CHF WEEKLY ROUND-UP: June 10-14, 2024

Jolts of volatility hit the markets this week; bad news, good news, and too much news had investors running to safety and repositioning. With lower volumes in the summer expect the swings to continue. Buy the dips.

Canadian markets lost 2.4% this week, with all sectors being impacted. Much of the selling could be related to investors cashing out to realize capital gains before the increased tax rate comes into effect.  This results in people realizing capital gains in the 2024 tax year handing the government more tax revenue now than would have been the case otherwise. The Canadian dollar has been declining against the U.S. dollar all year. The Bank of Canada has said if inflation continues to ease it is reasonable to expect further cuts, but that it is taking it one decision at a time. Further rate cuts in Canada without the U.S. Fed cutting threatens to further crash the Canadian dollar, and import exchange rate inflation, as we already see at the gas pumps.

The core U.S. consumer inflation rate continues to show encouraging signs of cooling with May’s core consumer price index (CPI) up 3.4% year-over-year. That is the slowest pace of increase in three years. The numbers are an encouraging sign that inflation is being controlled. Wednesday, the Federal Open Market Committee warned markets to expect no more than one interest rate cut over the rest of this year. Market participants seem to be acting as if a July rate cut may be in the picture, with a pre-election cut in September, and a December cut depending on the election result driving the S&P 500, Dow, and NASDAQ all into record territory this week. The Fed now risks waiting too long to cut just as they waited too long to raise. The already too-strong U.S. dollar gained on the back of the prolonged rate hold and is up 0.56% this week and up 4.04% year to date. Europe’s election swung away from the parties in power towards populist and nationalist parties, as the people rejected many unpopular government policies. Some national leaders are in a difficult position and changes look to be coming. Equity markets across the Eurozone have gone softer, and the Euro is weaker against the USD. On Friday last week, there were reports that the Chinese central bank didn’t buy any gold in May, and bullion dropped by USD$89/oz. Gold has recovered to its support level of USD$2,330/oz this morning. Share prices of the top 50 Canadian gold issuers have been in the red. When the gold miners report their second-quarter earnings, they should show increased revenue and profits as they have been selling gold in the second quarter for around USD$300 or more than in the first quarter. Look for bargains. Silver has been under pressure for most of the last month and sits at USD$29.20/oz this morning. Copper has been trending down for the last month, to USD$4.37/lb. today. Other industrial metal prices are following the same downward path. Battery and Critical materials did not gain any ground. Lithium lost another USD$0.40/kg this week to USD$13.44/kg.  Speculation points to reduced buying from the largest global consumer, China, as large stockpiles have been built up at lower prices.  It is always a productive week for our clients, and we are pleased to present to you our round-up of their news released between June 10-14, 2024.

Mining On June 9, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) was mentioned in a video posted by noted mining commentator Allan Barry Laboucan on his “Rocks and Stocks News Show” where he discussed events in the gold market on last Friday and expressed his confidence that the commodity would recover to new highs. He also discussed many of his personal favourites in the sector, including Sokoman. Watch the Video HERE. Watch from the beginning or advance to timestamp 56:18 for his Sokoman comments.

Fintech On June 7, 2024, Tenet Fintech Group Inc. (CSE: PKK) (OTC Pink: PKKFF) published the Q&A interview conducted with Company CEO Johnson Joseph on the first quarter 2024 financial results filed on May 30, 2024. The interview is also available on the Tenet website.Listen to the Interview:  Tenet Q1-2024 Results Q&A.