Â ‘That’s a Wrap’
By Rod Blake
While the American brokers, traders, portfolio managers and investors enjoyed an extra day off as a result of their July 4th Independence Day holiday, their Canadian counterparts went to work to look into the numbers for the first half of the year, and what they discovered was simply quite surprising for some while entirely predicted by others.
For the first half of 2022 – the Dow was down by 15.00%, with the S&P 500 lower by 20.26% and the NASDAQ off by 29.72%. The Canadian markets also suffered with the TSX lower by 11.19% while the TSX Venture collapsed by 34.36%.
With Commodities – Gold bullion was up by 1.31%, while silver lost 24.91% and copper lost 15.48%. Crude oil was up by 44.27% and natural gas gained 54.86% while lumber fell by 13.18%. The big winner was lithium with a 6-month gain of 434.27%. Overall the CRB Commodity Index had a 6-month gain of 36.17% and the Canadian dollar lost 10.83%.
Just as Europe is scrambling to secure any type of energy, the European Central Bank (ECB) announced it will shift its â‚¬386-billion holdings of corporate bonds away from carbon-intensive companies and more towards those with a greener footprint in an effort to keep its corporate bond holdings in line with the 2015 Paris Agreement.
Cathedral Energy Services Ltd. ‘CET-T’ shares rose by $0.16 or 32% to $0.66 after the Calgary based directional drilling services company announced it was making further inroads into the United States by acquiring Wyoming/Houston based directional drilling services company Altitude Energy Partners, LLC in a cash & stock deal of some US$100-million.
The way I see it – How confused is the oil market? Try this – within 24-hours of each other – RCMA’s Merchant Commodity Fund predicted the Russian/Ukraine conflict will cause crude to surge to US$200 – $250 later this year, while Citigroup Inc. warned that a demand-crippling recession could drive oil down to $65 in the same time frame.
Hecla Mining Co. ‘HL-N’ significantly increased its Canadian silver reserves by announcing an agreement to purchase Alexco Resource Corp. ‘AXU-T&N’ and its historic Keno Hill silver deposit in Yukon in an all-stock deal valued at a 23% premium or US$0.47 for each Alexco share for a total value of some US$76-million. The deal will also see mineral streamer Wheaton Precious Metals Corp. ‘WPM-T&N’ give up its silver streaming interest on the Keno Hill project in exchange for a further US$135-million in Hecla common stock.
The price of Resolute Forrest Products Inc. ‘RFP-T&N’ stock surged up by $ or % to $ after the North American forest giant agreed to be taken over by fellow North American pulp & paper giant Domtar Corporation in a cash or stock deal valued at some US$2.7-billion.
S&P Global reported that the Canadian sales of electric vehicles rose by a further 3.2% in the 1st-quarter of 2022 to account for 8.2% or 1-in-12 of new vehicle registrations. Â
High crude and natural gas prices were reflected in the price of Crescent Point Energy Corp.Â ‘CPG-T&N’ stock which soared up by $1.09 or 13.07% to $9.43 after the Calgary based petroleum producer increased its quarterly dividend by over 20% to $0.08-per-share.
The European Union Parliament declared that uranium and natural gas can be labelled ‘green’ for investment purposes.
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 2-rigs to 752, an increase of 273 over the year. North of 49 – the number of active Canadian rigs rose by 9 to 166 for an increase of 38 in the past year.
For the Week – The DJI gained 0.77% to 31,338 as the S&P 500 rose by 1.93% to 3,899 and the NASDAQ improved by 4.56% to 11,635. Up north – the TSX rose by 0.86% to 19023 while the TSX Venture lost 0.32% to 615.
Gold bullion fell by 3.33% to US$1,742, as silver lost 1.93% to US$19.29 and copper dropped 2.22% to US$3.52. Elsewhere – crude oil lost 3.36% to US$104.79 while natural gas gained 5.24% to US$6.03. The Canadian dollar was lower by 0.43% to US$0.7729. Overall – the CRB Commodities Index fell by 1.29% to 307.
And Finally – Most would agree that the first six-months of the year has been tough on investors. But please take a second to feel the ‘pain’ of tech giants Elon Musk, Jeff Bezos, Mark Zuckerberg and others of the world’s 500 richest people who saw their net worth decline by a combined US$1.4-trillion in the first half of 2022.