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 $1,297 and $1,305 so far today…as of 7:00 am Pacific, bullion is up $8 an ounce at $1,304…the yellow metal got a lift when the New York regionâs manufacturing sector showed weakness in fresh numbers released this morning…the New York Federal Reserve said its Empire State manufacturing surveyâs general business conditions index dropped to a reading of 3.7 in March, down from Februaryâs reading of 8.8…consensus forecasts were calling for a rise to 10.1…according to the report, this is the 3rd consecutive month the index has remained below 10, “suggesting that growth has remained quite a bit slower so far this year than it was for most of 2018“…Silver has jumped 16 cents to $15.31…Copper is up 2 pennies to $2.93…Nickel is 5 cents higher at 5.86 while Zinc is down a penny at $1.29…a nationwide power failure in crisis-stricken Venezuela could trigger “serious disruption” to the Oil market, the International Energy Agency (IEA) warned today, but OPEC kingpin Saudi Arabia should have the means to offset any further production woes in Caracas…the IEA report comes at a time when Venezuela, home to the worldâs biggest Oil reserves, is in the midst of the Western Hemisphereâs worst humanitarian crisis in recent memory…thanks to socialism, Venezuela has gone from being the richest country in South America to an economic basket case…bad government policies continue to plague Canada’s Oil sector…Imperial Oil (IMO, TSX, NYSE) has just announced that it has slowed the development of a $2.6 billion Oilsands project because of uncertainty due to the Alberta governmentâs Oil production curtailment program and other challenges…first production from the Aspen in-situ project had been expected in 2022 but will now likely be delayed by at least 1 year, Imperial has confirmed…some profit-taking in WTI this morning which is down 48 cents at $58.13 after a strong week…the U.S. Dollar Index is off more than one-tenth of a point at 96.57…
2. The worldâs appetite for Oil and gasoline is growing faster than many forecasters expected, meaning Crude prices will continue to push higher according to Goldman Sachs…the investment bank says Oil demand grew by 1.55 million barrels per day in January alone, a strong result despite a tough comparison with high consumption last year…for the 1st quarter, Goldman expects global Oil demand to grow by nearly 2 million bpd, trouncing its earlier forecast for 1.1 million bpd and driven by consumption in emerging markets…it will also keep growth for the full year on pace for Goldmanâs target of 1.45 million bpd, making the bank more bullish than most forecasters…âWe continue to believe that ongoing macro and Oil demand concerns are overdone,â Goldman analysts said in a research note yesterday…the strong demand will likely push Brent Crude, the international benchmark for Oil prices, above $70 per barrel…the rally has already outstripped Goldman’s prior view that Brent would peak at $67.50 in the 2nd quarter…Brent hit a 2019 high above $68 yesterday and is trading around $66.52 this morning…
3. The precious metals space will soon be reawakened by Palladiumâs rally, with Gold, Silver, and Platinum prices heading higher, according to Mike McGlone, respected senior commodity strategist for Bloomberg Intelligence (BI)…âThe precious metals market is about to resume a rally, in our view, on the back of a surge in the Palladium price.  For the first time in 5 years, the Bloomberg Precious Metals Spot Subindex is poking above its 72-month average.  It may be a better bullish broad-market indication if the recent visit above $1,500 an ounce in Palladium marks a peak”…a pattern in which the precious metals follow Palladiumâs lead has already been established, McGlone pointed out…âPlatinum, Silver and Gold embarked on decade-long rallies shortly after a similar parabolic Palladium rally and peak in 2001,â he pointed out…âHistory is likely to repeat, as we see it. The precious metals index is just recovering from the halfway point of that rally, with Platinum the most unloved, similar to 1999. The Platinum discount to Palladium appears to be unsustainable.  Platinum and Silver have the most upside potential, with the former looking ready to test the resistance level of $1,500 an ounce.  That level is the recent record high in Palladium, but only the halfway mark of the 2008-09 bear market for Platinum.  At the bottom of that range now, with the Palladium-to-Platinum ratio extending the 2001 peak, we think Platinum is ready to take the bull market baton,â McGlone concluded…
4. The Dow is off 17 points through the first 30 minutes of trading…in Toronto, the TSX is getting some help from Gold stocks and is up 62 points…Continental Gold (CNL, TSX) was halted pre-market and then announced that it has obtained a $175 million (U.S.) financing package consisting of (a) $75 million of unsecured convertible debentures being issued to certain investors, including a $50 million debenture from Newmont Mining (NEM, NYSE), and (b) a $100 million Gold and Silver stream from a company based in Bermuda…Continental is proceeding toward construction, commissioning and start-up of its Buritica Project in Antioquia, Colombia…the Venture, still trying to overcome resistance in the low 620’s, has added 3 points to 626…on the CSE, Miramont Resources (MONT, CSE) has hit a new high of 59 cents in early trading…Miramont could be on the verge of an important new discovery at its flagship property in Peru…drilling at Cerro Hermosa commenced in January and an update is expected soon…this is a well-financed company (powerful backers) with solid management that’s determined to push the story out to investors…interestingly, especially considering the rather prolific regional trend, Cerro Hermosa has hardly been touched historically, a fact that drew considerable curiosity from Dr. Quinton Hennigh (Miramont Chairman) when he first looked at the project…however, Dr. Hennigh quickly came to the conclusion that Cerro Hermosa was a stellar overlooked opportunity…combined with local infrastructure and community support, Cerro Hermosa “ticked all the boxes”, according to Dr. Hennigh…just recently, in a clear indication that drilling has been going well, Miramont signed an option agreement to acquire the An An concession immediately adjacent to Cerro Hermosa…the company has now consolidated a total of 1,886 hectares at the project with the addition of this 568-hectare concession…
5. Tesla (TSLA, NASDAQ) has just introduced its latest electric vehicle, the Model Y, a crossover SUV that will cost from $39,000 to $60,000 depending on configuration…some Wall Street analysts were underwhelmed by the vehicle, however, and Tesla stock is down about 5% on the news in early trading…the Model Y is about 10% bigger than the Model 3, seats 7, features a panoramic glass roof and 66 cubic feet of cargo space, Tesla CEO Elon Musk said, showing off a a Model Y prototype at the Tesla Design Canter in Hawthorne, California last night…the company plans to produce 4 different versions of the new SUV…according to Musk, the Model Y will share about 75% of its components with the companyâs Model 3 electric sedans, allowing Tesla to start manufacturing the new SUV for far less money that it spent to begin producing the Model 3…
6. Lightspeed POS (LSPD, TSX) has been a big market success in the early going which bodes well for other tech IPOs this year in Canada…the stock opened at $18.10 last Friday and is trading just below $23 this morning…the company has closed its initial public offering of 17.25 million subordinate voting shares at a price of $16 per share for total gross proceeds of $276 million, which includes the exercise in full by the underwriters of their over-allotment option…headquartered in Montreal, Lightspeed provides an easy-to-use, omni-channel commerce-enabling platform…the company’s software platform provides its customers with the critical functionalities they need to engage with consumers, manage their operations, accept payments and grow their business…Lightspeed operates globally in approximately 100 countries, empowering single and multi-location small-and-medium-sized businesses to compete successfully in an omni-channel market environment by engaging with consumers across on-line, mobile, social and physical channels…founded in 2005, the company has grown to approximately 700 employees, with global offices in Canada, the United States, Europe and Australia…
7. There was a ton of excitement over the 56,000 Canadian jobs run-up in February, but the closer you examine the data, the less impressive it becomes as pointed out by David Rosenberg, chief economist and strategist at Gluskin Sheff + Associates…all the employment in this country is coming out of 2 sectors – government and high-tech…disturbingly, goods-producing employment has declined 23,000 year-to-date and is little higher today than it was in November 2017…and that 56,000 headline number actually becomes a 131,000 decline once the 0.7% shrinkage in hours worked is taken into account…in fact, this was the 3rd straight decline in the hours worked in a row and, over this time, the workweek has dropped at a 4.2% annual rate, something we have not seen happen since May 2009…
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Comment by LarryC — March 15, 2019 @ 10:35 am
Hi BMR, there was a very large sell order on CCW today, more than 300k of shares. This is some serious money. Any comments? If everything is well, who is selling in a such a way?!
Comment by Lady — March 15, 2019 @ 3:21 pm
The 20-cent warrants from 2017 expired today, Lady – refer to our post early this morning…the last gasp of those warrants has impacted the market this first half of March…
Comment by Jon - BMR — March 15, 2019 @ 4:34 pm
Question by LADY is of interest to me as I bought at a higher than current price. Realize product price has gone south but are we still positive?
Comment by Carl — March 16, 2019 @ 8:31 am
You know what, Carl, I had this conversation with a subscriber yesterday: First off, one of the biggest mistakes investors make is that they assume that just because a company’s stock price is going up, that everything is ok and the fundamentals must be getting better (that’s not always the case). Likewise, the reverse is true. Sometimes a company’s stock price will decline while the fundamentals are actually improving. You can make a lot of money in the market if you can identify those anomalies. I’ll give you a classic example that pertains to the Northern Ontario Cobalt Camp – First Cobalt kept going up in price into early 2018 but we were advising caution because the fundamentals were not improving based on a variety of metrics. Would have been a low-risk short. Not surprisingly, the stock plunged 90% from its highs. CCW has trailed off, in a normal technical pullback, but the fundamentals have actually been getting better based on a wide range of factors. At the end of the day, the fundamentals will always win out. The last gasp of these 20-cent warrants brought in enough extra supply to largely account for the recent drop (other factors are short-term TA related).
Experience shows, just like in 2017 and 2018 with CCW, when everyone is whining and complaining and scared because of a drop in the share price, that’s exactly when they should have had the opposite reaction. That’s the fear/greed part of this business, emotional trading that causes people to sell when they should buy, and buy when they should sell…you need to be able to “read the play” like Gretzky and know where the puck is headed, not just where the puck is at any given moment…
Comment by Jon - BMR — March 16, 2019 @ 8:54 am
Jon, I agree the fundamentals usually win out. Canada Cobalt also has some .30 cent warrants coming due in June and July but great news and volume could fix that.
Comment by Danny — March 16, 2019 @ 12:13 pm
Thank you for that.
Comment by Carl — March 16, 2019 @ 12:44 pm