rose, briefly erasing the Dow Jones Industrial Average’s 2011 loss, as European leaders provided a road map to tame the debt crisis and the Federal Reserve said it discussed further asset purchases.
Financial and industrial shares rose the most among 10 groups in the Standard & Poor’s 500 Index. JPMorgan Chase & Co. and Bank of America Corp. jumped at least 2.7 percent, following a rally in European lenders. General Electric Co. and 3M Co. added more than 1.6 percent to pace gains among companies most- reliant on economic growth. PepsiCo Inc., the largest snack-food maker, increased 2.9 percent as profit beat analysts’ estimates.
The S&P 500 advanced 1 percent to 1,207.25 at 4 p.m. New York time, rallying 4.5 percent in three days. The index rose as much as 2.1 percent earlier before paring gains in the final hour of trading. The Dow climbed 102.55 points, or 0.9 percent, to 11,518.85. The 30-stock gauge is down 0.5 percent for 2011.
“The market doesn’t want to turn back lower,” Liam Dalton, chief executive officer of Axiom Capital Management Inc., in New York, which oversees $1.8 billion, said in a telephone interview. “The process in Europe is likely to be resolved. There are a lot of things that can go right or wrong. Still, we’re building off of what looks like an oversold low.”
The Dow has gained 8.1 percent since reaching this year’s closing low on Oct. 3 amid optimism European leaders will tame the region’s debt crisis and after American economic data improved. Before that, the gauge had slumped as much as 17 percent from this year’s high on April 29 amid concern that Europe’s crisis would slow down the economic recovery.
The S&P 500 had the biggest rally over seven days since March 2009, climbing 9.8 percent. The rebound has yet to bring the S&P 500 out of a trading range it’s been stuck in for more than two months. The benchmark index for U.S. stocks has fluctuated between 1,074.77 and 1,230.71 since Aug. 5 as investors remained cautious toward riskier assets amid speculation Greece will default on its debt.
“It feels like Charlie Brown and Lucy every time she put a football in front of him,” James Dunigan, who helps oversee $109 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. Cartoon character Charlie Brown is a perpetual loser in football and other pursuits. “Maybe the worst case scenario is off the table in Europe. Still, the question is — whatever they do, will it be enough? I’m not sure I’m ready to declare victory yet.”
Global stocks rose today as European Commission President Jose Barroso called for a reinforcement of crisis-hit banks, the payout of a sixth loan to Greece and a faster start for a permanent rescue fund to master Europe’s debt woes. Barroso urged a “coordinated approach” to deliver a “significantly higher capital ratio of highest quality capital” for banks, while offering government funds only as a last resort.
Some Federal Reserve officials last month wanted to keep further asset purchases as an option to boost the economy as policy makers saw “considerable uncertainty” that U.S. growth will pick up, the Fed said today in minutes of the Sept. 20-21 session. The debate culminated in the Federal Open Market Committee’s decision to replace $400 billion of Treasuries in the central bank’s portfolio with longer-term debt to reduce borrowing costs.
“We’re believers that we’re probably going to avoid a recession,” Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles & Co. in Boston, which manages $150 billion, said in a telephone interview. “If people come to realize that economic growth isn’t as poor as sentiment or as stock prices have indicated, we probably could create some type of bottom.”
The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 2 percent. The Dow Jones Transportation Average rose 1.3 percent. The KBW Bank Index gained 3.3 percent.
Bank of America added 3.3 percent to $6.58. JPMorgan gained 2.8 percent to $33.20. GE increased 1.6 percent to $16.40. 3M rallied 2.5 percent to $78.36.
PepsiCo jumped 2.9 percent to $62.70 after saying third- quarter profit rose 4.1 percent as sales of Frito-Lay products increased. Chief Executive Officer Indra Nooyi created a council in September to better coordinate sales of snacks and beverages after the company reduced its full-year profit forecast.
“The reason we’re bullish and why we’re having a different view of the market is because we’ve had a lot more faith in the ability of U.S. corporations and the U.S. economy to still navigate through a U.S. expansion, despite what looks like very, very scary headlines,” Thomas Lee, the chief U.S. equity strategist at JPMorgan, said in an interview on Bloomberg Television “In the Loop” with Betty Liu.
Liz Claiborne Inc. surged 34 percent, the most since 1987, to $6.84 after agreeing to sell its namesake and Monet brands to J.C. Penney Co. and its Kensie line to Bluestar Alliance as the company works to reduce debt. The transactions and the completion of the sale of Dana Buchman brand to Kohl’s Corp. are worth a total of $328 million in cash.
Alcoa Inc. fell 2.4 percent to $10.05. The first company in the Dow to report earnings this quarter posted profit that trailed estimates, saying European customers “dramatically” cut orders on economic uncertainty. Alcoa is grappling with rising production costs while the price of aluminum on the London Metal Exchange has fallen in the past two months.
Earnings per share for the S&P 500, excluding financial companies, rose 14 percent in the third quarter, according to analysts’ estimates compiled by Bloomberg. Still, it’s the smallest gain since the end of 2009, the data showed.
UBS AG raised its 2011 earnings forecast for companies in the S&P 500, citing stronger-than-forecast U.S. economic data.
Thomas Doerflinger, a New York-based strategist, raised his profit estimate for the benchmark index to $96.64 a share from $95, saying earnings in the second half of the year will reflect higher economic growth expectations after U.S. manufacturing, auto sales, construction and payrolls data beat forecasts.
Have a wonderful evening everyone.
Be magnificent!
Give with faith, and never without faith.
Give with dignity. Give with humility. Give with joy.
And give with the understanding of the effects of your gift.
Taittiriya Upanishad
As ever,
Carolann
Few things are harder to put up with than
the annoyance of a good example.
-Mark Twain, 1835-1910