Markets It was a bit of a mild week in equity markets last week. The DOW was down 0.2%, while Nasdaq was lower by 0.4% and the TSX was higher by 0.6%. Equity markets continue to struggle to find direction. |
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Commodities A stronger US dollar had many commodities on the defensive this past week. Gold was lower trading back below $2000 per ounce before closing just above that level by Friday’s close. |
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WTI Oil had its first significant pullback since OPEC+ announced production cuts actually, nearly wiping out all the gains since the announcement. It closed the week at $77.87. |
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Natural gas seems to have found a comfortable trading level just about $2.00 closing the week at $2.32. |
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According to Baker Hughes drill rig data, the US saw 5 more rigs in action while in Canada there was a drop of 6 rigs.
Lumber futures prices fell back below $400. |
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One of the more exotic commodities that was getting some investors excited earlier this year seems to have come back down to earth. Battery metal, lithium saw a very strong spike in prices starting in late 2021 on all the excitement around electric vehicles and battery demand. In recent weeks the price of lithium has dropped roughly 70% when measured in Chinese Yuan. |
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Financials The US dollar index has been holding steady around the 102 level with the Euro of late, being one of the stronger currencies. Signs of weakness in US economic data and some uncertainty over whether the Fed will raise rates are taking some strength away from the US greenback. |
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Most US treasury yields were slightly lower for the week. |
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Canadian 5-year bond yields dropped for the week after popping briefly back above 3.25% closing on Friday at 3.10%. |
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Stocks It’s encouraging to see that a few of the stocks in our universe are showing strength with a few hitting 52-week and in some cases multi-year highs. Data Communications Management (DCM.T) hit yet another new multi year high this past week. The stock continues to rip higher since its announcement that it is acquiring the Canadian division of RR Donelly. |
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KITS Eyecare (KITS.T) also hit a new 52 week high. |
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Recently profiled cannabis company Canadabis Capital (CANB.V) hit its 52-week and ii has now doubled in price since we included it in our Cheapies with a Chance 2023 list in January. |
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While most of the Canadian housing related companies have been holding steady or in some cases still struggling near year lows, US housing related stocks are taking turn hitting new highs. Last week Builders First (BLDR) broke out to new 52 week highs. This week it was DR Horton (DHI) and KB Homes (KBH). Better than expected financial results from some of country’s largest home builders has investors revisiting this sector. |
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You can see the whole sector measured by the home builder ETF (ITB) has broken out to new 52 week highs. |
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It continues to be my view that Canadian housing sector is even better set up for a housing/construction resurgence than what one can expect in the US. There are not too many options for investors to play the Canadian homebuilder sector so if we do see a change in Canadian investor sentiment it likely spills into a very limited supply of public investment options.
Other Stuff I was hoping to report on our visit to Total Telcom (TTZ.V) this past week but unfortunately I came down with something that prevented me from making the trip. We are trying to reschedule and will report back when we can.
To your wealth, Paul and Trevor |
