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This September hasn’t really lived up to its bad reputation for the stock market. Now, the S&P 500, DJIA, NASDAQ, and the TSX are at or near record highs. The bull is still running.
Statistics Canada says real gross domestic product grew 0.2 percent in July, following essentially no change in June, helped by strength in the retail trade sector. The Bank of Canada (BOC) will likely continue cutting its key policy rate by 25 basis points (bp), as BOC must move from a plan on slowing the economy to trying to generate more growth and prevent recession. Experts expect economic growth to pick up next year and forecasts are that the BoC will cut its key interest rate below three percent by mid-2025.
The S&P/TSX Composite Index rallied to close at an all-time high of 24,033 points Thursday as China announced a stimulus plan that boosted shares in base metal providers. This was the index's 26th high-closing record so far in 2024, which has climbed 15% year to date, rebounding from a decline of more than 16% last year. Analysts suggest that Canada still trades at a massive valuation discount relative to the US.
The “U.S. economy expanded at a healthy 3 percent annual pace from April through June, boosted by strong consumer spending and business investment”, the Commerce Department reported on Thursday, suggesting that interest-rate-sensitive sectors like housing, manufacturing, auto sales, and retailing of other big-ticket consumer goods should pick up over the next year. Lower interest rates will fuel a recovery of job growth and likely stabilize the unemployment rate around its current level in 2025.
We are now clearly in the U.S. FED rate-cutting cycle, and we know that you "Don't Fight the FED”. The market has got on board with the initial 50 bp cut and expects more to come this year. Overnight, the Peoples Bank of China (PBoC) announced an economic stimulus package featuring lower rates, reserve requirements, funds for stock purchases, and financial support for buybacks. If China does well, the US does well. Chances of a “Soft Landing” are on the increase. U.S. Stocks are trying to make new highs as analysts are forecasting rising earnings growth, and they are expecting a year-end rally to over 5,800 on the S&P 500 index, which may be already underway. The S&P has made 41 new ATHs this year. China has rallied, up 12% in a couple of days. The new mantra is to buy China. The better risk-adjusted trade is to buy commodities and buy Canada.
Gold ran to USD$2,685/oz on Wednesday and opened at USD$2,670 this morning. While September is traditionally the weakest month for gold, it has risen over USD$150 this month and looks to continue growing through the end of the year to a target of USD$3,000/oz. Look for buying opportunities in gold and gold equities, especially the undervalued junior sector. Silver has gained USD$4.00/oz in the last 3 weeks and opens at $USD32.20/oz today, as it looks to catch up with gold as the preferred investment metal.
After China unveiled plans to stimulate its economy, which lifted base metals prices, including copper, and sparked an improvement in mining equities. Base metals are all down through the first week of September and are reacting positively to China’s actions. The U.S. Dollar remains at its weakest this year providing additional support. Copper is near USD$4.60/lb. today. Nickel has been climbing for 3 weeks, near $USD$7.63/lb this morning. Other metals are following the same trend. Uranium moved up sharply this week up to USD$80.75.
Fears of a China slowdown also continue to impact Battery and Critical material markets. Lithium started to move up in the last 2 weeks and while still very low, at USD$10.40/kg, the price trend is positive. Cobalt is still at USD$11.00 is near a 10-year low. China’s economic stimulus is, in part, intended to maintain its dominance in EV and critical metals. Positive actions are being seen on developing the U.S. and Canadian supply chains and ensuring domestic security. The future is still electric, and it will take longer to arrive. However, it is time to look to Western supply chain players for growth opportunities.
It has been a productive week for our clients, and we are pleased to present our round-up of their news released between September 23-27, 2024.
Mining
On September 26, 2024, Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) provided the following updates from the 100%-owned Moosehead Gold Project in central Newfoundland.
The current focus at Moosehead is on plans to extract a bulk sample on the Western Trend using conventional drill and blast methods.
A second bulk sample from the Footwall Splay in the Eastern Trend is planned for extraction utilizing Novamera Inc.’s proprietary blind drilling mining technique, at a later date.
The Company is waiting for the gold assay results from 28 holes drilled at Moosehead and Fleur de Lys this season, and release of analytical results have been delayed by lengthy lab turnaround times.
Conventional Bulk Sample – Western Trend
Three areas (labelled A, B and C on Plan Map 2) within the Western Trend were drill tested with a series of short holes to determine the best location to extract a conventional bulk sample of 1,000 cubic metres (approximately 2,700 tonnes). Area C was chosen, and the excavation is underway.
A zone of quartz veining with associated altered and mineralized mafic dyke has been exposed in the centre of the trench (see Image 1), which is believed to be linked to a 1.5 m wide quartz vein intersected in drill hole MH-24-618, which contained 25 specks of visible gold. MH-24-618 is located approximately 10 m south of the end of the exposed vein.
Sokoman Minerals Corp. (TSXV: SIC) (OTCQB: SICNF) - Tim Froude, P.Geo., President and CEO sat down with mining analyst Allan Barry Laboucan on his “Rocks and Stocks News Show” to discuss the recent news from its Moosehead orogenic gold project.
Technology
On September 26, 2024, Visionstate Corp. (TSXV: VIS) announced that it has received final acceptance by the TSX Venture Exchange for the closing of its previously announced non-brokered private placement of $600,000, which was fully subscribed.
The Company will issue 24,000,000 units of the Company (“Units”) at a price of $0.025 per Unit for gross proceeds of $600,000 as previously announced on August 29, 2024. Each Unit is comprised of one (1) common share of Visionstate (“Common Share”) and one (1) Common Share purchase warrant (“Warrant”) whereby each Warrant entitles the holder to purchase one (1) additional Common Share at a price of $0.05 per Common Share for a period of five (5) years following the date of closing. The Common Shares and Warrants comprising the Units are subject to a four-month plus one day hold period from the time of closing.
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