May 26th 2011, Newsletter

Dear Friends,

Considered one of the most beautiful poems ever written, worth remembering… 

SONNET 130 

My mistress’ eyes are nothing like the sun;
Coral is far more red than her lips’ red;
If snow be white, why then her breasts are dun;
If hairs be wires, black wires grow on her head.
I have seen roses damask’d, red and white,
But no such roses see I in her cheeks;
And in some perfumes is there more delight
Than in the breath that from my mistress reeks.
I love to hear her speak, yet well I know
That music hath a far more pleasing sound;
I grant I never saw a goddess go;
My mistress, when she walks, treads on the ground:
And yet, by heaven, I think my love as rare
As any she belied with false compare.

 -William Shakespeare, 1609

 photos of the day

May 26, 2011 

Fire boats spray water near the Statue of Liberty to kick off Fleet Week in New York. Fleet Week ends on Memorial Day with a military flyover honoring American military personnel who lost their lives in service.

Seth Wenig/AP

 A monkey drinks water from a tap on a hot summer afternoon in Jammu, India.

Channi Anand/AP 

Market Commentary: 

Canada

By Matt Walcoff

May 26 (Bloomberg) — Canadian stocks rose for a second day as oil producers gained as investors took advantage of historically low share prices relative to earnings in the industry.

Niko Resources Ltd., which produces energy in South Asia, rallied 5.9 percent on speculation fuel prices may increase in India. CIBC, Canada’s fifth-largest lender by assets, dropped 3.9 percent after its second-quarter profit trailed the average analyst estimate by 2.7 percent, excluding certain items. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, advanced 1.8 percent after the International Grains Council cut its 2011-12 wheat-production forecast.

The Standard & Poor’s/TSX Composite Index climbed 24.43 points, or 0.2 percent, to 13,775.90. “Oil stocks have corrected quite a bit over the last month, month and a half,” said Todd Johnson, a portfolio manager at BCV Asset Management in Winnipeg, Manitoba, which oversees C$300 million ($307 million). “It might be value players moving in and taking positions again.”

The S&P/TSX dropped 3.6 percent from April 5 to yesterday as an index of integrated oil producers declined 7.5 percent on lower crude prices. The industry index’s level relative to forecast earnings fell below that of the S&P/TSX this month for the first time since March 2010.                          

Oil producers and oilfield-services companies rallied today as crude futures rebounded after dipping below $100 a barrel in New York.“For those that believe in oil finding a bottom in the $100 range, you can make a case for owning companies with long- life reserves,” Johnson said.

Suncor Energy Inc., Canada’s largest oil and gas producer, rose 1.8 percent to C$41.10. Trican Well Service Ltd., the country’s biggest oilfield-services company, gained 4.6 percent to C$23.22.

Niko Resources jumped 5.9 percent,the most in 11 months, to C$77.85. India may increase diesel, kerosene and cooking oil prices this fiscal year to support state-run refiners, an Indian oil-ministry official said today. The official asked not to be identified because the decision is not yet public.     Alan Knowles, an analyst at Haywood Securities Inc. in Calgary, said in an e-mail that Niko’s move was probably related to India’s plans.

Potash Corp. advanced 1.8 percent in Toronto Stock Exchange trading to C$54.07 as wheat futures climbed 2.3 percent. The International Grains Council, based in London, reduced its production forecast by 0.7 percent from the one it issued last month, citing adverse weather in Europe and the U.S.                         

S&P/TSX banks declined the most in three weeks after Toronto-Dominion Bank and CIBC’s earnings lagged behind the average estimates of analysts in Bloomberg surveys.

CIBC lost 3.9 percent, the most in 10 months, to C$81.15 after missing analysts’ quarterly profit estimate by the most since 2009. TD, Canada’s second-largest lender by assets, decreased 1.5 percent to C$84.02 after its earnings trailed the average analyst estimate by 1.3 percent, excluding certain items. Royal Bank of Canada, the country’s biggest bank, slipped 1.1 percent to C$59.15.

Lundin sank 17 percent, the most in 28 months, to C$7.10 after abandoning efforts to sell the company because the bids it received were too low.

Inmet Mining Corp, the base-metals producer that agreed to buy Lundin in January, fell 3.9 percent to C$66.50. Lundin scrapped the Inmet deal to adopt a so-called poison pill defense against a rival, unsolicited bid from Equinox Minerals Ltd.                       

Neo Material Technologies Inc., which makes rare-earths and zirconium products, soared 12 percent to C$9.84. The shares have surged 14 percent since May 19, the day before Matt Gowing, an analyst at Mackie Research Capital Corp., said Neo Material may be acquired by a Chinese company.

Gildan Activewear Inc., Canada’s largest clothing-maker, rallied 4.2 percent to C$35.89 as North American apparel companies gained after Guess? Inc. forecast earnings higher than the average analyst estimate.

Yoga-wear retailer Lululemon Athletica Inc. tumbled 5.9 percent, the most since August, to C$89.82 after Liz Dunn, an analyst at FBR Capital Markets Corp., cut her rating on the shares to “underperform” from “market perform.” In a note to clients, Dunn wrote that the company’s margins may fall in the second half of the year.

 US

By Rita Nazareth

May 26 (Bloomberg) — U.S. stocks rose for a second day as higher-than-estimated corporate profits at companies including Tiffany & Co. overshadowed data showing the economy grew at a slower rate than forecast and jobless claims unexpectedly rose.

Tiffany, the world’s second-largest luxury jewelry retailer, advanced 8.6 percent after raising its full-year earnings forecast as profit beat estimates. NetApp Inc. rallied 6.9 percent as the data-management company forecast earnings that topped analysts’ projections. Walgreen Co. dropped 1 percent after Goldman Sachs Group Inc. cut the largest U.S. drugstore chain from its “conviction buy” list.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,325.72 at 4 p.m. in New York. The Dow Jones Industrial Average rose 8.17 points, or 0.1 percent, to 12,402.83. Both benchmark gauges yesterday snapped a three-day drop. “We’ve leveled off and softened somewhat,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $53 billion. “The bright side is that there’s a clear dichotomy between the health of corporate America and the economy. Profits remain good and there’s M&A activity. That tells me that we’re not going to see a huge move in stocks in either direction.”

 The S&P 500 fell 3.2 percent from an almost three-year high on April 29 through yesterday amid concern about Europe’s debt crisis and weaker-than-forecast economic data. Still, the benchmark gauge was up 5 percent from the end of 2010 through yesterday amid government stimulus measures and higher-than- forecast corporate profits.

 The U.S. economy grew at a 1.8 percent annual rate in the first quarter, less than forecast, reflecting a smaller gain in consumer spending than previously calculated. The revised rise in gross domestic product was the same as estimated last month and compared with a 3.1 percent gain in the prior quarter, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg News called for a 2.2 percent increase.

More Americans unexpectedly filed applications for unemployment benefits last week, a sign the labor market is struggling to gain momentum. Jobless claims increased by 10,000 to 424,000, Labor Department figures showed. The median estimate of economists was for a drop to 404,000.                          

Earlier today, stocks extended declines after Luxembourg’s Jean-Claude   Juncker, who leads the group of euro-area finance ministers, said the International Monetary Fund may not release its portion of a 12 billion-euro ($17 billion) aid payment to Greece next month.

There are specific IMF rules and one of those rules says that IMF can only take action when the refinancing guarantee is given over 12 months,” Juncker said today at a conference in Luxembourg. “I don’t think that the troika will come to the conclusion that this is given,” he said, using the term to describe a team of inspectors from the European Union, the IMF and European Central Bank.

 Have a wonderful evening.

 Be magnificent! 

My work will be finished if I succeed in carrying conviction to the human family, that every man or woman, however weak in body, is the guardian of his or her self-respect and liberty, and that this defence prevails, though the world be against the individual resister. 

-Mahatma Gandhi, 1869-1948 

As ever, 

Carolann 

Tolerance implies no lack of commitment

to one’s beliefs.  Rather it condemns the

oppression or persecution of others.

         -John F. Kennedy, 1917-1963