A Weekly Recap of All Things Resources to Friday, April 28th
‘That’s a Wrap’
By Rod Blake
The final trading week of April began with some confusion for many of the brokers, investors and portfolio managers as the market seemed to be sending out a continuous series of mixed signals. Will the U.S Fed raise or not raise interest rates again in early May? The U.S dollar that was dropping now looked to be reversing. Resource prices that were going up seemed to have stalled.
The way I see it – I think the recent market sentiment could best be described as like a deer caught in the headlights. That is – there is something unknown coming at us and most don’t know which way to go so they just stay in one spot and wait for the unknown to happen. And like the deer in the headlights – there’s a very good chance it’s not going to be good. It may be a near miss or it could be quite consequential, but the I think the next few months are going to give investors unforgettable lessons in why not to stand in the middle of the road.
The Alberta Energy Regulator (AER) said it was investigating a report of 43 dead waterfowl birds found at a Suncor Energy Inc. ‘SU-T & N’ oilsands tailings facility north of Fort McMurray, AB.
Later in the week Suncor announced it had agreed to purchase TotalEnergies SE ‘TTE-Q’ Canadian operations which include a 31.23% working interest in the Fort Hills oilsands operation as well as Total’s 50% interest in the Surmont in situ asset in an all-cash deal of some $5.5-billion.
Cenovus Energy Inc. ‘CVE-T & N’ joined a growing list of petroleum companies to give back more to shareholders when the Calgary, AB based integrated oil company announced a 33% increase in its quarterly dividend to $0.14 per share.
The key Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs increased by 2-rigs over the past week to 755, up by 57 from this time last year. Up north – the number of Canadian active rigs fell by 12-rigs to 93, a drop of 2 in the past year.
In a province where the adoption of electric vehicles (EVs) is the highest in the country with over 18% of new light-duty vehicle sales being electric and where transportation accounts for about 40% of emissions – the British Columbia government will provide $26-million to build about 250 new public charging stations across the province. Through both public and private participation, BC has a target of 10,000 EV charging stations by 2030. The province will also spend nearly $90-million to help companies and organizations to convert to zero-emission heavy duty vehicles.
This as the price of Lithium fell to a new 11/2-year low of US$23,841 per tonne.
Teck Resources Ltd. ‘TECK-B-T’ & ‘TECK-N’ shares’ rose by $2.39 or 4.05% to $61.35 after the Vancouver, BC diversified miner surprised the market by withdrawing its previously announced ‘Separation Proposal’ just hours ahead of a scheduled shareholders’ meeting to vote on the proposal to separate the company’s base metal and coal mining operations.
The price of uranium stocks moved up in unison as the price of U3O8 rose by another $1.10 or 2.16% to a new 6-month high of US$52.10 per pound.
While within the group – Saskatchewan uranium giant, Cameco Corporation ‘CCO-T ‘ & ‘CCJ-N’ handily beat the street with its 1st-quarter financials.
With a move to increase efficiencies – Cascade Inc. ‘CAS-T’ announced the Kingsey Falls, QC based tissue company announced it will close two underperforming plants in Barnwell, SC and Scappoose, OR as well as a paper machine at its plant in St. Helens, OR.
TC Energy Corp. ‘TRP-T & N’ projected that the Calgary, AB based energy giant’s Coastal GasLink pipeline that will carry natural gas to be liquefied in Kitmat, BC, will be mechanically complete by the end of 2023.
Mining is very much a people business and Agnico Eagle Mines Ltd. ‘AEM-T & N’ reported the best quarterly safety performance in the Toronto, ON miner’s 65-year history.
The markets were generally optimistic going into the weekend and the CBOE Volatility or Fear Index (VIX) fell to a new 13/4-year low of 15.78.
For the Week – the DJI and the S&P 500 gained 0.85% to 34,098 and 4,169 respectively and the NASDAQ rose by 1.28% to 12,227. In Canada – the TSX lost 0.27% to 20,637 and the TSX Venture lost 0.16% to 613. The CBOE Volatility Index or VIX fell by 5.85% to 15.78.
With currencies – the Canadian dollar lost 0.05% to US$0.73.82 and the U.S. dollar ‘DXY’ fell by 0.02% to 101.68.
With commodities – gold bullion gained 0.30% to US$1,988, with silver was unchanged at US$25.04, as copper lost 2.76% to US$3.87, and lithium fell by 3.23% to US$24,904. Crude oil lost 1.44% to US$76.84 while natural gas gained 7.62% to US$2.40, and uranium rose by 2.16% to US$52.10. With soft commodities – lumber fell by 11.25% to US$347. Overall – the CRB Commodities Index lost2.01% to 292.
And Finally – While North American central bankers seem to have capped inflation in the 6% per year range – Argentina is reporting the South American country’s inflation rate is expected to hit over 7% for the month of March alone and is expected to peak later this year at an annual rate of about 110%.