A Weekly Recap of All Things Resources to Friday, August 16th
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‘That’s a Wrap’
By Rod Blake
When the final bell rang last Friday afternoon August 9th, there was a collective agreement among brokers, investors, traders and portfolio managers alike that they had just experienced a week of extreme market volatility that would probably not be repeated to that extent in their carriers.
The way I see it – We had a term for last week’s market action – “Whipsawed” – A term from logging days of old where a long crosscut saw would bind in the tree and suddenly push back against the logger and then carry on as before. In market terms, we saw the major North American markets drop some 3% on the first day of the week – followed of course by all of the “I told you so” negative economic commentary – only to witness them rally late in the week to end the week more or less flat. Last week’s action encouraged people to make rash decisions. Some threw in the towel and get out before the market went lower, while others took advantage of a buying opportunity of stock on sale. Did last week’s sell off mark the bottom of the correction? And was the late week recovery the start of the next rally, or a dead cat bounce ahead of more down days to come. Stay tuned.
Gold Bugs cheered loudly late in the week when the yellow metal closed at a new all-time high of US$2,508 a troy ounce (t oz).
All of which helped the share price of IAMGOLD Corp. ‘IMG-T’ & ‘IAG-N) to reach a new 4-year closing high of $6.94, while New Gold Inc. ‘NGD-T & N.A’ closed at a new 61/2-year high of $3.51 and Eldorado Gold Corp. ‘ELD-T’ & ‘EGO-N’ rose to a new 71/3-year closing high of $24.21.
Going the other way – Minera Alamos Inc. ‘MAI-V’ fell by $0.025 or 8.77% to close at a new 41/4-year low of $0.26 on heavy trading volume of 3.27-million shares, but no visible news posted.
The high price of gold couldn’t help the shareholders of Victoria Gold Corp. ‘VGCX-V’ as they watched their investment fall to close at a new all-time low of $0.465 when the Yukon Government applied for and was granted a receiver oversee the company’s affairs.
Osisko Mining Inc. ‘OSK-T’ stock rose by $1.85 or 62.93% to $4.79 after the Toronto, ON based mineral developer agreed to $2.16-billion all-cash takeover by Australia’s Gold Fields Ltd. ‘GFI-Q’, giving Gold Fields 100% interest in the prized Windfall Gold Project in Quebec.
Uranium fell to close at a new 8-month low of US$81.25.
Hudbay Minerals Inc. ‘HBM-T & N’ stock fell by $0.14 or 1.38% to $9.98 after the Toronto, ON based copper/gold miner failed to impress investors’ with the company’s 2nd-quarter financial and production figures.
Crew Energy Inc. ‘CR-T’ shareholders were pleased to see their investment surge up by $2.98 or 76.40% to $6.88 after the Calgary, AB based petroleum producer agreed to be taken over by fellow Calgary natural gas producer Tourmaline Oil Corp. ‘TOU-T’ in an all-stock transaction that valued Crew at some $1.3-billion.
Big oil caught a bid with –
Imperial Oil Ltd. ‘IMO-T & N’ shares’ rose to close at a new all-time high of $105.47.
And, oilsands giant Suncor Energy Inc. ‘SU-T & N’ stock ran up to a new 16-year closing high of $57.15.
Birchcliff Energy Ltd. ‘BIR-T’ shares’ rose by $0.12 or 1.94% to $6.30 after the Calgary, AB petroleum company issued a robust 2nd-quarter report.
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 2-rigs in the past week to 586, down by 56-rigs from this time last year. Across the line – the number of Canadian active rigs was unchanged at 217, up by 28-rigs from one year ago. Â
Interest sensitive pipeline stocks continued to do well with the price of Enbridge Inc. ‘ENB-T & N’ reaching a new 11/2-year closing high of $54.22.
Infrastructure company Aecon Group Inc. ‘ARE-T’ stock rose to close at a new 21/2-year high of $17.89.
And energy producer TransAlta Corp. ‘TA -T’ & ‘TAC-N’ saw its stock price reach a new 13/4-year closing high of $11.72.
Lithium prices continued to suffer as the price of the volatile metal fell to close at a new 31/2-year low of US$10,683 a tonne (t).
Which no doubt helped to drag the price of lithium giant producer Albemarle Corporation ‘ALB-N’ stock down to a new 4-year closing low of US$72.85.
Sigma Lithium Corp. ‘SGML-V & Q’ closed at a new 33/4-year low of $11.93. The São Paulo, Brazil based company also announced one full year of consistent lithium production of some 22,000 tonnes of Quintuple Zero Green Lithium a month.
While closer to home – Lithium Americas Corp. LAC-T & N’ shares’ fell to close at a new all-time low of $2.98.
Iron ore fell to a new 13/4-year closing low of US$98.55 a tonne (t).
The U.S. Dollar Index or ‘DXY’ fell to close at a new 7-month low of 102.40.
Copper led commodities higher on the week, while lithium was off the most.
All of the North American markets were ahead going into the weekend.
For the Week – the DJI gained 2.94% to 40,660, with the S&P 500 up 3.93% to 5,554 and the NASDAQ ahead 5.30% to 17,632. In Canada – the TSX rose 3.33% to 23,055 and the TSX Venture gained 5.20% to 566. The CBOE Volatility Index or VIX fell 27.27% to 14.80.
With currencies – the Canadian dollar gained 0.36% to US$0.7310, while the U.S. dollar ‘DXY’ lost 0.71% to 102.40.Â
With commodities – gold bullion gained 3.17% to US$2,508, with silver up 5.87% to US$29.03, as copper rose 4.28% to US$4.14, while lithium lost 2.36% to US$10,683. Crude oil fell 0.52% to US$76.60, with natural gas down 1.39% to US$2.13, and uranium off 0.43% to US$81.25. With soft commodities – lumber gained 0.57% to US$529. Overall – the CRB Commodities Index rose 1.55% to 328.
And finally – As summer is the time to take holidays, and the Okanagan is a favoured destination – this scribe will be travelling there next week to visit family and friends. As such, there will not be a Wrap next Friday, August 23rd, but if all goes as planned, this column will return on Friday, August 30th.