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Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information.
1. Gold is on track for its biggest weekly gain in nearly 2 years, snapping 2 straight weeks of losses that pulled it back from last month’s 1.5-year peak...as of 7:00 am Pacific, bullion is unchanged at $1,353…Silver is off slightly at $16.72…base metals have enjoyed a powerful week but are mixed this morning…Copper has edged up a penny to $3.22, Nickel has retreated 9 cents to $6.27 while Zinc is steady at $1.62…Cobalt prices have crossed the $37 barrier, up 23 cents to $37.19 and another new decade high…Crude Oil is off 19 cents at $61.15 while the U.S. Dollar Index has rallied one-third of a point to 88.94 after touching a 3-year low around 88.30 this morning…we’ll see next week if this morning’s action in the greenback turns out to be an important short-term reversal…
2. Keep in mind that stock markets in both the U.S. and Canada are closed Monday due to respective holidays (President’s Day in the U.S. and Family Day in Ontario and other parts of Canada)…global stocks continued to climb today, rebounding from an early February rout and putting many major benchmarks on track for their best weekly showing since early December 2011…the S&P 500, the Dow and the NASDAQ all had the best 5-day trading period since December 2011 through yesterday, recovering roughly 6%-7% from their trough last week…investors have largely brushed aside the inflation jitters and record bets on low volatility that triggered a sudden correction in many equity markets at the beginning of the month…this week’s gains have come despite a continued climb in government bond yields and a stronger than expected reading on consumer price inflation in the United States…yields on 10-year U.S. Treasurys rose to their highest since January 2014 this week and were as high as 2.91% this morning before easing off…equity markets seem to be getting more comfortable with higher yields, accepting the fact that there is slowly building inflation in the system…
3. U.S. consumer sentiment jumped much more than expected in February, exceeding the record-high average in 2017…the University of Michigan’s mid-month report on consumer attitudes climbed to 99.9 in February, its 2nd-highest level since 2004…Reuters‘ economists expected the reading to only reach 95.5…the 96.8 average for all of 2017 is the highest yearly average since 2000…the index measures 500 consumers’ attitudes on future economic prospects, in areas such as personal finances, inflation, unemployment, government policies and interest rates…
4. Economic problems in Venezuela – another great example of how socialism is such a disaster – have benefited OPEC’s goal of limiting production…potential U.S. sanctions against Caracas and its Oil industry may further hamper Venezuela’s output as the country continues to lose market share…a founding member of the Oil cartel, Venezuela pumped only 1.64 million barrels a day last month, well below its 1.97 million barrel a day allocation, according to estimates by S&P Global Platts…
5. U.S. equity markets are gunning for their 6th straight day of gains…the Dow is off 6 points through the first 30 minutes of trading...technology stocks on the S&P 500 have rebounded by 8.7% since February 8 (through yesterday), compared with a 4.3% rise in the utility sector, suggesting that investors are shifting away from safe-haven areas and back into comparatively risky plays…in Toronto, the TSX has gained 24 points while the Venture has slid 3 points to 831 in relatively quiet trading ahead of the long weekend for many Canadians…
6. The government of Manitoba has chosen National Access Cannabis (NAC, TSX-V) as one of 4 recipients of licenses to operate privately owned retail cannabis stores in the province, conditional upon several factors…it was a competitive process that saw more than 100 groups apply…under the terms of the retail organization agreement with the Manitoba government, NAC will be permitted to build, develop and operate in approved municipalities in the province…the number of locations remains subject to ongoing discussions with government officials…Mark Goliger, CEO of National Access, stated: “With our history in successfully operating nationwide medical cannabis clinics, strong First Nations and Licensed Producer relationships, combined with our deep knowledge of safety, security and harm reduction, NAC is perfectly suited to exceed Manitoba’s current and future cannabis retail regulatory requirements. With the province’s decision today, Manitobans will have responsible, secure access to recreational marijuana once legalization occurs.” Unlike Quebec, which announced supply agreements totaling 62,000 kilograms earlier this week, the Manitoba government will not be directly involved in the wholesale of cannabis…instead, National Access and the other 3 licensed groups (Tokyo Smoke, B.O.B. Headquarters and an unnamed consortium) will manage supply within a controlled private retail system…NAC gapped up to $1.19 at the open and is is up 10 cents at $1.11 through the first 30 minutes of trading…
7. Wise words regarding the state of the Canadian energy sector from former Saskatchewan Premier Brad Wall in an interview with Postmedia: “We have to decide, are we proud or ashamed to have a world-class energy resource? It has paid a lot of bills in this country, transfer payments and a lot of jobs, because right now it looks like most of the country is ashamed of it. It’s a source of shame for the federal government, for ministers of the federal government who will talk about the economy and environment living together, but every single policy decision and even a lack of action on Trans Mountain lately indicates they’d just prefer this industry not exist here. We’re at a crossroads…if you look at the cumulative effect of everything the federal government has done, we’re in the middle of NEP 2.0.”
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Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information.
1. After enjoying its best trading day since June 24, 2016, when financial markets were shocked by the Brexit vote, Gold remains firm this morning and climbed as high as $1,357…as of 7:00 am Pacific, bullion is up $3 an ounce at $1,353…Silver is flat at $16.85…Copper, on track for its biggest weekly gain since November 2016 thanks to strong Chinese demand, supply tightness and investment, is off slightly at $3.20…Nickel is up another 3 pennies at $6.39 after yesterday’s big run brought it closer to a 3-year high…Zinc has retreated 2 cents to $1.61 while Cobalt is unchanged at $36.97…Crude Oil is down 25 cents at $60.35 while the struggling U.S. Dollar Index has slipped one-tenth of a point to 88.73…another example of an improving global economy which will lend support to commodities – Japan has recorded its 8th straight quarter of growth, the longest streak since its heyday in the late 1980‘s, and economists generally expect modest expansion to continue into next year…the 1.6% growth rate for 2017 was the fastest pace in 7 years…
2. Retail and institutional investors in Gold-backed exchange traded funds (ETFs) have kept faith in the metal…ETF vaults last week held some 2,250 tonnes or 72 million troy ounces, levels last seen in May 2013, as investors pile into the commodity at a time of U.S. dollar weakness and heightened volatility in the broader financial markets…filings with U.S. market regulators revealed yesterday that Bridgewater Associates, the world’s biggest hedge fund, has raised its stake in SPDR Gold Shares and iShares Gold Trust, the world’s two largest physically-backed Gold ETF’s, during the last quarter…Bridgewater Founder Ray Dalio is advising investors to keep 5% to 10% of their portfolio in Gold as the risk of a U.S. recession within the next couple of years rises…
3. Crude prices rebounded strongly yesterday after a more than 12% fall over the past 2 weeks, a move driven by chart factors and U.S. shale production increasing at faster than expected rates…Saudi Arabia’s energy minister, Khalid al-Falih, felt the need to speak up yesterday as he made some bullish remarks including a comment that OPEC was committed to maintaining cubs on Crude production through the end of this year…that’s music to the ears of North American shale producers…
4. A slew of economic data out of the U.S. this morning was highlighted by producer prices which were in line with expectations, rising 0.4% last month (healthcare and gasoline were the main culprits) after being unchanged in December…in the 12 months through January, the PPI increased 2.7%…with Oil prices at very modest levels, the near/short-term inflation scare seems to be over-hyped…the Federal Reserve’s preferred inflation measure, the Commerce Department’s personal-consumption expenditures price index, has undershot the central bank’s 2% target for annual inflation in 66 of the past 68 months…the next reading will be released March 1…
5. U.S. equity markets are gunning for their 5th straight day of gains…as of 7:00 am Pacific, the Dow is up 209 points…volatility has certainly come back with a vengeance recently, following a year of unprecedented calm in the market…in its previous 9 sessions, the S&P 500 has had 7 moves greater than 1%…the broad index posted just 8 of those moves during all of 2017…in Toronto, the TSX is up 68 points through the first 30 minutes of trading…frigid temperatures helped drive up 4th-quarter profit by 12% at Canadian Tire (CTC, TSX) as the retailer of winter gear, sporting goods and tires saw strong sales in all of its retail banners…Canadian Tire has been a great-performing stock over the long-term…Goldcorp (G, TSX) reported earnings late yesterday that more than doubled in the 4th quarter from the same period a year ago, in line with expectations…the Gold producer listed a net profit of $242 million, or 28 cents per share, up from $101 million, or 12 cents, in Q4 2016…the Venture is up 1 point at 837 as of 7:00 am Pacific…the Index does face some minor resistance in the 830’s but the primary trend points to a strong finish to February after a very shaky start to the month…Kootenay Silver (KTN, TSX-V), which may have finally bottomed in the high teens, has started its 2018 drill program at its 100%-owned La Cigarra Silver Project in Chihuahua, Mexico…
6. Canopy Growth (WEED, TSX) strengthened its lead in the cannabis market in the 3rd quarter with revenue at nearly twice that of its nearest competitor, Aurora Cannabis (ACB, TSX)…WEED’s success came from a brisk increase in patient numbers, more sales of oils and extract products, and increased shipments into Germany…Chairman and CEO Bruce Linton stated, “Success in future global medical markets and the recreational cannabis market in Canada will depend not only on capacity, but on strong execution and securing supply agreements with the provinces today. I believe our success on both these fronts is evident as you look at our accomplishments this past quarter.”
7. Bitcoin is bouncing back…the cryptocurrency has surged over 10% the last 24 hours, almost hitting the psychologically important $10,000 price this morning…Ethereum, Ripple, Bitcoin Cash, Ethereum and all the other top cryptocurrencies are also up…the rise comes in spite of incendiary comments from U.S. billionaire Charles Munger, who ripped into the “asinine” Bitcoin yesterday and called for the government to take urgent action to regulate it. “I never considered for one second having anything to do with it. I detested it the moment it was raised. It’s just disgusting. Bitcoin is noxious poison.”
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Check back later today for Daniel’s Den and visit the BMR comments section throughout the day for updates and helpful information.
1. Gold has traded between $1,317 and $1,336 so far today…as of 7:00 am Pacific, bullion has rebounded to $1,329, gaining momentum as traders digest a higher-than-expected CPI number from the U.S. this morning…Silver is off 7 cents at $16.48…Copper, Nickel and Zinc are all up again, trading at $3.16, $6.17 and $1.61, respectively…Cobalt is steady at a decade high of $36.97…falling Crude Oil prices should temper Wall Street’s inflation fears…WTI is off another 76 cents at $58.53 while the U.S. Dollar Index has fallen another one-quarter of a point to 89.43, helping the Gold market…
2. Fresh economic data tripped up the equity markets at the open this morning…U.S. consumer prices rose more than expected in January, a further sign in some investors’ eyes that inflation could be firming after a long slumber…the Consumer Price Index, which measures what Americans pay for everything from salad dressing to fares on public transportation, jumped 0.5% in January after rising a seasonally adjusted 0.2% in December, the Labor Department reported…excluding the volatile food and energy categories, so-called core prices were up 0.3% compared to 0.2% in December…economists surveyed by The Wall Street Journal expected consumer prices to climb 0.4% in January, and core prices to increase 0.2%…in the 12 months to January, overall prices rose 2.1%, matching the same annual increase as in December…today’s report, however, also showed that wage inflation – a recent concern of the markets – is actually broadly muted…real average weekly earnings fell a seasonally adjusted 0.8% in January and were up just 0.4% from January 2017…meanwhile, U.S. retail sales unexpectedly fell in January, recording their biggest drop in nearly a year, as households cut back on purchases of motor vehicles and building materials…
3. U.S. shale companies are churning out Crude Oil at a record pace that could overwhelm global demand and reverse the Oil market’s fragile recovery, a top energy market observer has noted…the Paris-based International Energy Agency has concluded in its closely watched monthly report that U.S. shale production is growing faster in 2018 than it did even during the boom years of $100 a barrel Oil prices from 2011 to 2014…the difference this time is that Oil prices are about 40% lower…the situation is “reminiscent of the first wave of U.S. shale growth”, the IEA stated, when a flood of American Oil built up a global glut and sent prices crashing over 4 years ago…the IEA advises governments and corporations on energy trends…
4. The TSX divergence between falling share prices and robust earnings estimates continues to perplex many investors…while Canadian earnings season is still in its early days, analysts are expecting 19% EPS growth year-over-year…since the summer of 2014, the S&P/TSX Composite Index is roughly flat while corporate earnings have actually grown by nearly 30% over that time…initial results from 4th-quarter earnings season in Canada show nearly two-thirds of companies outperforming forecasts…reporting this week are Brookfield Asset, Sun Life, Enbridge, TransCanada, EnCana and Cenovus…
5. U.S. stocks opened lower this morning after 3 straight days of gains…as of 7:00 am Pacific, the Dow is off 104 points…in Toronto, the TSX has slipped 37 points while the Venture is up 4 points at 825…nearest resistance for the Venture is in the low 830’s but the trend points to a strong finish to the month for the Index after its worst-ever start to February…National Action Cannabis (NAC, TSX-V) has eased off in early trading to what should be new support around $1.09 after hitting a fresh high of $1.20 yesterday…iMetal Resources (IMR, TSX-V) has found more high-grade Gold and Copper in surface sampling at its Gowganda West Property adjoining Tahoe Resources‘ (THO, TSX) 4-million ounce Juby deposit in northern Ontario…the focus of attention is on an area (Zones 3A and 3B) several km south of the Tahoe resource where mineralized outcrop featuring chalcopyrite and pyrite quartz veins and quartz stringers has been found over a broad area previously unexplored as it was hidden by layers of moss and vegetation…assays from the latest sampling returned values as high at 34.4 g/t Au and 2.6% Copper…targets continue to be defined for an upcoming drill program…the innovative Canadian Securities Exchange (CSE) says it’s exploring a new platform powered by blockchain that, in theory, will clear and settle stock trades instantly…this function is currently carried out by an arm of TMX Group and takes place 2 business days after a trade is executed…however, the technology behind blockchain – the digital ledger – could upend the way that buying and selling securities are finalized while driving certain costs out of the system…
6. Quebec has signed sizeable cannabis supply agreements with a number of licensed producers, becoming the first large province to line up supply ahead of recreational legalization…Gatineau-based The Hydropothecary Corp. (THCX, TSX-V) has secured the largest agreement, signing a letter of intent to supply 20,000 kilograms of cannabis to the Société des alcools du Québec – the government-run agency which will have a monopoly on recreational sales online and in retail stores – in the first year of recreational use…the company says it’s on track to complete previously announced facility expansions increasing annual production capacity to 108,000 kg of dried cannabis, making it one of Canada’s largest producers…both Canopy Growth (WEED, TSX) and Aphria (APH, TSX) have also signed letters of intent with Quebec’s cannabis agency…
7. Canopy Growth (WEED, TSX) is up in early trading after announcing that it has more than doubled its 3rd-quarter revenue compared with a year ago…the company says revenue totaled $21.7 million for the quarter ended December 31, up from $9.8 million in the last 3 months of 2016…Canopy says it sold 2,330 kilograms and kilogram equivalents of marijuana in the quarter at an average price of $8.30 per gram…that compared with 1,245 kilograms at $7.36 per gram a year earlier…year to date, the company has sold 6,198 kilograms and kilogram equivalents at an average price of $8.11 per gram compared with 3,399 kilograms at an average price of $7.12 per gram in the 9 months ended Dec. 31, 2016, representing an increase of 82% and 14%, respectively…Chairman and CEO Bruce Linton says Q3results were driven by driven by a significant increase in domestic sales as well as sales in the German medical market. “Success in future global medical markets and the recreational cannabis market in Canada will depend not only on capacity, but on strong execution and securing supply agreements with the provinces today. I believe our success on both these fronts is evident as you look at our accomplishments this past quarter,” Linton stated…
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Visit the BMR comments section throughout the day for updates and helpful information.
1. Gold has traded between $1,324 and $1,332 so far today…as of 7:00 am Pacific, bullion is up $2 an ounce at $1,325…reality is setting in that the U.S. government is now facing the prospect of trillion dollar annual deficits as far as the eye can see, and that should lend further support to bullion at $1,300…Silver is relatively unchanged at $16.54…Copper and Nickel are both pushing higher on the heels of President Trump’s $1.5 trillion infrastructure plan revealed yesterday…Copper is up 8 cents at $3.15 while Nickel has surged 14 cents to $6.03…Zinc is up 3 pennies at $1.59 while Cobalt continues to trade at a decade high of $36.97…Crude Oil has slipped 69 cents a barrel to $58.60 while the U.S. Dollar Index has plunged nearly half a point to 89.69…
2. U.S. government debt yields slipped this morning as investors prepare for key inflation reports…the Labor Department is set to release its monthly Consumer Price Index (CPI) data tomorrow…that report, along with the Producer Price Index (PPI) on Thursday, will be scrutinized by both traders and Federal Reserve officials for any signs of price movement in the economy…
3. The recent stock market correction and jump in volatility will not impact the economy’s overall strong prospects, Cleveland Federal Reserve President Loretta Mester emphasized this morning at a Chamber of Commerce event in Dayton, Ohio…she warned against any overreaction to the turbulence in financial markets, and added that inflation should pick up this year but not at a rate that requires a faster Fed reaction. “I expect the economy will work through this episode of market turbulence and I have not changed my outlook. In my view, the underlying fundamentals supporting the economy are very sound,” Mester stated…
4. Talk is cheap, but Canadian Natural Resources Minister Jim Carr says Ottawa will not entertain any attempts by British Columbia to stall or stop the expansion of Kinder Morgan’s Trans Mountain pipeline. “If that is the goal of any province, we will take the necessary action to ensure that federally approved resource projects proceed,” Carr stated…it’s a fair question to ask, why only now are the feds supposedly talking common sense to the B.C. government when the Green Monster made it clear months ago, upon stealing the reigns of power in the province, that it will “employ every tool available…to stop the expansion of the Kinder Morgan pipeline” (exact wording of the signed power-sharing agreement between the NDP and the Green Party)…the federal government has a great sense of urgency when it comes to legalizing marijuana and getting pot to market, but that same sense of urgency has not been applied to getting landlocked Canadian Oil to overseas markets…all of Canada is getting hurt as a result…Alberta Premier Rachel Notley says the feds have just “days” to make progress on this file or Alberta will take additional action beyond last week’s ban on B.C. wine imports (how effective that ban will actually be is questionable, but at least it got the feds’ attention)…international investors are watching closely to see if the federal government has the guts and wisdom to enforce its powers and overcome the multitude of far left green globalist activists who are leading a “War on Oil” in this country…
5. U.S. stocks have pulled back modestly in early trading after posting their best 2-day advance since the last unnecessary panic which was Brexit…the Dow has retreated 139 points as of 7:00 am Pacific…in Toronto, the TSX has slipped 67 points while the Venture is off 1 point at 823…Probe Metals (PRB, TSX-V) continues to deliver strong results from its Val d’Or East Project in northwest Quebec, setting the stage for a significantly higher valuation once Gold stocks in general finally start to gain traction…results from an additional 24 drill holes totaling over 12,000 m at Val d’Or East show expansion of all 4 Gold zones…an updated resource estimate, incorporating new drill results from the 2016 and 2017 programs, is expected shortly…mineralization at the New Beliveau deposit has been delineated over an expanded area of more than 1 km by 500 m and to a depth of over 900 m…
6. An updated mineral resource estimate for Seabridge Gold’s (SEA, TSX) Iron Cap deposit in the Eskay Camp has increased both its size and grade including a tripling of Inferred resources to 1.3 billion tonnes @ 0.48 g/t Au, 0.30% Cu and 2.9 g/t Ag (20 million ounces of Gold and 8.6 million pounds of Copper)…Indicated resources are up nearly 7% in tonnage (though down in Gold grade) to 347 million tonnes @ 0.43 g/t Au, 0.23% Cu and 4.2 g/t Ag (in total, more than 14 million net ounces of Gold have been added to overall resources)…Iron Cap is one of 4 large Gold/Copper porphyry deposits within Seabridge’s 100%-owned KSM Project…the updated resource estimate incorporates all previous drilling plus 10,400 m of diamond core drilling completed in 11 holes drilled in 2017, all of which returned wide zones of significant grade…Seabridge Chairman and CEO Rudi Fronk stated, “All our objectives at Iron Cap were more than accomplished last year. A larger, richer Iron Cap deposit is expected to take a more prominent place in our mine planning. We believe Iron Cap has the potential to make a strong contribution to improving project economics thanks to its higher grade and its favorable capital and operating costs due to its location close to planned infrastructure. Although we think that a $16 NSR is the right cutoff in the current environment, we are pleased to see that substantial tonnages at much higher grades are also possible if required in the future. Furthermore, we think that the size and grade of this deposit can continue to grow with further drilling.”
7. Datametrex AI (DM, TSX-V) is out with more news again this morning after yesterday’s mid-morning announcement…the company says that through its Nexalogy AI subsidiary, it’ll be augmenting its service offering to the Fortune 1,000 to include an artificial intelligence product that focuses on key competitive analysis and stock market awareness, allowing public companies to gather intelligence and also target specific sector campaigns more effectively…yesterday, DM jumped on mid-morning news that it has entered into a definitive agreement (through its Graph Blockchain subsidiary) to develop a large-scale graph database and blockchain solution prototype in partnership with IBM for a Korean conglomerate advancing an electric power and utility project…the solution will assist in analyzing charging stations…the value of the prototype is approximately $400,000…the project will use all of Graph’s unique IP (intellectual property), which DM says provides a compelling way of organizing, analyzing and displaying blockchain transactional data in real time…the graph database technology being developed processes blockchain data up to 1,000 times faster than traditional methods from 7 transactions per second to 7,000 transactions per second…additionally, information can be displayed much faster and more effectively…it is believed to be one of the most effective technologies to store, manage and present blockchain transactions specifically in peer-to-peer networks and has shown unique advantages for this energy-related prototype solution…
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