Futures Surge To All Time High As Earnings Supercharge Market Meltup
The wall of worry that preoccupied traders just weeks ago has melted away, and has been replaced with a global market melt up (just as Goldman predicted again this weekend), which pushed US index futures to a new all time high this morning when spoos hit 4,580.75, while propelling European and Asian stocks higher as corporate earnings helped boost sentiment amid lingering concerns about inflation and growth. As of 715am ET, US equity futures were up 0.42% or 19.25 points, Dow Jones futures were up 126 points or 0.35% and Nasdaq futures jumped 0.61%, extending cash market gains boosted by Tesla’s rally to a $1 trillion market value on a big order and Facebook’s results announcement revealing strong user growth and a $50 billion stock buyback. 10-year Treasury yields dropped by 1 basis point while the dollar slid to session lows. Bitcoin traded around $63,000.
The barrage of earnings reports continued on Tuesday morning, with United Parcel Service, General Electric and 3M all gaining in pre-market trading after strong results. Eli Lilly advanced after raising full-year forecasts. Bakkt shares jumped 36% in the U.S. premarket session after more than tripling Monday when Mastercard said it has inked a deal with the firm to help banks offer cryptocurrency rewards on their debit and credit cards. Facebook also rose after pledging to buy back as much as $50 billion more in stock, with tech heavyweights Twitter, Alphabet and Microsoft reporting after the market close on Tuesday. Here are all the notable premarket movers:
- Facebook (FB US) rises as much as 2.5% in premarket as analysts stay bullish despite a third-quarter revenue miss and an outlook that was below consensus. Advertising growth is seen improving in 2022.
- Tesla (TSLA US) gains 1% after stock closed at a record high, boosted by several factors on Monday including a large car order from rental firm Hertz and Morgan Stanley lifting its price target.
- Creatd (CRTD US) was up 27% adding to a 50% gain over the past two trading sessions amid a rally in a growing number of retail-trader favorite stocks linked to former U.S. President Donald Trump.
- Redbox (RDBX US) rises as much as 130% after the firm completed a business combination with Seaport Global Acquisition, a special purpose acquisition company.
- Cryptocurrency-exposed stocks rise, with Eqonex (EQOS US), previously known as Diginex, more than doubling in value after listing Polkadot on its platform and Bakkt (BKKT US) extending Monday’s gains.
Earnings season is helping to counter concerns that elevated inflation and tightening monetary policy will slow the recovery from the pandemic. Some 81% of S&P 500 members have reported better-than-expected results so far, though CitiGroup Inc. warned that profit growth may be close to peaking.
Equity markets are “continuing their recovery and we expect this process to continue past big-tech earnings” and this week’s European Central Bank meeting, where policy makers may flag the end to their pandemic bond-buying program, Sebastien Galy, senior macro strategist at Nordea Investment Funds, wrote in a note.
Still, some analysts voiced caution over the impact of the COVID-19 pandemic on supply chains: “Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits,” Deutsche Bank analysts wrote.
The debate over price pressures continued when former Treasury Secretary Lawrence Summers said officials are unlikely to deal with “inflation reality” successfully until it’s fully recognized.
The MSCI world equity index, which tracks shares in 50 countries, added 0.1%
European shares hit the highest level in seven weeks: the Stoxx Europe 600 index rose more than 0.5% led by gains in travel stocks and insurers, and edging close to a the record high reached in September while German stocks gained 0.9%. Reckitt Benckiser gained more than 5% after the maker of Strepsils throat lozenges raised its sales forecast. Swiss lender UBS Group AG climbed after posting a surprise jump in profit, while Novartis AG advanced on news it may spin off its generic-drug unit. After a stellar quarter for U.S. and British banks, Switzerland’s UBS rose over 2% on its highest quarterly profit since 2015, helping the financial services sector climb about 1%.
Earlier in the session, the MSCI Asia Pacific Index traded 0.3% higher in afternoon trading, paring an earlier gain of as much as 0.7% which pushed it to its highest level in six weeks. Asian stocks rose as investors focused on encouraging earnings reports from some of the world’s biggest technology companies. The advance was driven by a subgauge of IT names including South Korean memory chipmaker SK Hynix, which climbed after reporting record sales and forecasting further demand growth. Japanese electronics giants Nidec Corp. and Canon Inc. reported results after Tuesday’s close. “The earnings season so far continues to meet investor expectations and assuage inflationary concerns,” said Justin Tang, head of Asianresearch at United First Partners. Tesla’s order from Hertz, good prospects for the $550 billion U.S. infrastructure bill and the latest talks between U.S. and China officials also helped “inject some risk appetite,” Tang said. Japan led gains among national benchmarks, with the Topix rising more than 1%. The market was helped by a local media report that the ruling Liberal Democratic Party may be able to win a majority of seats on its own in the general elections scheduled for next week. Key gauges in tech-heavy South Korea and Taiwan also jumped more than 0.5%, while benchmarks fell in Hong Kong and China.
In China, Modern Land China Co. became the latest builder to miss a payment on a dollar bond, in a further sign of stress in the nation’s real estate sector. Defaults from Chinese borrowers on offshore bonds have jumped to a record.
Japanese stocks advanced as investors looked toward earnings reports from major companies and political stability after the upcoming election. Electronics makers and telecommunications providers were the biggest boosts to the Topix, which gained 1.2%. Fast Retailing and Tokyo Electron were the largest contributors to a 1.8% rise in the Nikkei 225. Asian stocks and U.S. futures also rose, following the S&P 500’s climb to a record high, amid positive news from Tesla and Facebook. Japanese companies reporting results today include Canon, Nidec and Hitachi Construction Machinery. Meanwhile, the ruling Liberal Democratic Party may be able to exceed a majority of 233 seats on its own in the general elections scheduled for Oct. 31, a poll conducted by Asahi showed. “There’s a lot of noise out there but for stocks, it’s about fundamentals, which are corporate earnings,” said Hiroshi Matsumoto, head of Japan investment at Pictet Asset Management. “We’re starting to see some pretty good earnings figures, so I’m thinking we’ll see the Nikkei 225 consolidate around the 29,000 level this week.”
In rates, Treasuries were cheaper across front-end of the curve, fading a portion of Monday’s gains even as corporate earnings propel stock futures to new highs. The 10-year TSY yield is lower by less than 1bp at 1.622%; 2-year yields are cheaper by ~1bp on the day while long-end of the curve is richer by ~1.5bp, flattening 2s10s, 5s30s spreads by ~2bp. The TSY curve is flatter with long-end yields richer on the day, unwinding Monday’s steepening move. Treasury auction cycle begins with sale of 2-year notes, followed by 5- and 7-year offerings over next two days.
In FX, the Bloomberg Dollar Spot Index was mixed but slumped to session lows as US traders walked in. The pound led gains followed by other risk-sensitive currencies such as the Australian and New Zealand dollars. Sterling gained even as overnight index swaps show traders trimmed back bets for BOE tightening, pricing in 14 basis points of hikes in November, down from 15 points previously. The yen was the worst performer as demand for haven assets receded following talks between U.S. and Chinese officials on the economy and cooperation in which some incremental progress was made. The euro inched up after gyrating toward the $1.16 handle; the euro’s volatility skew flattened in the past two weeks, suggesting a rebound in the spot market. Given the latter has stalled at a key resistance area, risk reversals could show downside risks once again. The Turkish lira rallied the most in more than four months after President Recep Tayyip Erdogan dropped his demand for 10 Western ambassadors to be expelled from the country.
China’s offshore yuan gained for a fourth straight day, lifted by a phone call between the U.S. and China on trade and economic issues. Overnight borrowing costs sunk to one-month lows after the central bank boosted cash injections into the financial system.
In commodities, WTI crude oil was steady around $84 a barrel and Brent traded above $86 as investors weighed the outlook for U.S. stockpiles and prospects for talks that may eventually help to revive an Iranian nuclear accord, allowing a pickup in crude exports.
Gold held above $1,800 an ounce and Bitcoin hovered around $62,500.
Looking at today’s calendar, we get the August FHFA house price index, September new home sales, October Conference Board consumer confidence and Richmond Fed manufacturing index. In central banks, ECB’s Villeroy and de Cos will speak. In corporate earnings, we will get results from Microsoft, Alphabet, Visa, Eli Lilly, Novartis, Texas Instruments, UPS, General Electric, UBS and Twitter
- S&P 500 futures up 0.4% to 4,576.25
- STOXX Europe 600 up 0.6% to 474.91
- MXAP up 0.4% to 200.93
- MXAPJ up 0.2% to 662.77
- Nikkei up 1.8% to 29,106.01
- Topix up 1.2% to 2,018.40
- Hang Seng Index down 0.4% to 26,038.27
- Shanghai Composite down 0.3% to 3,597.64
- Sensex up 0.4% to 61,232.14
- Australia S&P/ASX 200 little changed at 7,443.42
- Kospi up 0.9% to 3,049.08
- German 10Y yield little changed at -0.12%
- Euro little changed at $1.1609
- Brent Futures down 0.3% to $85.76/bbl
- Gold spot down 0.3% to $1,802.76
- U.S. Dollar Index little changed at 93.86
Top Overnight News from Bloomberg
- Traders are wagering on rate hikes of as much as 158 basis points over the next year in countries including the U.K., New Zealand and South Korea amid soaring costs of living and commodity prices. Yet a flattening in yield curves — historically seen as the market’s assessment of economic health — indicates rising concern that such a rapid withdrawal of support will hurt the nascent recovery
- Financial markets have stubbornly ignored recent warnings from ECB policy makers including Chief Economist Philip Lane that they’re wrong to anticipate a rate hike at the end of next year. The task of persuading people otherwise will fall to President Christine Lagarde as she presents the Governing Council’s latest decision on Thursday
A more detailed look at global markets courtesy of Newsquawk
Asia-Pac stocks were lifted by the tailwinds seen stateside, whereby the SPX and DJIA both notched fresh all-time-highs, although the NDX outperformed as Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. US equity futures overnight drifted higher with the NQ narrowly outperforming its peers. European equity futures also posted mild gains. Back to APAC, the ASX 200 (+0.1%) was kept afloat by tech names as the sector saw tailwinds from the stateside performance. The Nikkei 225 (+1.8%) outperformed following the prior session’s underperformance, and as the JPY drifted lower during the session. The KOSPI (+0.9%) was also firmer with SK Hynix rising some 3% at the open as chip demand supported earnings. The Hang Seng (-0.4%) and Shanghai Comp (-0.3%) opened flat but the latter was initially underpinned following another chunky CNY 190bln net liquidity injection by the PBoC. The Hang Seng Mainland Properties Index fell almost 5% in early trade, whilst Modern Land noted that it will not be able to meet payments and shares were halted until future notice. Finally, 10yr JGBs were lower amid spillover selling from T-notes and Bund futures.
Top Asian News
- MediaTek Sees 2021 Revenue Growing by 52%; 3Q Profit Beats
- UBS Going ‘Full Bull’ on China Despite Outflows, Growth Worry
- China’s IPO Flops Raise Red Flag Over Shares Pricing: ECM Watch
- Asian Stocks Rise as Investors Focus on Major Tech Earnings
European equities (Stoxx 600 +0.6%) trade on a firmer footing after extending on the tentative gains seen at the cash open with the Stoxx 600 at its best level in around seven weeks. The APAC session saw some support via the tailwinds seen in the US after the SPX and DJIA both notched fresh all-time highs and the NDX outperformed and Tesla shot past the USD 1000/shr mark and USD 1trl market cap milestone. The Nikkei 225 (+1.7%) led gains in the region alongside a firmer JPY whilst the Shanghai Comp (-0.3%) was unable to benefit from another chunky liquidity injection by the PBoC. Stateside, futures are indicative of a firmer cash open with the NQ (+0.6%) continuing to outpace peers with Facebook +2.4% in pre-market trade post-results which saw the Co. announce a USD 50bln boost to its share buyback authorisation. From a macro perspective, with the Fed in its blackout period and events on Capitol Hill not providing much impetus for price action, the equity landscape will likely be dominated by earnings with the likes of Alphabet, Microsoft, General Electric, 3M, Visa, AMD and Twitter all due to report today. Earnings are also playing a pivotal role in Europe today with Reckitt (+6.4%) top of the FTSE 100 and supporting the Personal and Household Goods sector after Q3 results prompted the Co. to raise its sales outlook. UBS (+0.6%) is off best levels but still firmer on the session after reporting its highest quarterly profits in six years. Countering the upside from UBS in the Banking sector is Nordea (-4.0%) with shares weighed on by Sampo selling 162mlnn shares in the Co. to institutional investors. Novartis (+1.6%) shares are trading broadly inline with the market after opening gains were scaled back post-Q3 earnings which saw the Co. report a 10% increase in operating profits and announce a strategic review of its generic drug unit Sandoz. Telecoms are near the unchanged mark and unable to benefit from the broader gains seen across the region as Orange (-2.7%) acts as a drag on the sector after announcing a decline in Q3 earnings.
Top European News
- UBS Going ‘Full Bull’ on China Despite Outflows, Growth Worry
- Adler Sells Real Estate Portfolio Valued at More Than EU1B
- Europe Gas Extends Gains With Weak Russian Flows, Norway Outages
- Latest Impact of Europe’s Energy Crisis is a Plunge in Trading
In FX, the 94.000 level remains tantalisingly or agonisingly close, but elusive for the Dollar index, and it could simply be a psychological barrier as a breach would clear the way for a complete comeback from trough to 94.174 peak set last week. However, the Greenback has lost some yield attraction and the broad risk tone is bullish to dampen demand on safe-haven grounds, while chart resistance and option expiries are also preventing the Buck from staging a more pronounced rebound ahead of a busier US agenda including housing data, consumer confidence, several regional Fed surveys and the first slug of issuance in the form of Usd 60 bn 2 year notes. Back to the DXY, 93.965-795 encapsulates trade thus far, and the 21 DMA stands at 93.966 today, just 3 ticks shy of Monday’s high.
- AUD – In similar vein to its US counterpart, the Aussie is finding 0.7500 a tough round number to crack, convincingly, but Aud/Usd is deriving support from the ongoing recovery in industrial metals awaiting independent impetus via Q3 inflation data tomorrow.
- JPY/CHF – The Yen and Franc continue to lag their major peers and retreat further vs the Dollar, with the former now struggling to keep sight of the 114.00 handle even though hefty option expiries reside from 113.85 to the big figure (1 bn), and Usd/Jpy faces more at the 114.50 strike (1.1 bn), while the latter is sub-0.9200 and unwinding more gains relative to the Euro as the cross probes 1.0700.
- GBP/NZD – Conversely, Sterling remains primed for further attempts to extend gains beyond Fib resistance and breach 1.3800, while eyeing 0.8400 against the Euro irrespective of some UK bank research suggesting that BoE Governor Bailey may not back up recent hawkish words with a vote to hike rates at the November MPC. Elsewhere, the Kiwi is still hovering above 0.7150 and defending 1.0500 vs its Antipodean rival with a degree of traction via RBNZ Governor Orr warning that climate change could culminate in a lengthy phase of stronger inflation that needs a policy response.
- EUR/CAD – Both rather flat, as the Euro continues to pivot 1.1600 and rely on option expiry interest for underlying support (1.5 bn rolling off from the round number to 1.1610 today), but also anchored by the 21 DMA that aligns with the big figure, while the Loonie has lost its crude prop on the eve of the BoC, though should also receive protection from expiries at 1.2400 (1 bn) within a 1.2394-68 range.
- EM – The Try has reclaimed more lost ground to trade above 9.5000 vs the Usd on a mix of corrective price action and short covering rather than any real relief about Turkey’s latest rift with international partners given another blast from President Erdogan who said statements issued by ambassadors on Kavala target his country’s judiciary and sovereignty, adding that the Turkish judiciary does not take orders from anyone. On the flip-side, the Zar is softer alongside Gold and ongoing issues with SA power supply provided by Eskom.
In commodities, WTI and Brent have been softer throughout the European morning dipping from the initially steady start to the APAC session after yesterday’s pressured; nonetheless, prices haven’t dipped too far from recent peaks. Newsflow for the complex and broadly has been sparse thus far as focus remains very much on earnings and events due later in the week. Specifically for energy, we had commentary from Russian Deputy PM Novak that he wants OPEC+ to stick to the agreement to increase production by 400k BPD at the November gathering, commentary which had little impact on crude at the time. Elsewhere, the weekly Private Inventory report is due later in the session and expectations are for a build of 1.7mln for the headline crude figure; for reference, both distillates and gasoline stocks are expected to post a draw. Moving to metals, spot gold and silver are pressured this morning with initial downside perhaps stemming from a short-lived resurgence in the USD; however, while the metals do have a negative bias, the magnitude of this – particularly in spot gold – is fairly minimal. Separately, base metals are softer with LME copper hindered and still shy of the 10k figure. Again, newsflow this morning has been limited but we did see a production update from Hochschild who confirmed FY21 production guidance of 360-370k gold-equivalent ounces after reporting that Q3 was the strongest period of the year, thus far.
US Event Calendar
- 9am: Aug. S&P Case Shiller Composite-20 YoY, est. 20.00%, prior 19.95%; 9am: MoM SA, est. 1.50%, prior 1.55%
- 9am: Aug. FHFA House Price Index MoM, est. 1.5%, prior 1.4%
- 10am: Oct. Conf. Board Consumer Confidenc, est. 108.2, prior 109.3
- Present Situation, prior 143.4
- Expectations, prior 86.6
- 10am: Oct. Richmond Fed Index, est. 5, prior -3
- 10am: Sept. New Home Sales, est. 758,000, prior 740,000; MoM, est. 2.5%, prior 1.5%;
DB’s Jim Reid concludes the overnight wrap
If you’ve never seen Lord of the Flies feel free to come round to our house where you’ll get a live performance that gets more authentic the longer this two week half-term holiday we’re in goes on. Yet again working is the safest option. We have the option to “purchase” extra holiday each year but I’m thinking of seeing if I can give some back and take the money instead. They are hard work when put into a room together for any period of time.
It was not only the fighting that was the same as last week, markets were pretty similar yesterday too as we saw fresh equity highs alongside renewed multi-year highs in breakevens. There are a few subtle changes in company reporting trends though. Even though this has been a good earnings season in aggregate we are starting to see more companies with supply backlogs, hiring difficulties, and rising input prices that are eating into profits. Indeed yesterday saw a few consumer staples companies lower full year profit outlooks in their earnings releases.
Nevertheless, major equity indices marched higher, with the small cap Russell 2000 (+0.93%) and Nasdaq composite (+0.90%) outperforming the S&P 500 (+0.47%). Consumer discretionary stocks were the clear outperformer, driven by news of Tesla (+12.66%) receiving a 100k car order from Hertz. Tesla’s big day saw it become the first automaker to cross 1 trillion dollar market cap and also drove the outperformance of the FANG index ahead of Facebook’s after hours earnings release.
Speaking of which, Facebook missed revenue estimates but beat on earnings. Shares were slightly higher in after-hours trading, where they are betting big on virtual reality technology.
Overnight in Asia, the Nikkei 225 (+1.75%) and the KOSPI (+0.61%) are outperforming the Hang Seng (-0.42%) and Shanghai Composite (+0.01%). The sentiment in China is being clouded by the news of another developer, Modern Land China Co., missing a payment on a $250 million dollar bond. This news came as Bloomberg reported that Chinese firms set a yearly record on offshore bond defaults. Another development in the region is that Hong Kong has pushed back against yesterday’s calls for an easing in its virus rules which the banks in particular were calling for. In geopolitics, China’s Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen held a call about trade and economic concerns, boosting sentiment in Asian markets, while the S&P 500 mini futures (+0.24%) is trading higher. The yield on 10y Treasury (+0.7bps) is also up. In data releases, South Korean preliminary GDP for Q3 came in at +4.0% versus +4.3% expected, while Japan’s services PPI for September declined to +0.9%, missing estimates of +1.1%.
Back to yesterday and in fixed income, as mentioned at the top inflation breakevens continued their march higher. In the US, 10-year Treasury breakevens (+2.7 bps) closed at 2.67%, just shy of their widest levels since 10-year TIPS began trading in 1997. 10yr nominal yields were -0.2 bps lower as real yields slipped -2.3bps to their lowest levels since mid-September. European breakevens kept pace, with 10-year German breakevens increasing +1.9bps to 1.93% and UK breakevens increasing +1.2 bps to 4.20%. As was the case with the US, real yields fell as nominal 10-year yields decreased across Europe. Bunds (-0.9bps), Gilts (-0.5bps), OATs (-1.1bps) and BTP (-3.4bps) yields all fell.
Crude oil futures put in a mixed performance. Multiple OPEC+ members signaled they won’t increase supply at their upcoming meeting leading to gains in crude, yet the gains were short lived, as headlines noted that Iran and the EU will stage talks to restore the 2015 nuclear deal, paving a way for Iranian oil supply to return to the market. Brent futures finished +0.54% higher while WTI futures were unchanged. Natural gas prices were on a one-way track higher, however. US natural gas prices had their biggest one-day gain in a year, increasing +11.70%, on the back of a colder forecast for the upcoming winter as supply issues still abound. European and UK natural gas prices were only modestly higher by comparison, increasing +1.27% and +1.86%, respectively. European leaders are gathering in Luxembourg today for an emergency meeting on the energy crisis.
European equities were almost unchanged, with the STOXX 600 (+0.07%) finishing with marginal gains with energy (+1.27%) leading. The German DAX (+0.36%) gained with the help of stronger IT (+1.76%) performance despite Ifo expectations (95.4) coming in below consensus (96.6).
In other data releases, the Chicago Fed National Activity Index came at -0.13 versus 0.20 expected. The Dallas Fed Manufacturing Activity Index (14.6), however, surprised on the upside by coming above expectations (6.0). Delivery times remained elevated in the survey, and a special question showed that labour supply issues got slightly worse.
In virus news, Moderna reported that its vaccine showed a strong immune response for children from 6 to under 12 years old. Meanwhile, China announced in its initial guidelines that unvaccinated athletes at the 2022 Winter Olympics in Beijing would have to quarantine for 21 days, while Hong Kong was pressured by banks to relax its zero-COVID policy.
In today’s data releases, August FHFA house price index, September new home sales, October Conference Board consumer confidence and Richmond Fed manufacturing index are due from the US. In central banks, ECB’s Villeroy and de Cos will speak. In corporate earnings, we will get results from Microsoft, Alphabet, Visa, Eli Lilly, Novartis, Texas Instruments, UPS, General Electric, UBS and Twitter
St-Georges Announces the Closing of the $5.57M Offering
Montréal – November 30, 2021 – St-Georges Eco-Mining Corp. (CSE:SX) (OTC:SXOOF) (FSE:85G1) (CNSX:SX.CN) is pleased to announce the closing of its…
Montréal – November 30, 2021 –( ) (OTC:SXOOF) (FSE:85G1) (CNSX:SX.CN) is pleased to announce the closing of its previously announced non-brokered private placement offering of 10,127,273 “flow-through” units at a price of $0.55 for total gross proceeds of $5,570,000.15. A total of 11 subscribers participated, including 4 insiders for $305,000 and 3 institutional investors in Sprott Assets, Maple Leaf and Marquest for $3,725,000 or 66.8%.
Each FT Unit is comprised of one (1) common share in the capital of the Company on a “flow-through” basis (each, a “FT Share”) and one half (0.5) FT Share purchase warrant (each, a “FT Warrant”). Each full FT Warrant entitles the holder thereof to purchase one (1) Share at an exercise price of $0.65 for a period of 24 months (the “Warrant Expiry Date”).
In the event that, during the period of 4 months following the closing date of the Offering, the trading price of the Shares on the Canadian Securities Exchange (the “CSE”) reaches $1.25 per Share on any single day, the Corporation may, at its option, accelerate the Warrant Expiry Date by delivery of notice to the registered holders (an “Acceleration Notice”) thereof and issuing a press release (a “Warrant Acceleration Press Release”, and, in such case, the Warrant Expiry Date shall be deemed to be 5:00 p.m. (Montreal time) on the 30th day following the later of (i) the date on which the Acceleration Notice is sent to warrant holders, and (ii) the date of issuance of the Warrant Acceleration Press Release.
The Corporation will use the proceeds of the Offering to further advance the exploration effort on its wholly owned Manicouagan Project following important recent developments.
The Corporation paid finder fees of $302,700.01 in cash and issued: (i) 557,273 non-transferable Finder’s warrants entitling the holder thereof to purchase at an exercise price of $0.65.
All securities issued pursuant to this Offering are subject to the applicable statutory hold period ending March 31, 2022. The Offering is subject to the approval of the CSE.
Related Party Transaction
Certain insiders of the Corporation subscribed for a total of 554,545 FT Units under the Offering, which is a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuances to the insiders are exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in section 5.5(b) as the Corporation’s shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in section 5.7(a) of MI 61-101 in that the fair market value of the consideration of the securities issued to the related parties did not exceed 25% of the Corporation’s market capitalization. The Corporation did not file a material change report more than 21 days before the expected closing of the Offering as the details of the Offering and the participation therein by related parties of the Corporation were not settled until shortly prior to closing and the Corporation wished to close on an expedited basis for sound business reasons.
ON BEHALF OF THE BOARD OF DIRECTORS
“Neha E. Tally”
NEHA EDAH TALLY
St-Georges develops new technologies to solve some of the most common environmental problems in the mining sector, including maximizing metal recovery and full circle EV battery recycling. The Company explores for nickel & PGEs on the Julie Nickel Project and the Manicougan Palladium Project on Quebec’s North Shore and has multiple exploration projects in Iceland, including the Thor Gold Project. Headquartered in Montreal, St-Georges’ stock is listed on the CSE under the symbol SX and trades on the Frankfurt Stock Exchange under the symbol 85G1 and on the OTCQB Venture Market for early stage and developing U.S. and international companies. Companies are current in their reporting and undergo an annual verification and management certification process. Investors can find Real-Time quotes and market information for the company on www.otcmarkets.com.
The Canadian Securities Exchange (CSE) has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this release.
Government Handling Of COVID Has Been “A Crime”, Expect More Selloffs: Trader
Government Handling Of COVID Has Been "A Crime", Expect More Selloffs: Trader
Submitted by QTR’s Fringe Finance
This is Part 1 of an exclusive…
Government Handling Of COVID Has Been “A Crime”, Expect More Selloffs: Trader
Submitted by QTR’s Fringe Finance
This is Part 1 of an exclusive interview with Rosemont Seneca, a U.S. based professional trader focused on event-driven and distressed situations. Rosemont spent their career on the buy-side working as a financials analyst and their investing/trading style is inspired in equal parts by Icahn and Druckenmiller.
Like me, Rosemont is not an RIA and does not hold licenses. Market commentary and opinion expressed in this interview are personal views, not investment advice or solicitation for business.
QTR’s Note: The point of this blog is to bring to the reader information and perspectives they, or the mainstream media, may not otherwise find on their own. The cool thing about FinTwit is that you get to meet people based on their ideas and investing acumen and not their identities. I have been following Rosemont on Twitter for years and love their perspective and takes on the market – their takes often stand at odds with my own and they have helped me broaden my horizon and be less bearish on markets, while still maintaining my skepticism about monetary policy. They have chosen to remain completely anonymous with me, which I respect, and I have never personally met or otherwise know anything about the identity of Rosemont. That doesn’t matter, however, because I like their ideas and their commentary. You can follow Rosemont on Twitter here.
Part 2 of this interview can be found here.
Q: Hi Rosemont. Thanks for agreeing to an interview for my readers despite wanting to stay anonymous. Right off the bat: why do you use Bernard Baruch for your Twitter profile photo?
Baruch is one of the most fascinating Wall Street characters of 20th Century. He has tremendous intuition and gut instinct for the markets, macro economics and politics and he reminds us that the three are intertwined at all times
That’s a great segue to my next question: you recently got very bullish on gold when you hadn’t been in the past – what caused that shift in attitude?
We saw a global risk contagion event in capital markets today (11/26); Bitcoin lost over 8.0% of its value, the S&P dropped -2.2% and gold ended the session flat on the day after a mostly positive session. We expect more days like this in 2022.
This is the first time since the post-GFC period in 2009 that we’ve purchased or held gold instruments in our portfolios. At present we own an 8.0% position in the GLD ETF and periodically traffic in Barrick Gold and Newmont equities. Recall that during the Q4 2018 ‘Taper Tantrum’ and most acute phase of the COVID dislocation in Q1-Q2 2020, gold futures, ETFs, and gold miner equities protected your wealth from severe capital market drawdowns.
Gold is an umbrella we hope will keep us dry if it rains very hard next year.
Holding gold in a portfolio today is a pragmatic ‘TINA’ bet borne of healthy caution in the wake of a multi-year equity bubble that has begun to run amok.
The reality is gold is not an optimal investment for compounding wealth in the long-run; owning the GLD ETF since inception in 2004 has returned a roughly 8.0% CAGR which is adequate for a pension fund or retiree but relatively mediocre vs. the alternatives.
Investors are better off owning Walmart, Costco, McDonald’s or Starbucks and grow our capital tax-efficiently with high-ROE/RoIC ‘compounders’ that pay dividends. The gold ‘streamers’ such as Wheaton and Franco-Nevada however happen to be very interesting investments with compelling business models that have generated compounder-like returns for Shareholders over the last two to three decades.
We’ve come a long way from the market depths of March 2020 and perhaps it’s time to take a more cautious stance going into year-end. We are currently operating on the premise that the Nasdaq and S&P could see negative returns in 2022. If the indices see a drawdown of 10-20% (or greater) we expect gold to appreciate or hold its value in real terms next year. There are labor and supply chain shortages globally that will definitely impact the gold mining industry. If CPI hits escape velocity and reaches 8-10% higher next year, we’ll be content with a 10% allocation in gold as we expect institutional and speculator capital flows to put a firm bid behind the yellow metal.
You’re one of the very few out there calling the entire crypto space a bubble. What’s the key argument in differentiating crypto from other assets? Is crypto worth zero or is there a value and, if there is, where does the value come from?
In the last few years market participants have adopted a pseudo-religious attitude towards Bitcoin, Ethereum, and a whole host of crypto currencies. People have come to either ‘believe’ or ‘not believe’ in the asset class and its prospects.
What we can definitely say today is that there are over 14,850 different crypto currencies trading on over 430 venues with a combined ‘market capitalization’ of roughly $2.5 trillion dollars. To our best knowledge these assets produce zero cash flow or dividends, exhibit very high volatility, remain subject to boom-bust sequences, and are used as an apparatus for elaborate criminal hacking schemes.
The average daily volume of these 14,000+ crypto currencies is roughly $150 billion per day. We estimate that approximately 90% of this turnover is driven by purely speculative or gambling capital flows from small retail traders. If we assume that roughly 2-3% of average daily volume consists of bona fide commercial transactions (including portfolio investment), this leaves almost $10 billion of daily volume that derives from money laundering, fraud and other illicit schemes etc.
Some governments have rushed to legalize, adopt or allow for crypto currencies to proliferate in their economy for fear of stymieing or not supporting innovation. Others have taken a hardline stance and begun to outlaw the usage of crypto in their banking and financial system. We are of the view that Bitcoin-like protocols present a clear & present danger to many emerging market countries’ ability to issue currency and sovereign debt over the next decade. As the true nature of these crypto assets become more evident, we’ll see more and more countries outright ban and prosecute their usage in their economies.
Bitcoin and Ethereum (combined 60% of total crypto market capitalization) may very well survive and find a way to thrive due to ‘fiat-by-consensus’ adoption. Under that scenario they clearly will not trade to zero. But that doesn’t negate the presence of a current bubble where 99% of cryptos are of near-zero ultimate value. Promoters have come to euphemize cryptocurrencies as ‘projects’ but most cryptocurrencies are outright frauds.
We think it’s time for crypto investors and regulators to have a more honest, empirical framework for discussing the intrinsic value and risks of these crypto assets. If we can handicap real estate on cap rates and LTV ratios and equites on P/E ratios and cashflow yields, we should adopt a framework for Bitcoin and Ethereum etc (Dogecoin?) that doesn’t border on the pseudo-religion.
I wrote an entire article based off your assumption that we are once again in a 1999-2000 style crash setup. What were the signs that helped you recognize this?
In the wake of the COVID crisis and ensuing Monetary/Fiscal stimulus, too many people with very little financial literacy or professional training took up day-trading of equities, options and crypto currencies as a hobby and eventual vocation. The prudent, cautious amongst us (Warren Buffett included) were seemingly left behind in the speculative frenzy that ensued in the summer of 2020.
We’re often reminded to not confuse investing/trading luck with skill. Regardless, many very young people made a lot of money in a very short period and thought that this process was somehow normal or even sustainable. To be perfectly clear: there was nothing normal about the Meme Stock frenzy, SPAC mania, or crypto and NFT bubble that erupted.
When we witnessed trillion-dollar market caps such as Tesla and Nvidia trading like biotechs in the frenzy of Q4 of 2021, we decided we’d seen enough of this equity market mania. It was eerily reminiscent of Cisco, Lucent, Intel in 1999. The equity market today feels bloated and reckless; it’s probably a good time to start taking chips off the table and leave the party while people are still having fun.
November 2021 was a harsh reminder that valuations and capital structures eventually do matter; people will learn the hard way.
What are the most likely catalysts to set the market off moving lower?
Nobody rings the bell at a market top, but negative catalysts include:
– inability to eradicate COVID in Europe & Asia will keep global trade and travel routes shut for another year
– cascade of lingering supply chain woes = potentially very recessionary
– debilitating energy price spikes in 2022-2023 = looming stagflation
– margin loan balances are at historically very high levels
– continuation of the Tech selloff we witnessed in Q4 2021
– fraud & accounting malpractice (always prevalent in manias)
– Fed signaling significantly higher interest rates in the aftermath of inflation
– Geopolitics: a potential Kamala Harris Presidency would see Russia and China turn belligerent overnight
What’s your take on how we’re handling Covid? You’ve mentioned what happened to our economy over the last 18 months was “economic terrorism”. Will we learn – either through people revolting or negative consequences – or will we continue down this Orwellian path?
It’s very disappointing to see how politicized the pandemic became in the United States. It obviously didn’t help that COVID struck in an Election year, but there will be plenty of blame to go around the table when a proper post-mortem analysis is conducted years from now. We hope that Bethany McLean (Enron: The Smartest Guys in the Room) will eventually write a thoroughly unbiased expose on the timeline of policy decisions in 2020. We’re of the firm belief that our Leaders in Washington D.C. did more harm than good in the early months of this pandemic.
We can safely conclude the 2020 COVID shutdowns are the direct cause for the supply chain dislocations and hyperinflation that Americans are about to suffer. The shutdowns that we witnessed in the United States were a flawed policy decision akin to willful pilot error or ‘economic terrorism;’ Federal and State Governments suffocated millions of livelihoods and permanently destroyed hundreds of thousands of perfectly viable small & medium family-owned businesses. The larger, better capitalized multinational corporations capable of accessing capital markets and Government Stimulus Programs not only survived, they eventually thrived.
What happened can only be described as a crime.
Part 2 of this interview, where we discuss inflation, the Biden administration, why China banned crypto and more, can be found here.
It should be assumed I or Rosemont Seneca has positions in any security or commodity mentioned in this article. None of this is a solicitation to buy or sell securities. Neither I nor RS hold licenses or are investing professional. None of this is financial advice. Positions can always change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.
These 18 ASX resources IPOs are due to list in December. EIGHTEEN.
It’s like an advent calendar for mining and exploration IPOs, except instead of factory floor chocolate you get gold. GOLD. … Read More
The post These…
It’s like an advent calendar for mining and exploration IPOs.
Please note that these listing dates are extremely speculative. If you’re interested, contact the company direct for a better idea of when they expect to start trading on the ASX.
COSMOS EXPLORATION (C1X)
Focus: Gold, Copper and Nickel
Tentative Listing Date: 1 Dec
The RareX (ASX:REE) spinoff wants to raise $5m through its IPO. It has two projects: ‘Byro East’ (nickel-copper-PGEs) in WA and ‘Orange East’ (gold) in NSW.
Byro East was pegged by $45m market cap rare earths explorer RareX last year. It is very greenfields — having never been drilled — but Cosmos has identified four areas which could be prospective for Ni-Cu-PGEs.
Based on past exploration work, Cosmos has also identified several gold-copper targets at the small 40sqkm ‘Orange East’ project.
ORANGE MINERALS (ASX:OMX)
Focus: Gold, Copper
Tentative Listing: 3 Dec
Orange, which is looking to raise $7m in an IPO, is hunting for copper-gold in two major regions: Lachlan Fold Belt (NSW) and Eastern Goldfields (WA).
The NSW assets are close to major gold mines like Cadia (43.4Moz). In WA, it has ground within 25km of Lefroy’s (ASX:LEX) ‘Burns’ copper gold discovery (38m @ 7.63g/t gold, 0.56% copper).
A minimum 1,500m of drilling is planned following listing, with maiden resource at ‘Calarie’ gold project in NSW forecast for early 2022.
Focus: Gold, Nickel, Copper, PGEs
Tentative Listing Date: 3 Dec
The FirstAU (ASX:FAU) spinoff wants to raise between $8m and $12m through its IPO. It has lodged its prospectus with ASIC and is seeking to listing on the ASX around 3 December.
It has five projects in WA. Its flagship is ‘Talga’ project in the East Pilbara, a leading exploration location with new discoveries made nearby by Calidus Resources (ASX:CAI) at its ‘Warrawoona’ project and De Grey Mining (ASX:DEG) at Hemi.
The potential targeting of ‘Hemi-like’ intrusions within the East Pilbara projects present an exploration opportunity for 8AU “as both the exploration areas of the Talga JV and Railway Well project are located in a comparable geological environment”, it says.
LARVOTTO RESOURCES (ASX:LRV)
Focus: Gold, Copper, Cobalt, Nickel, PGEs
Tentative Listing Date: 6 Dec
Larvotto is looking to raise up to $6m in an IPO. It has three main projects: ‘Mt Isa’ (copper-gold-cobalt in Queensland), ‘Eyre’ (nickel-gold-PGEs in WA) and ‘Ohakuri’ (gold in NZ).
Mt Isa — acquired from Minotaur Exploration and Rio Tinto — is in a well-endowed, world-class copper and gold region.
Nearby deposits include the Mount Isa Mines Operation (MIM), Ernest Henry, E1, Swan-Mt Elliott, Starra, Osborne, Little Eva, Eloise, Jericho, Barbara, and Kulthor.
Larvotto says the project, although adjacent to the famous MIM operation, has been underexplored using modern exploration techniques.
AMERICAN WEST METALS (ASX:AW1)
Focus: Zinc, Copper, Indium
Tentative Listing Date: 7 Dec
John Prineas-chaired American West wants to raise $11m through its IPO. It has three advanced, high grade base metal projects in Utah focused on copper and zinc; two of which already have significant resource estimates.
The ‘West Desert’ project already hosts a 59Mt historical zinc-copper resource defined under Canadian NI-43-101 standards.
Following admission to the ASX, American West will undertake work to establish a JORC compliant resource – a must-have for ASX listed companies — and will further assess development potential with scoping studies.
The company will also continue exploration across the large and underexplored project area “where high-grade intersections of copper and zinc have already been encountered outside the resource envelope, indicating strong potential for further discoveries”.
RUBIX RESOURCES (ASX:RB6)
Focus: Copper, Nickel, PGEs, Zinc, Gold
Tentative Listing: 8 Dec
Rubix is looking to raise $4.5m in an IPO.
Its key asset is ‘Paperbark’, 25km from the ‘Century’ mine held by New Century Resources (ASX:NCZ) in North Queensland.
Supporting the Paperbark Project are three greenfields (unexplored) projects: ‘Etheridge’ (gold in Queensland) ‘Lake Johnston’ (nickel, copper, PGEs in WA) and ‘Collurabbie North’ (nickel, copper, PGEs in WA).
PANTHER METALS (ASX:PNT)
Focus: Gold, Nickel
Tentative Listing: 10 Dec
WA-based PNT, a subsidiary of London-listed Panther Metals PLC, raised $5m in an IPO.
Initial drilling will take place at the Coglia nickel-cobalt project, where a JORC compliant exploration target of 30-50 million tonnes at 0.6-0.8% nickel and 400-600 parts per million cobalt has already been defined.
The Merolia gold project is also high on Panther’s agenda, with immediate drilling also planned at the ‘40 Mile Camp’ 2.5km by 5km gold anomaly.
RONIN RESOURCES (ASX:RON)
Focus: Gold, Copper, Coal
Tentative Listing: 10 Dec
Colombia-focussed Ronin is looking to raise $5m in an IPO.
The company’s main game is ‘Vetas’: a large, high-grade, thermal coal project containing a JORC Compliant Exploration Target.
The Santa Rosa Project is an earlier stage gold and copper project “located in a prolific artisan mining district”.
HARANGA RESOURCES (ASX:HAR)
Focus: Gold, Uranium, Lithium
Tentative Listing Date: 13 Dec
The African gold, lithium and uranium explorer wants to raise up to $6.5m in an IPO.
‘Saraya’ in Senegal is an advanced-stage uranium-lithium-tin project explored by French Government-owned Areva prior to 2010. That work included an estimated 48,000m drilling.
The project is mainly hosted by granites and pegmatite units which is also prospective for lithium, tin, tantalum and niobium, with spodumene (lithium minerals) having been visually reported.
INFINTY MINING (ASX:IMI)
Focus: Gold, Lithium, Nickel
Tentative Listing Date: 14 Dec
It will have 19 tenements covering 711sqkm in the Pilbara and Central Goldfields.
ARMADA METALS (ASX:AMM)
Focus: Nickel, Copper, PGEs
Tentative Listing Date: 15 Dec
Armada wants to raise between $8m and $10m through its IPO.
It has 2,991sqkm of ground in the Nyanga Province, Gabon which includes several drill-ready nickel-copper targets like ‘Libonga North’, ‘Libonga South’ and ‘Matchiti Central’.
With over U$10m spent on exploration to date, Armada plans to hit these targets hard with drilling over the next two years.
CHEMX MATERIALS (ASX:CMX)
Focus: High Purity Alumina, Kaolin, Manganese
Tentative Listing Date: 20 Dec
ChemX — more advanced materials technology company than aspiring miner– wants to raise $7m through its IPO.
It says it has developed a proven process to produce High Purity Alumina (HPA), a critical input for battery technology.
ChemX plans to develop this ‘HiPurA’ HPA tech, as well as the ‘Kimba’ kaolin-halloysite and ‘Jamison Tank’ manganese projects in South Australia where exploration drilling is scheduled to kick off in Q1 2022.
DMC MINING (ASX:DMM)
Focus: Nickel, Gold
Tentative Listing Date: 22 Dec
WA-based nickel explorer DMC wants to raise $5m through its IPO. It has two projects: ‘Ravensthorpe’ and ‘Fraser Range’.
Ravensthorpe is a nickel and gold project next door to’ (FQM) open-pit nickel mine and the RAV8 sulphide nickel mine. There has been limited historical exploration within the project, DMC says.
The 873sqkm of Fraser Range tenements makes DMC one of the largest junior landholders in the region, which is best known for its company-making Nova nickel discovery.
FALCON MINERALS (ASX:FAL)
Tentative Listing Date: 22 Dec
This hotly anticipated Chalice Mining (ASX:CHN) spinoff will be chaired by Mark Bennett, discoverer of the aforementioned Nova nickel discovery.
Falcon wants to raise between $15m and $30m through its IPO to tackle three projects: Pyramid Hill (VIC), Viking (WA), and Mount Jackson (WA).
Pyramid Hill — CHN’s No 1 focus before it hit the motherlode at Julimar – is highly prospective for high-grade gold deposits like the nearby, world-class Fosterville mine.
Since 2018, CHN has completed ~124km of drilling across the ~5,000sqkm project, defining four large scale prospects.
They include ‘Karri’, which is defined by shallow gold hits up to 34g/t over ~4km of strike, and ‘Banksia’, a giant 10km-long anomaly which returned hits up to 8.7g/t.
ARBARTA RESOURCES (ASX:AB1)
Focus: Gold and Base Metals
Tentative Listing Date: 23 Dec
Arbarta wants to raise between $5m and $7m through its IPO. It has three exploration projects in WA – ‘East Laverton’, ‘England’ and ‘Edward’.
East Laverton sits on~ 1200sqkm of its namesake underexplored East Laverton Greenstone Belt.
Greenstone belts host economic deposits of many minerals — including silver, copper, and zinc — but they are best known for gold.
Edward is also in an area of underexplored greenstone belt on trend to the south of the ‘Marvel Loch’ and ‘Transvaal’ deposits, and ~40km from the Marvel Loch processing facility.
England is next door to the Granny Smith processing facility in Laverton owned by miner Gold Fields. This means any discovery could be developed quickly, it says.
SOLIS MINERALS (ASX:SLM)
Tentative Listing: 24 Dec
The South American copper play is looking to raise $6m in an IPO.
It is already listed on the TSX, so this IPO is designed to “significantly enhance its exposure to investors in the ASX market, which has a dynamic and deep junior resources exploration sector”.
Solis has three large-scale copper exploration projects in Chile and Peru.
The recently acquired ‘Mostazal’ project in Chile has a multi-kilometre porphyry target to be drill-tested this year, underneath a high-grade copper-silver historical resource.
Solis also owns the ‘Ilo Este’ and ‘Ilo Norte’ projects in Peru’s southern coastal copper belt, prospective for porphyry and IOCG discoveries.
VERTEX MINERALS (ASX:VTX)
Tentative Listing: 24 Dec
This gold explorer is looking to raise $5.5m in an IPO. It has four projects: ‘Hill End’ (NSW), ‘Hargraves’ (NSW), ‘Pride of Elvire’ (WA), and ‘Taylors Rock’ (WA).
Hill End is in the region where the Beyers and Holtermann nugget — the largest single piece of reef gold ever discovered — was found. This is the nugg itself:
ANDEAN MINING (ASX:ADM)
Focus: Copper, Gold
Listing: Just before Xmas
Andean (expected code: ADM) seeks to raise up to $7m through its initial public offering that is due to close on 9 December.
Its relatively advanced ‘El Dovio’ copper-gold (with silver and zinc) project in Colombia is a volcanogenic massive sulphide system –deposits that are rich in base and precious metals like copper, zinc, lead, gold, and silver.
Because these deposits tend to ‘cluster’ together, VMS camps – like DeGrussa on Western Australia — can often be mined for a very, very long time.
Nearby VMS projects include producing ‘El Roble’ mine, which has mined ore plus reserves totalling 3.89Mt grading 2.77% copper and 2.44 grams per tonne (g/t) gold, and ‘El Alacran’ (4.8Mt at 1.4% copper and 0.83g/t gold).
El Dovio is also close to other significant mining projects such as AngloGold Ashanti’s 28 million oz gold equivalent (AuEq) ‘Quebradona’ project and Zijin Mining’s 12Moz ‘Buritica’ gold mine. Great neighbourhood.
The post These 18 ASX resources IPOs are due to list in December. EIGHTEEN. appeared first on Stockhead.
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