A Weekly Recap of All Things Resources to Friday, November 15th

‘That’s a Wrap’

By Rod Blake

As the brokers, investors, traders and portfolio managers opened their terminals to start the new week’s action, there was a combined sense of optimism in that, based on last week’s gains, the Major American North American equity markets were off to a great start towards their traditional yearend rally. A little farther north – those following the resource heavy TSX Composite and Venture Exchanges were well aware that the resource equities seem to have hit a ceiling and look to be heading for a correction.

The way I see it – The big cap American equity markets seem to be in world of their own with more and more money chasing the same issues as no one wants to be left out of this extraordinary rally. This bull has no rhyme or reason and will run until it doesn’t. The resource markets however, are following a more traditional path of advances followed by healthy corrections. This time of year, from late October to early December is one of those traditional correction periods from what has been an excellent resource market for most of the year. Shrewd investors might be wise to take profits on their runaway American positions and accumulate resource positions ahead of the historically buoyant first quarter for resource equities.

With that said – the major American markets rose to respective new all time closing highs with Dow 30 reaching 44,293, the S&P 500 closing at 6,001 and the NASDAQ reaching 19,299.

A few days later the TSX Composite rose to a new all-time closing high of 25,050.

Helped along by interest rate sensitive pipelines such as TC Energy Corp. ‘TRP-T & N’ reaching a new 4^3/4-year closing high of $69.10.

HudBay Minerals Inc. ‘HBM-T & N’ stock rose by $0.12 or 1.00^% to $12.10 after the Toronto, ON based gold/copper miner reported a positive 3^rd-quarter, which included record gold production of over 80,000 ounces (oz).

Snowline Gold Corporation ‘SGD-V’ continued to report exceptional drill hole assays with Hole V-24-091 returning 1.06 grams per tonne gold (g/t Au) gold over 380.4 metres (m) from the company’s Rogue Project in Yukon.

This as the price of gold bullion fell to close at a new 2-month low of US$2,561 a troy ounce (T oz).

Silver fell to a new 2-month closing low of US$30.23 a troy ounce (t oz).

Impact Silver Corp. ‘IPT-V’ shares’ surged up $0.06 or 23.08^% late in the week to close at $0.32 on heavy volume with no news showing.

Copper also dropped to close at a new 2-month low of US$4.05 a pound (lb).

Zinc fell to a new 2-month closing low of US$1.33 a pound (lb).

Nickel dropped to close at a new 9-month low of US$7.04 a pound (lb).

Fission Uranium Corp. ‘FCU-T’ shares’ fell $0.20 or 21.74^% to $0.72 as investors fled the stock ahead of the company’s planned takeover by Australia’s Paladin Energy Ltd. ‘PALAF-OTC’.

Meanwhile – NexGen Energy Ltd. ‘NXE-T & N’ stock rose by $0.49 or 4.85^% to $10.60 after the Vancouver, BC based uranium developer announced a new high-grade expansion of the company’s Patterson Corridor East Project in northern Saskatchewan’s Athabasca Basin.

This as the price of uranium closed at a new 1-year low of US$76.55 a pound (lb).

Finning International Inc. ‘FTT-T’ stock fell by $3.80 or 9.11^% to close at a new 2-month low of $37.92 after the Vancouver, BC based Caterpillar distributor disappointed with its 3^rd-quarter financials.

Going the other way – Suncor Energy Inc. ‘SU-T & N’ stock rose by $2.24 or 4.21^% to $55.40 after the Calgary, AB based petroleum giant pleased the street with the company’s 3^rd-quarter financials and dividend.

Paramount Resources Ltd. ‘POU-T’ shares’ surged up by $4.18 or 15.32^% to $31.46 after the Calgary, AB based petroleum producer announced the sale of a portion the company’s Alberta Montney assets to Denver, CO based Ovintiv Inc. ‘OVV-N & T’ in an all-cash deal of some $3.325-million.

The influential Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs was down by 1-rig in the past week to 584, down by 34-rigs from this time last year. Up north – the number of Canadian active rigs fell by 7-rigs to 200, up by 4-rigs from one year ago.  

Lithium fell to close at a new 3^1/2-year low of US$9,992 a tonne (t).

Which now doubt helped the price of Quebec focused uranium developer Patriot Battery Metals Inc. ‘PMET-T’ to drop to a new 2^1/3-year closing low of $2.67.

Rivian Automotive Inc. ‘RIVN-Q’ shares’ surged up by $1.45 or 13.71^% to US$12.03 after the American electric vehicle (EV) manufacturer announced a US$5.8-billion joint venture deal with Volkswagen Group to produce the next generation of future electric vehicles (EVs).

Lumber rose to close at a new 8-month high of US$607 per 1,000 board feet (mbf).

Which no doubt helped the price of Doman Building Materials Group Ltd. ‘DBM-T’ to reach a new 3^2/3-year closing high of $9.29.

The U.S Dollar Index or ‘DXY’ rose to a new 2-year closing high of 106.90.

This as the Canadian Loonie dropped to close at a new 4^1/2-year low of US$0.7095.

Lumber and natural gas were the best performing commodities on the week, while crude oil and copper dropped the most.

After reaching record closing highs earlier in the week – the Major North American markets turned negative and were in full retreat going into the weekend. Meanwhile, the lowly TSX Venture Exchange followed precious and base metal prices lower for the entire week.

For the Week – the DJI lost 1.24^% to 43,445, with the S&P 500 off 2.08^% to 5,871, and the NASDAQ down 3.15^% to 18,680. Across the line – the TSX gained 0.53^% to 24,891 while the TSX Venture fell 2.96^% to 591. The CBOE Volatility Index or VIX rose 8.03^% to 6.14.

With currencies – the Canadian dollar dropped 1.31^% to US$0.7095, while the U.S. dollar ‘DXY’ gained 1.71^% to 106.74. 

With commodities – gold bullion lost 4.62^% to US$2,561, as silver fell 3.39^% to US$30.23, while copper dropped 5.59^% to US$4.05, and lithium fell 0.57^% to US$10,015. Crude oil fell 4.94^% to US$66.97, while natural gas gained 5.62^% to US$2.82, and uranium rose 3.00^% to US$78.90. With soft commodities – lumber gained 8.78^% to US$607. Overall – the CRB Commodities Index fell 2.05^% to 335.