‘That’s a Wrap’
By Rod Blake
Shell shocked traders, brokers, investors and portfolio managers strapped themselves in, put on their pith helmets and nervously hoped that last week’s market carnage was the final barrage of exhaustion selling of the current devastating correction. Defensive positions are the order of the day in these situations and the greatest position of safety is the US dollar (DXY) which opened up nearly 1/2-a-point higher at 20-year year high of 103.70 – which in turn pushed gold down by $56 to US$1,860.
Sandstorm Gold Royalties ‘SSL-T’& ‘SAND-N’ using its shares as a currency, announced the acquisition of fellow gold royalty/streamer Nomad Royalty Company Ltd, ‘NSR-T&N’ in an all-stock deal of some $755-million. After the news Sandstorm’s stock price (the issuer of the takeover shares) fell by $0.69 or 7.22% to $8.87 while the price of Nomad stock (the receiver of the shares) rose by $0.91 or 9.49% to $10.50.
Canadian fertilizer giant Nutrien Ltd. ‘NTE-T&N’ tried to alleviate some of the current Russian/Ukrainian war induced food supply chain concerns by stating – “Nutrein is responding by safely increasing potash production and utilizing our global supply chain to provide customers with the crop inputs and services they need for this critical growing season.” Following the announcement – Nutrein shares’ rose by $7.67 or 6.00% to close at $135.00.
International integrated energy giant BP P.L.C. ‘BP-N’ sighted increased petroleum prices in announcing a further US$2.5-billion in share buybacks.
Reality hit IAMGOLD Corporation ‘IMG-T & IAG-N’ shareholders hard as their stock plunged by $0.91 or 25.14% to $2.71 after the multi-mine gold producer reported significant cost overruns at its development stage Côté Gold project in Northern Ontario.
Crude oil spiked up by $5.20 or 5.06% to US$107.75 after the European Union announced a plan for phasing out the importation of Russian crude over the next 6-months.
The U.S. Fed does as expected and raised its benchmark fed funds rate by a 22-year high 0.5% to a range of 0.75% – 1.00%.
All of which helped to push the U.S. 10-year treasury note interest rate up by another 0.19% to a 31/2-year high of 3.12%.
Global companies exposed to the electric vehicle (EV) markets continued to secure supply line partnerships. Case in point – The share price of Li-Cycle Holdings Corp. ‘LICY-N spiked up by $0.55 or 7.65% to US$7.74 on word that resource giant Glencore plc ‘GLEN-L’ was investing US$200-million in the Ontario based lithium battery recycling company and making Li-Cycle its preferred global lithium-ion battery recycling partner.
Meanwhile multinational miner Vale S.A. ‘VALE-N’ and EV manufacturer Tesla Inc. ‘TSLA-Q’ signed an agreement that will see Vale will provide Tesla with low-carbon class 1 nickel from its Canadian operations for the automaker’s batteries. Further out – Vale forecasts that 30 – 40% of its class 1 nickel sales will be going to the EV market.
The closely watched Baker Hughes Petroleum Rig Count reported the number of American drilling rigs rose by 7 to 705, an increase of 257 from this time last year. Across the line – the number of Canadian rigs fell by 4 to 91 for an increase of 36 over a year ago.
For the Week – The DJI lost 0.24% to 32,899, while the S&P 500 dropped by 0.21% to 4,123 while the NASDAQ fell by 1.54% to 12,145. Up north – the TSX lost 0.62% to 20,633 while the TSX Venture fell by 5.41% to 770.
Gold bullion lost 0.69% to US$1,884, as silver fell by 1.76% to US$22.36 and copper dropped by 3.19% to US$4.25. Meanwhile – crude oil rose by 5.67% to US$110.63 while natural gas surged up by 10.07% to US$7.98. The Canadian dollar rose 0.60% to US$0.7763. Overall – the CRB Commodities Index gained 0.91% to 331
And Finally – First it was virtual currency, then virtual artwork and now virtual real estate is attracting investor attention. Earlier this week virtual entity Bored Apes recently sold US$320-million of metaverse digital real estate in a one-day online crypto auction sale.
Good luck in the week ahead….