A Weekly Recap of All Things Resources to Friday, December 6th
‘That’s a Wrap’
By Rod Blake
The first week of the last month of 2024 began with all four of the major North American equity exchanges at or near all-time highs, and even the perennial underperforming TSX Venture Exchange only a few points below its 14-month high of 622 set this October.
The way I see it – To date – this has been a year that is quite unlike any I can remember. Led by the U.S markets, the major North American equity markets continue to climb an ever-higher wall of worry, shrugging off world conflicts, U.S. presidential elections, higher interest rates, and most recently tariffs. The markets even chewed through unscathed the traditional September – October correction which added to the magnitude of today’s record highs, and leaving wide eyed investors believing that “This Time is Different”. This new investment theme built around artificial intelligence (AI) will produce ever-increasing prosperity. Be happy, as Christmas and the Santa Clause rally are but a few weeks away – Ho Ho Ho.
Well – I don’t buy it. There is a term ‘At the Margin’ that professionals in the brokerage business are very aware of but retail investors seldom hear or much less pay attention to. Equities usually trade within a range based on assets, earnings or potential etc. Occasionally these trading ranges can be pushed up or down to extreme levels or to the ‘margins’ of common sense because an unexpected event – think of a new mineral discovery or Covid-19. Investors drive equities markets up to these ultra-high levels because of the fear of missing out, or down because of panic selling.
I think the current U.S. equity markets are pushing up against their upper margins by the never-ending enthusiasm of investors who believe that with IA – this time it is different and if we just keep buying and holding – higher markets lie ahead. Seasoned investors who value history know that, because of extreme margin events such as gold in 1980, the Dot-Com era of 2000, the U.S. housing market in 2008 – that it is never different. All markets trading at their margins will eventually return to the norm – some slowly, but others very quickly such as the stock market crash in October 1987. Right now, the U.S equity markets remind me of a bunch of drunks at a pool party all bouncing higher and higher on the end of diving board. I’ve done this – and it ended one way.
It was a week that included exciting drilling news as –
Canterra Minerals Corp. ‘CTM-V’ shares’ rose by $0.005 or 4.55% to close at $0.115 after the Vancouver, BC based junior explorer reported a drill hole from its Buchans Project in Newfoundland and Labrador returned 0.46% copper (Cu), 2.05% zinc (Zn), 1.00% lead (Pb), 5.61grams per tonne silver (g/t Ag) and 0.10 g/t gold (Au), or 1.53% copper equivalent (CuEq) across 105.00 metres (m).
Lundin Gold Inc. ‘LUG-T’ reported drill hole AMN-2014-156 from the Vancouver, BC based miner’s Bonza Sur exploration program in southeastern Ecuador returned 2.35 grams per tonne gold (g/t Au) over 100.30 metres (m).
And Snowline Gold Corp. ‘SGD-V’ reported drill hole V-24-096 from the company’s Valley Deposit in Yukon returned 1.08 g/t Au over 386.0m.
Interest sensitive pipeline and utility issues continued to attract investor attention with Enbridge Inc. ‘ENB-T & N’ reaching a new 91/2-year closing high of $61.63 and TransAlta Corporation ‘TA-T’ & ‘TAC-N’ closing at a new 121/2-year high of $19.10.
NexGen Energy Ltd. ‘NXE-T & N’ reported the Vancouver, BC based uranium developer had secured its first forward uranium sales agreements with multiple U.S. nuclear utility companies for delivery of U3O8 from the company’s Rook 1 Project in northern Saskatchewan’s Athabasca Basin.
Lumber stocks continued to catch a bid with the share price of Doman Building Materials Group Ltd. ‘DBM-T’ climbing to a new 31/2-year closing high of $9.87.
Ballard Power Systems Inc. ‘BLDP-T & Q’ stock surged up by $0.23 or 11.27% to close at $2.27 after the Vancouver, BC based alternative energy company announced a new Long Term Supply Agreement (LTSA) to initially supply 98 fuel cell engines to North American railroader Canadian Pacific Kansas City ‘CP-T & N’.
Uranium issues continued to attract investor interest with Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ shares reaching a new all-time closing high of $86.37.
Going the other way – the share price of Lithium Royalty Corporation ‘LIRC-T’ fell to close at a new 11/2-year low of $5.40.
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs was up by 7-rigs in the past week to 589, down by 37-rigs from this time last year. Across the line – the number of Canadian active rigs fell by 11-rigs to 194, unchanged from one year ago.
The Dow 30, S&P 500 and NASDAQ exchanges reached respective new all-time closing highs of 45,014, 6,090 and 19,860.
In Canada – the TSX Composite Index also climbed to a new all-time closing high of 25,692.
Meanwhile – the Canadian Loonie fell to close at a new 43/4-year low of US$0.7064.
The CBOE Volatility Index or ‘VIX’ dropped to a new 4-month closing low of 12.75.
Copper and silver made the greatest gains in commodities on the week, while natural gas and lumber were the greatest drain.
The markets were mixed going into the weekend.
For the Week – the DJI lost 0.60% to 44,643, with the S&P 500 up 0.96% to 6,090, and the NASDAQ ahead 3.34% to 19,860. Up north – the TSX gained 0.17% to 25,692 and the TSX Venture lost 0.65% to 610. The CBOE Volatility Index or VIX fell 5.63% to 12.75.
With currencies – the Canadian dollar dropped 1.05% to US$0.7064, while the U.S. dollar ‘DXY’ gained 0.22% to 105.97.
With commodities – gold bullion fell 0.98% to US$2,632, while silver gained 1.18% to US$30.97, and copper gained 1.47% to US$4.14, and lithium fell 2.12% to US$10,559. Crude lost 2.11% to US$67.18, and natural gas dropped 7.19% to US$3.10, while uranium rose 0.19% to US$77.80. With soft commodities – lumber lost 3.23% to US$569.
Overall – the CRB Commodities Index was flat at 345.