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July 31, 2020

7 @ 7:00

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1. Spot Gold has traded between $1,957 and $1,988 so far todayas of 7:00 am Pacific, Gold has climbed $an ounce to $1,965Gold is headed for its biggest monthly advance in 8.5 years…money managers have allocated $3.9 billion into Gold, the 2nd largest weekly inflow ever, Bank of America said today…Silver, meanwhile, is on track for its largest monthly gain on record going back to 1982 – up over 30%, thanks to a variety of factors driven of course by the pandemic…it has added another 42 cents this morning to $23.93…on the base metal front, Nickel and Zinc are up slightly at $6.22 and $1.04, respectively, while Copper is steady at $2.90…Crude Oil is up 29 cents to $40.21 while the U.S. Dollar Index has rebounded one-fifth of a point to 93.13OPEC Oil output has risen by over 1 million barrels per day (bpd) in July as Saudi Arabia and other Gulf members ended their voluntary extra supply curbs on top of an OPEC-led deal, and other members made limited progress on compliance…U.S. consumers increased spending 5.6% in June but appear to have pulled back since then, restraining the economy’s recovery from the Wuhan COVID-19 outbreak…Americans’ ability and willingness to spend will largely determine the economy’s path in the coming weeks and months…emergency unemployment benefits are set to expire today and Congress and the White House still seem far apart on an agreement…blowout big tech earnings, a better than expected China PMI and strong German retail sales are doing little to offset the disappointment surrounding fiscal package 4 negotiations…the U.S. government will pay Sanofi and GlaxoSmithKline up to $2.1 billion to develop and deliver 100 million doses of their potential coronavirus vaccine…more than half of the $1.5 billion will be used to support further development of the vaccine, including clinical trials, with the remainder used for manufacturing and delivery of the 100 million doses, the companies said…the announcement comes less than 2 weeks after the government said it would pay Pfizer and BioNTech $1.95 billion to produce 100 million doses of their vaccine…experts are saying that a vaccine is not expected to be widely available to Americans until the middle of next year, phased in on a priority basis…California’s attack on the “rich”: Democrats in the California state legislature this week proposed to raise the highest state tax rate in the country even higher…with many tech companies now allowing executives to work remotely for the next year, top earners could more easily leave the state and work in places with no income tax, like Nevada and Texas…if the new tax is approved in August, it would be retroactive for this year and apply to income earned since January 2020“The tax hikes would be the tipping point for many taxpayers,” said Robert Gutierrez, President of the California Taxpayers Association, which advocates lower taxes, “prompting them to book a 1-way trip to 1 of the 49 states with lower taxes”

2. Stringent lockdowns weighed heavily on Europe’s economy in the 2nd quarter, causing a record decline that was even more severe than in the U.S., but the continent’s strategy of containment coupled with aggressive stimulus is fanning hopes of a robust recovery…the euro zone’s GDP fell 40.3% annually in the 3 months through June, exceeding the U.S. economy’s 32.9% contraction, according to data published this morning…however, recent statistics suggest Europe is having a much bigger snapback and there are some indicators that it may be getting ahead of the United States…the U.S. economy is being supported by a massive stimulus that will likely translate into a 2020 government budget deficit roughly twice as large as Europe’s…while the U.S. grapples with tens of thousands of new infections each day, Europe has largely brought the virus under control, even as it has eased restrictions and reopened internal borders, notwithstanding a spike in cases in countries such as France and Spain…

3. The largest U.S. technology companies are thriving in a pandemic that has increased dependence on their products and services, while hammering other parts of the economy…quarterly results from Apple, Amazon, Facebook and Alphabet after the bell yesterday showed the industry is capitalizing on the crisis as locked-down consumers use tech gadgets and the Internet for entertainment, social connection, shopping, learning and work…together, the 4 companies reported revenue of $206 billion (U.S.) and net income of $29 billion in the 3 months ending in late June…the 4 companies’ results hit a day after their leaders faced congressional hearings into whether they have broken antitrust rules and need to be reined in…“We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity for businesses, large and small, and certainly for families,” stated Apple CEO Tim Cook on a conference call…“We do not have a zero-sum approach to prosperity, and especially in times like this, we are focused on growing the pie, making sure our success isn’t just our success”

4. Amazon, Facebook and Apple are only among the most recent examples of a notable trend: earnings much better than expected…with half of the S&P reporting, about 80% of companies have beaten the estimates, well above the historic norm of about 70%…more importantly, they are beating by much wider margins than usual…the average earnings beat has been 13.2% above the consensus, way above the historic norm of 3.3%, according to Refinitiv…that is the highest beat rate since 2010, when many companies surprised Wall Street coming out of the Great Recession…however, there does seem to be 2 economies in the U.S. right now: a digital economy that is accelerating, represented by megcap tech names and the hardware (semiconductors) and software (social media, cybersecurity, cloud computing) around them…and then there is the everyday economy – the “hands on” economy, including the service sector, travel and leisure, industrials and real estate…

5. The Dow has is flat through the first 30 minutes of trading while the tech-heavy NASDAQ has jumped by more than 100 pointsDow-component Chevron (CVX, NYSE) is off by more than 3% in early trading…the Oil giant reported an $8.3 billion loss in the 2nd quarter as the pandemic “significantly reduced demand”Quidel (QDL, NASDAQ) has reported total revenue for the 2nd quarter of $201.8 million versus $108.3 million for the same period a year ago…the 86% increase in sales from Q2 2019 was driven by growth in Rapid Immunoassay and Molecular Diagnostic Solutions product categories, the result of strong demand for the company’s newly launched Sofia® SARS Antigen and Lyra® SARS-CoV-2 tests…net income for the 2nd quarter was $67.7 million, or $1.55 per diluted share, as compared to a net income of $1.3 million, or 3 cents per diluted share, for the 2nd quarter of 2019“As a point-of-care diagnostics leader, we are proud to expand access to affordable testing, and provide answers to some of the most vulnerable,” stated President and CEO Douglas Bryant...Quidel is up more than $14 a share to $284.74, giving it a market capitalization of around $12 billion (U.S.)…In Toronto, the TSX has slipped 78 points despite strengths in Golds (Gold Index is up 5 points at 392) while the Venture has gained 12 points to 717…Canadian markets are closed Monday due to the civic holiday across much of the country…Sona Nanotech (SONA, CSE), which could become just the 3rd company to receive FDA approval for an antigen-based COVID-19 test as early as next week, has added 23 cents a share to $14.63…the global pandemic did not have a material impact on Eldorado Gold (ELD, TSX; EGO, NYSE) as the company reported strong earnings in the 2nd quarter, driven by higher production and rising Gold prices…Eldorado announced post-market yesterday that net earnings were $45.6 million (U.S.) or $0.27 per share, up from $12.2 million or 8 cents per share reported in the 2nd quarter of 2019“Our outstanding operational performance during the quarter positions us to continue to generate significant value for our stakeholders,” stated President and CEO George Burns…“Even while managing COVID-19, we achieved strong quarterly production while seeing lower all-in sustaining costs”…the higher Gold price and substantial production numbers helped Eldorado achieve free cash flow of $63.4 million (U.S.) for Q2, up more than 13-fold from $4.8 million during the same quarter last yearK92 Mining (KNT, TSX-V), up 14 cents at $6.03, has hit new highs this week after announcing a robust Kora Stage 3 expansion PEA…Kirkland Lake Gold (KL, TSX, NYSE) has released new high-grade results from surface and underground drilling at the prolific Fosterville mine in Victoria, Australia, including 7.4 m (7 m estimated true width) grading 976 g/t Au from infill drilling in the Swan Zone (higher than anticipated grades and visible Gold near the intersection of the Swan Fault and the Swan Splay structure)…

6. The first results from Alberta’s serology testing show that far more people in the province may have already been infected with COVID-19 than have been officially recorded…in an update to Albertans yesterday on COVID-19, chief medical officer of health Dr. Deena Hinshaw said new analysis from a serology study performed in the first week of June suggests that on May 20, almost 36,000 Albertans had been infected with COVID-19…if accurate, Hinshaw said, that would mean provincial swab testing would have identified about 17% of all COVID-19 cases in Alberta as of mid-May…“I know this number may sound low, but it’s actually very good,” Hinshaw said, citing a similar study in British Columbia that showed that province had identified 12.5% of all cases, and others elsewhere in the world where far fewer cases were identified…“This data is an indication that our current PCR testing program is highly effective and is identifying a higher percentage of positive cases than programs in other jursidictions”

7. The federal government-backed exposure notification smartphone app has launched, marking the beginning of a new frontier in the COVID-19 fight: alerting participating Canadians when they come in proximity to someone who has tested positive for the coronavirus…the app, called COVID Alert, will compile anonymized data and use reports from confirmed positive COVID-19 cases to notify Canadians when they’ve been in proximity to someone who has the virus…while the initial rollout is just underway in Ontario only, Canadians across the country are able, and are being encouraged, to download the app in anticipation of more provincial and territorial health authorities signing on to use the new software…talks are ongoing with other provinces to come on board in the coming days, including New Brunswick and British Columbia….COVID Alert uses Bluetooth technology to register when devices with the app may come into proximity with one another, and works in the background of users’ phones…as long as the Bluetooth function is on, users will be able to be notified…health authorities in Ontario will be the first to begin distributing unique codes to people who test positive for COVID-19…when that code is entered into the app, it will notify other users who may have come into close contact with that person in the previous 14 days and provide them with guidance on what they should do next…

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  1. TSF Halted!

    Comment by Dan1 — July 31, 2020 @ 11:32 am

  2. Their partner in the deal let the cat out of the bag, so they had to halt – TSF

    Comment by Dan1 — July 31, 2020 @ 1:39 pm

  3. Another COVID-19 play to put on your radar:
    WAVE.V – Waverley Pharma. $12.5M mkt cap, insiders hold 75% of the 54M float!!
    Developing COVID-19 treatment in partnership with University of Manitoba.
    Just got authorization for their oncology drugs in the EU, waiting for FDA authorization in the US. Global market for just one of their authorized drugs is over $2B USD.
    $1M in cash, $300K+ in quarterly revs, $83K away from breaking even. Never had to do a raise since IPO at .50, so no cheap paper to hold it down. Multi-bagger written all over it.

    Comment by AG — August 1, 2020 @ 9:23 am

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