Last call for 2011

The chase by Noah Zivitz:

This was a year that (as of yesterday’s close) saw Canada’s benchmark stock index shed nearly 12%. Research in Motion trailed furthest among all index members, with still plenty of questions to be answered about whether the Jim and Mike show can regain lost market share in the new year. Even amid the ruins of a year that left the TSX lagging the S&P 500, there were some outsized returns to be had. Trilogy Energy shares surged 206%. Why? And what’s the plan to keep shareholders happy in 2012? And how about other leaders like Westport Innovations, Valeant and Dollarama? Throughout the day, and into next week on The Street, we’ll be reviewing the hits and misses of 2011.

Today is rich in symbolism for anyone who has watched Manulife Financial's volatile post-crisis experience. When former CEO Dominic D'Alessandro announced his retirement in 2009, his pay package generated tremendous criticism. Hearing the outrage loud and clear, D'Alessandro slapped conditions on the package. And now he appears poised to lose out on $10 million in restricted share units with MFC shares well below year-end vesting thresholds. After all of the hedging and de-risking Manulife has undergone over the past couple of it years, it still hasn't climbed back to levels D'Alessandro hoped for. Will patient MFC shareholders be rewarded in 2012? We’ll explore this one today.

And from today’s headlines:
The Globe and Mail is reporting Bill Ackman is reaching out to former CN CEO Hunter Harrison to lead the way at CP. According to the unconfirmed report, Harrison has demonstrated an interest in Ackman’s approach. We’re seeking comments from principals. Let’s also ask shareholders and analysts for perspective on the possibility of the iconic rail boss plying his trade at CP.

Manufacturing activity shrank in China this month, albeit at a slower pace than in November. We need to hear what the source of the PMI softness is, and what policy measures can be expected from Beijing next year. With Hu Jintao nearing the end of his term as president, I’d like to hear more about the country’s next leader.

After a string of losses that left gold in bear market territory at one time yesterday, the metal is staging an end of year rally today. But for how long, and what could support prices early in 2012? The Street gets a trader’s perspective at 8:30, and the technical view at 8:45.
January 3 will be the most important day thus far for candidates seeking to lead the Republican party in the next U.S. presidential race. Today and Tuesday we’ll need to ramp up analysis of what’s at stake in the Iowa caucuses.

We’ll be watching Silvercorp shares after it announced late yesterday two consulting firms have been retained to provide technical reports on a trio of projects to “alleviate” lingering concerns after the company had to fend off fraud allegations earlier this year.

Gold Falls,Global markets declined in light volumes on Wednesday

Global markets declined in light volumes on Wednesday, as the price of gold fell and a report showed eurozone banks were hoarding cash from the European Central Bank instead of recirculating it through loans.

In Toronto, the benchmark S&P/TSX composite index fell 198.26 points, or 1.66%, to 11,728.41. Nine of the 10 sub-indexes declined, led by materials, down 4.22%, and energy, which fell 1.62%.

The price of crude oil fell US$1.98 to US$99.36 a barrel as investors were reassured that even if Iran did block the Strait of Hormuz to oil shipments as it has threatened, the situation would not last long enough to cause real shortages. The price of gold dropped for the fifth straight session - its longest slump since October 2009 - closing at US$1,562.90 an ounce, a loss of US$31.30. It has fallen in 10 of the last 12 sessions. "As a hiding place, it served its purpose," Bob Decker, a money manager at Aurion Capital in Toronto, said of gold. "As people look to the new year with a little more optimism with regard to the U.S. economy, maybe they're taking profits in their winning trades."

Profit-taking - and getting the house in order as the year ends - explained much of the declines on the markets, which came back from the Christmas holiday on Tuesday and in Canada on Wednesday.

"Volume goes light and really the only things that are left are the hedge funds making sure that they're in good shape for year-end and a lot of them have to sell to cover their losses," John Kinsey, portfolio manager at Caldwell Securities, said.

"The other part of it is the windowdressing," he said. "This is the most important quarter for window-dressing because it's obviously the end of the year for most mutual funds and other corporations and so they all sell their losers and that puts pressure on the market."

The Canadian dollar fell 33 basis points to US97.64¢ on Wednesday as the U.S. dollar advanced.

Also a factor on Wednesday were reports that eurozone banks were sitting on cash from the ECB. "If the eurozone banks are too afraid to lend, that does not bode well for future growth in the region," Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, told Bloomberg. "The banks are not borrowing from the ECB in order to spur lending. It's to shore up their own balance sheets. That could lead to a credit contraction in the eurozone."

The Dow Jones industrial average fell 139.94 points, or 1.14%, to 12,151.41 and the Nasdaq composite slipped 35.22 points, or 1.34%, to 2,589.98. Canada's junior Venture exchange dropped 18.60 points, or 1.27%, to 1,451.08.

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