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The Panic is Over

|Includes:BCE Inc. (BCE), CF, ERO, GRDOW, PCH, SPY, TU
The euro is pointing to a relief in the markets. The euro has rallied to 1.2567 which alleviates fears the euro will be a hole for North American corporate profits to fall into.
The German parliament approved the German portion of the 1 trillion dollar bailout for any miscreants in the Club Med, although belt tightening is in full swing and hopefully will mean less credit upsets in the future.
We expect the Greek default that could come by the end of the Summer, has been discounted by North America, if not in Europe.
The DJIA is up 50 points to 10,121, after successfully testing the low of 9,869 set on May 6. The DJIA is now up 200 points over today’s intraday low of 9,918.

The Canadian S&P/TSX index is up 34 points to 11,440 and had fallen to below the 11,422 low of May 6, reaching 11,179 today. It is now 260 points above the low today.
Even lumber is up today, with the July futures at $239.80, up $3.80.
We also had pulp price increases announced by West Fraser Timber (NBSK up $20/tonne worldwide) following increases by Canfor Pulp and SFK Pulp.
The Brazilean producers are also toeing the price hike line in spite of a weakening in the Real. Number three producer CENIBRA raised BEK (Bleached Eucalyptus Kraft) Pulp by $30/tonne in both North America and Europe, and Fibria Celulose S.A.  (the world’s largest producer of pulp) by $30/tonne as well.
We are aggressively buying these stocks today:
Telus Non-Voting (NYSE:TU)
Artis REIT
Calloway REIT
Canexus Income Fund
Potlach Corp REIT (NASDAQ:PCH)

We have also bought some CF Industries (NYSE:CF).
It’s hard to find a time when Canadian real estate REIT’s were so beaten down, just as the DJIA and S&P were poised to take off, yields on short and long term paper were so low, and only 4 trading days until they go ex-distribution, which is supportive of their prices for next week.

We wish to send our kind thanks to doomsters Nouriel Roubini, Mark Faber, and David Rosenberg for helping create these great buying opportunities.

Disclosure: All Canadian and US stocks mentioned