A Weekly Recap of All Things Resources to Friday, October 11th
‘That’s a Wrap’
By Rod Blake
The second week of October trading began with a collective note of optimism that the North American equity markets remained mildly positive in the face of increased Middle East tensions, ongoing warfare in Ukraine, a stronger than expected American economy and a weaker than expected numbers from China.
The way I see it – So far so good. The markets have come through the first week of a usually volatile October largely intact and climbing a very tall wall of worry. Of note to me was that while the four Major markets were up marginally on the week, the junior TSX Venture managed a weekly return of some 2% to the 595 level. Well off the lows of 535 set in August and building on a series of higher highs and higher lows. This pattern this time of the year is very unique for the Venture. For comparison – this time last year the Venture was in the middle of a freefall that took it from about 635 in July to just 510 in early November. Last year’s 20% drop was larger than most but the same pattern can be seen going back many years. Trading volumes also seem to be increasing with the Venture trading over 38-million shares last Friday – well up from the 20 – 25-million shares that have been the norm of late. This increased volume is needed to take out the overhead resistance in order for the Venture to move higher. So far so good for October – but there are still a few more weeks of pitfalls and worry to overcome.
Arcadium Lithium PLC ‘ALTM-N’ & ‘LTM-A’ shares’ surged up by$2.47 or 80.19% to US$5.55 after the lithium producer announced it had agreed to an US$6.7-billion all-cash takeover offer from mining giant Rio Tinto Group ‘RIO-N.
This drew a bid to the mostly lethargic lithium sector with Lithium Americas Corp. ‘LAC-T & N’ and Century Lithium Corp. ‘LCE-V’ closing at respective new 3-month highs of $4.01 and $0.36, while Standard Lithium Ltd. ‘SLI-V’ reached a new 11-month closing high of $3.30.
Lithium industry giant Albemarle Corporation ‘ALB-N’ rose to close at a new 4-month high of US$104.47.
This as the price of lithium rose to close at a new 2-month high of US$10,824 a tonne (t).
Uranium rose to a new 21/2-month closing high of US$83.55 a pound (lb).
Uranium stocks also caught a bit with Cameco Corporation ‘CCO-T’ & ‘CCJ-N’ and NexGen Energy Ltd. ‘NXE-T & N’ rising to respective new 3-month closing highs of $70.64 and $9.77.
In the 1980s, giant American petroleum companies surged into Alberta to take advantage of the provinces blossoming oilsand industry. Today few remain, and another just left after Chevron Corporation ‘CVX-N’ agreed to sell its Alberta petroleum assets to Calgary, AB based Canadian Natural Resources ‘CNQ-T & N’ in an all-cash deal valued at some US$6.5-billion.
This as crude oil surged up to close at a new 11/2-month high of US$77.37 a barrel.
The closely followed Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs rose by 1-rig in the past week to 586, down by 36-rigs from this time last year. Up north – the number of Canadian active rigs fell by 4-rigs to 223, up by 26-rigs from one year ago. Â
Investors continued to migrate into interest sensitive pipelines with Enbridge Inc. ‘ENB-T & N’ closing at a new 2-year high of $56.56 while Pembina Pipeline Corp. ‘PPL -T’ & ‘PBA-N’ reached a new all-time closing high of $58.80.
Superior Plus Corp. ‘SPB-T’ shares’ fell to a new 41/2-year closing low of $7.25.
Doman Building Materials Group Ltd. ‘DBM-T’ stock rose to close at a new 31/3-year high of $9.11.
Going the other way – the price of Western Forest Products Inc. ‘WEF-T’ fell by $04 or 7.14% to $0.52 after the Vancouver, BC company sighted weaker demand and higher U.S. softwood lumber duties for production cuts of about 10% from its BC mills for 2024.
Infrastructure companies stayed in favour with Aecon Group Inc. ‘ARE-T’ stock rising to close at a new 3-year high of $22.71.
Lode Gold Resources Inc. ‘LOD-V’ shares’ rose by $0.005 or 33.33% to close at $0.02 after the Toronto, ON based explorer closed a $3.5-million financing with Fancamp Exploration Ltd. to advance the companies numerous projects.
Snowline Gold Corp. ‘SGD-T’ continued to impress with drilling news from the company’s Rogue Project in Yukon. This time drill hole V-24-081 returned 2.10 grams per tonne gold (g/t Au) over 433.5 metres (m).
Kinross Gold Corp. ‘K-T’ & ‘KGC-N closed at a new 13-year high of $13.56.
The CRB Commodities Index reached a new 31/2-month closing high of 347.
This as the U.S. dollar Index or ‘DXY’ rose to close at a new 2-month high of 102.92.
While the Canadian Loonie fell to close at a new 2-month low of US$0.7266.
Lithium and uranium were commodities that fared the best on the week, while natural gas and silver took a hit.
Late the week – the NASDAQ Exchange closed at a new 3-month high of 18,343, and the TSX Venture Exchange reached a new 5-month closing high of 605. Meanwhile the TSX Composite, S&P 500 and Dow 30 indexes all reached respective new all-time closing highs of 24,471, 5,815 and 42,864.
For the Week – the DJI gained 1.21% to 42,864, with the S&P 500 up 1.17% to 5,815, and the NASDAQ rose 1.13% to 18,343. Across the line – the TSX rose 1.27% to 24,471 and the TSX Venture gained 1.68% to 605. The CBOE Volatility Index or VIX rose 6.51% to 20.46.
With currencies – the Canadian dollar fell 1.34% to US$0.7266, while the U.S. dollar ‘DXY’ rose 0.42% to 102.92.Â
With commodities – gold bullion gained 0.15% to US$2,657, while silver lost 2.02% to US$31.53, and copper fell 1.55% to US$4.45, as lithium rose 1.72% to US$10,824. Crude oil gained 1.41% to US$75.50, while natural gas dropped 7.07% to US$2.63, and uranium rose 1.58% to US$83.50. With soft commodities – lumber gained 0.38% to US$526. Overall – the CRB Commodities Index was unchanged at 346.