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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 $1,325 so far today…as of 7:00 am Pacific, bullion is up $6 an ounce at $1,322…the slide in Gold prices last week was accompanied by pronounced outflows from global exchange-traded funds, including 6.5 tonnes on Friday, according to Commerzbank…holdings in Gold ETFs tracked by Bloomberg decreased by more than 20 tonnes last week, reversing the lion’s share of the inflows seen since the start of the year…Silver has added 19 cents to $16.52…Copper and Nickel are both up slightly at $3.08 and $5.90, respectively…Cobalt is trading at a decade high of $36.97 while the U.S. Dollar Index has fallen one-fifth of a point to 90.14…Oil prices are trying to snap back, up 75 cents a barrel to $59.95, after WTI’s worst week in 2 years as concerns mounted over rising U.S. production…another 26 Oil rigs went to work in the U.S. last week, the biggest jump in a year…meanwhile, the U.S. Energy Information Administration raised its forecast for production this year to 10.6 million barrels a day…that’s up about 300,000 bpd from what it expected just a month ago and would best a 1970 record by about 1 million bpd…

2. OPEC said today that it expects demand for Oil to grow faster than it originally expected in 2018…that’s encouraging but the organization also sees supplies from beyond the producer group surging this year, driven by even stronger-than-expected U.S. output…a monthly report also showed OPEC’s production was little changed in January as the group continues to limit its output for a second year (Iraq appears to be an exception, though) in order to balance an oversupplied market…however, the 14-member cartel said it now sees non-OPEC production growing by 1.4 million barrels per day, up 250,000 bpd from its estimate in its last monthly report…it expects nations outside OPEC to pump a total of 59.26 million bpd in 2018, 320,000 bpd higher than its last forecast…the United States accounts for more than half of that upward revision…bottom line, ironically, is that the world is producing and consuming record amounts of Oil while various groups and governments in Canada engage in a domestic “War on Oil” to help “save the planet”…

3. Despite last week’s drop in Oil prices, which are certainly not at inflationary levels, the inflation “boogeyman” was a key factor in the biggest weekly slide in U.S. equity markets since January 2016…a key piece of economic data to be released on Wednesday – consumer prices – is expected to give a clearer indication on the pace of inflation and therefore the frequency of anticipated interest rate increases…FactSet analysts are looking for a 0.2% uptick in the Consumer Price Index, down slightly from last month’s 0.3% increase…

4. Valentine’s Day is Wednesday and, according to the National Retail Federation, U.S. consumers are expected to spend a near-record $19.6 billion on Valentine’s Day gifts, up from $18.6 billion last year…on average, consumers are planning to spend $143.56 on gifts as more than half the population (55%) celebrate what some have dubbed a “Hallmark Holiday”…the jewelry sector will receive the most significant chunk of Valentine’s Day gift-buying at $4.7 billion, building on a trend of increasing U.S. jewelry demand according to the World Gold Council (4th quarter demand was the strongest in 8 years)…consumers are expected to spend $3.7 billion on a romantic evening out, $2 billion on flowers, $1.8 billion on candy and $1.9 billion on clothing…

5. The Evolve Marijuana ETF (SEED, TSX) started trading on the TSX this morning as the marijuana sector continues to expand in the ETF market…SEED will invest in its own actively managed portfolio comprising companies listed domestically and globally with business activities in the recreational and/or medical marijuana industry…Evolve CEO Raj Lala said in a statement, “We believe the international cannabis industry is poised to exceed $30 billion by 2021, which would be a 60% compounded annual growth rate in the next few years. The next wave of growth could be driven by the globalization of the industry. Active management in SEED allows us to capitalize on these opportunities.”

6. Interesting fact – before this month, a drop of 10% from an all-time high in the Dow in less than 2 weeks hadn’t happened since 1928…a look at other, similar sudden market breaks throughout U.S. stock market history shows a relatively encouraging pattern of a fairly quick recovery…the Dow is building on Friday’s rebound with a gain of 253 points through the first 30 minutes of trading…roughly 79% of S&P 500 companies have reported Q4 revenue above analyst expectations so far this earnings season, compared with a long-run average of 60%, according to Thomson Reuters data…in Toronto, the TSX is enjoying a rare triple digit advance as it’s up 119 points as of 7:00 am Pacific…one only has to glance at the political landscape across Canada to understand why the TSX Composite is actually the worst-performing national index in the entire developed world over the past year, down 4% over the past 12 months…by contrast, the S&P 500 has jumped 14%…the main Canadian benchmark closed Friday below its 2008 peak just prior to the onset of the financial crisis…the Venture has added 7 points to 821 through the first 30 minutes of trading…the Ontario government has inked a deal to use Shopify Inc.’s e-commerce platform for cannabis sales online and in stores as part of its plan to be the province’s sole distributor of legal recreational marijuana…the Ontario Cannabis Retail Corporation (OCRC), a subsidiary of the Liquor Control Board of Ontario, will use the Ottawa-based company’s online store software for its online and mobile sales portal…

7. Following the unofficial news that Tesla is now in talks with the Chile-based Lithium mining firm SQM about securing long-term Lithium supplies, a BMW executive has now been quoted by Germany’s Frankfurter Allgemeine Zeitung as saying that a 10-year supply contract for Lithium and Cobalt for BMW was now close to being signed…BMW recently said it believes its needs for car-battery raw materials will grow 10-fold by 2025 and that it had been surprised by “just how quickly demand will accelerate”…BMW plans to offer 25 electrified vehicles by 2025 and, like many of its peers, prefers the use of Nickel-Magnesium-Cobalt batteries…the boom in electric cars could more than quadruple demand for Cobalt to more than 450,000 tonnes by 2030 from less than 100,000 tonnes last year, according to Bloomberg New Energy Finance…

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The Dow has just experienced one of its worst weeks since the financial crisis, but there’s a big glimmer of hope from a leading indicator…

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 $1,312 and $1,321 so far today…as of 7:00 am Pacific, bullion is off $5 an ounce at $1,314…Silver has slid 15 cents to $16.24…Copper is off 2 pennies at $3.08 while Nickel has retreated 9 cents to $5.85…Cobalt has hit a new decade high of $36.97 while the U.S. Dollar Index is up one-fifth of a point at 90.36…meanwhile, Oil prices are down for a 6th straight day and are on track for their biggest weekly loss in 10 months…Crude is currently off another 90 cents a barrel at $60.25…the pullback is due in part to an overdue technical correction and fresh concerns regarding record-high U.S. Crude output…U.S. production hit 10.25 million bpd for the most recent week…meanwhile, an outage on a key Oil pipeline in the North Sea proved short-lived and OPEC member Iran announced plans yesterday to increase production within the next 4 years by at least 700,000 barrels a day…a strong U.S. and global economy, however, will keep Oil demand buoyant…

2. Goldman Sachs remains upbeat on commodities despite recent softness that has occurred simultaneously with the correction in the broader U.S. equity markets:  “Ironically, the catalyst for the equity move was rising inflation concerns in the face of strong economic activity indicators, which further reinforces our view that commodity markets are set to outperform other asset classes once the current liquidation flows subside. As is the case for equities, we view this move as primarily positioning, technical and U.S. dollar driven, with the magnitude of the declines well correlated to both the strength of the prior price trend and the level of speculative length. Despite the sell-off, we find that recent fundamental data is still supportive of our constructive view on the asset class.”

3. The return of trillion-dollar U.S. budget deficits adds to the swamp in Washington instead of draining it:    President Trump signed a major budget plan into law today, ending the year’s second government shutdown just hours after it started…both chambers of Congress passed a short-term funding bill in the wee hours of the morning and cleared the way for a massive boost to military and domestic spending hours after funding lapsed at midnight…the House Freedom Caucus, the chamber’s fiscally conservative wing, said in a statement that “growing the size of government by 13%…is not what the American people sent us here to do.”  Republican Senator Rand Paul added, “I ran for office because I was very critical of President Obama’s trillion-dollar deficits.  Now we have Republicans hand in hand with Democrats offering us trillion-dollar deficits. I can’t in all honesty look the other way.”  In other to reverse the accelerating deficit trend, politicians will eventually be forced to address the thorny issue of entitlement programs which make up most of the federal government’s runaway spending…

4. The Canadian economy lost the most jobs in 9 years in January, solidifying expectations the Bank of Canada will hold interest rates steady next month…the 88,000 job decrease fell well short of economists’ forecasts for a gain of 10,000 and was the biggest decline since January 2009 when the economy was dealing with the global financial crisis, Statistics Canada reported today…the drop was driven by a whopping 137,000 decline in part-time work, the biggest on record and likely due in part to Ontario’s insane decision to hike the minimum wage by 20% January 1…average hourly wages in Canada jumped 3.3%, the strongest since March 2016, while the national unemployment rate rose to 5.9% from December’s revised 5.8%…

5.  In the 1980’s, Pierre Trudeau’s ill-advised National Energy Program inflicted economic havoc on Western Canada and led to a national unity crisis…today, Justin Trudeau’s radical climate change agenda is the New National Energy Program and more scary aspects of it were introduced yesterday in sweeping environmental and regulatory reforms of big resource projects…the devil is in the details, as the saying goes, and Mother Earth Minister Catherine McKenna laid out a mammoth 341-page document that the feds admit will cost at least $1 billion to implement once the bill is approved by Parliament…Canada, it appears, will become the only country in the world with national assessment legislation that requires the government to consider “sustainability” and climate change commitments (Paris agreement that the United States has withdrawn from) when deciding whether to approve a project or not…quite simply, the “reforms” reflect many of the environmental lobby’s priorities and even include a “gender-based analysis” that will also take place on every project…meanwhile, the feds’ proposed regulatory overhaul has immediately given more ammunition to B.C. Premier John Horgan in his government’s battle to illegally thwart the already approved Kinder Morgan Pipeline expansion.  “Does this say the processes that were in place yesterday were adequate?,” Horgan asked.  “Clearly, the federal government doesn’t think so.  Many British Columbians don’t think so.”

6. A damning indictment of how Canadian governments, federal and provincial, are eroding business/investor confidence through high taxation and over-regulation – the top executive at Canada’s largest integrated Oil company said in an earnings call yesterday that he would not embark on major new projects in the country because of burdensome regulations and uncompetitive tax rates…Suncor Energy (SU, TSX) President and CEO Steve Williams said his company would pare back spending in future years partly because Canada is not as competitive as other countries.  “We’re having to look at Canada quite hard. The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in,” Williams said…

7.  It’s not all doom and gloom this morning…the fact that the Venture, a reliable leading indicator, is actually steady this week while the Dow is experiencing its worst week since the financial crisis can only be construed as a positive sign that equity markets will behave much differently over the 2nd half of the month…fears about inflation and soaring bond yields sent the Dow plunging 6.5% through the first 4 days of this week…the S&P 500 has shed 6.6%, its second-worst week since 2008…both are rebounding in the first 30 minutes of trading this morning…however, our Dow chart suggests a test of the 23,000 area is necessary and that would mean a decline of as much as another 1,000 points or so with the Dow at 24,125 as of 7:00 am Pacific…the lack of a meaningful correction over the past couple of years has made this one seem more shocking than it really is…the TSX, still in deeply oversold conditions, is up 22 points while the Venture is off 1 point at 818 after closing last Friday at 812..cannabis companies that do business in the United States can keep listing, trading and clearing their shares in Canada…the Canadian Depository for Securities said yesterday that it’s not in its mandate to judge any of the companies that have been allowed to list shares on any of Canada’s stock exchanges…the news will be a boost to almost two dozen public firms that operate in the United States and are listed today on the Canadian Securities Exchange…

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