A Weekly Recap of All Things Resources to Friday, April 22nd
Â ‘That’s a Wrap’
Â By Rod Blake
Following a much deserved Easter long weekend the mentally refreshed investors, traders brokers and portfolio managers returned to a full week of market action that produced among other highlights –
Natural gas once again led the commodity markets higher early in the week – reaching a new 14-year closing high of US$7.82/mmbtus.
Share’s of New Found Gold Corp. ‘NFG-V’ rose toÂ a 4-month high of $9.40 on word that gold financier Eric Sprott had bought an additional 15-million shares of the company – bringing his holdings of the Newfoundland & Labrador gold explorer to 31.4%.
In 33-plus years as a broker – one key market indicator I witnessed time and again was that during the early stages of a bull market it is the largest and most followed companies in that sector that lead the market higher. With that in mind it was of great interest to see the share price of Newmont Mining ‘NEM-N’ – the world’s largest and widely held gold miner – rise to a new record closing high of US$86.42.
Trevali Mining Corp. ‘TV-T’ shares’ tumbled by $0.53 to $1.36 after the lead/zinc miner reported that eight men were unaccounted for following a flash flood at its Perkoa mine in Burkina Faso.
Statistics Canada reported that – led by a an almost 40% rise in gasoline prices – the country’s year-over-year inflation rate rose by another 1.0% in March to an annualized 31-year high of 6.7%. Meanwhile – wages over the year rose by only 3.4%. (I would love to be a fly on the wall of future union meetings.)
The way I see it – Passive technology investors are learning an expensive lesson that resource investors have known for years, that is – ‘ When it’s Over – it’s Over’. Their latest lesson came this week when the price of Netflix Inc. ‘NFLX-Q’ stock plunged by $122.42 or over 35% to US$226.12 after the former market darling’s 1st-quarter report revealed a loss of 200,000 customers – the streaming company’s first quarterly loss of customers since 2011. Unlike resource investors who know that a resource market can turn down at anytime (think crude oil at US$-25 in 2020) – technology investors have successfully been buying the dips since the end of the Great Recession in 2009, and the market has always taken their investment higher. Netflix shares rose from under US$10 to over US$680 last November. They’ve since fallen by about 67%. The passive investing game in technology stocks would now seem to be over.
The closely watched Baker Hughes Petroleum Rig Count reported the number of American drilling rigs rose by 2 to 695, an increase of 257 from this time last year. To the north – the number of Canadian rigs fell by 2 to 101 for an increase of 46 over a year ago.
The North American equity markets fell by over 2% of Friday on indications that the U.S Fed and Bank of Canada will get more aggressive in raising interest rates to try and bring inflation under control.
For the Week – The DJI fell by 1.86% to 33,811, while the S&P 500 dropped 2.75% to 4,272 and the NASDAQ sunk by 3.83% to 12,839. Up north – the TSX lost 3.06% to 21,186 and the TSX Venture cratered by 6.27% to 837.
Gold bullion lost 2.13% to US$1,932, as silver fell by 4.66% to US$24.14 and copper dropped by 2.96% to US$4.60. Meanwhile – crude oil Â sunk by 4.66% to US$101.63 while natural plunged by 11.61% to US$6.47. The Canadian dollar lost 0.74% to US$0.7873. Overall – the CRB Commodities Index fell by 2.41% to 324.
And Finally – One of the benefits of not being super rich is that you don’t have some of the problems of the super rich. Case in point – Meta Platforms Inc. ‘FB-Q’ or Facebook recently reported that it took almost US$27-million last year to provide security for CEO Mark Zuckerberg and his family.
Good luck in the week ahead….