In response to Wednesday’s 75-basis point interest rate increase by the Bank of Canada, the central Canadian banks increased their prime lending rates by 75 basis points to 5.45 per cent.
Before this, Toronto-Dominion Bank, Royal Bank of Canada, Canadian Imperial Bank of Commerce, Scotiabank, Bank of Montreal and National Bank of Canada had their prime lending rate set at 4.70 per cent.
In its bid to rein in inflation, the Bank of Canada has been raising interest rates. Wednesday’s rate hike had seen the central bank increasing its policy rate from 2.5 per cent to 3.25 per cent, which was a 14-year high and the fifth consecutive increase since it started the tightening in March.
On March 2, 2022, the central bank added 25 basis points to take the interest rate to 0.50 per cent. On April 13, it raised it by 50 points to 1.00 per cent. On June 1, it added another 50 basis points to take the interest rate to 1.50 per cent. On July 13, it increased by whopping 100 basis points or one full point to 2.50 per cent. Then on September 7, it moved it up 75 basis points to its current 3.25 per cent.
Interestingly, the central bank noted that its “quantitative tightening ” policy would continue to fight inflation. “Given the inflation outlook, the Governing Council still judges that the policy interest rate will need to rise further,” its statement said.
On Friday, Statistics Canada released employment figures, which showed that Canada’s unemployment rate rose 5.4 per cent in August, with a loss of 40,000 jobs. The bulk of the job losses was in the public sector. Consecutively, the Canadian economy had lost 114,000 in the past three months.
All this negative news seemed to affect the morale of stock market investors.
However, there was some reassuring news in Canada when the last inflation figure was released some weeks ago, showing that the consumer price index fell slightly in July to 7.6 per cent from 8.1 per cent, mainly as a result of a drop in gasoline prices. It signaled that the economy was recovering from the destabilizing effect of Russia’s invasion of Ukraine, which led to gasoline scarcity and an increase in gas prices.
Between July and August 25, the stock market experienced a rebound, showing that the economy was recovering. However, in the last few days of August and the first week of September, the stock market experienced a downturn. This was attributed to the falling prices of gasoline and gold and the effect of the rush by investors to sell off their shares and make some gains after over a month of bullish trading.
Comfortingly, the stock market has returned to winning ways, with Friday’s trading showing a sharp rise of the index to over 300 points of gain during much of the day.
Interestingly, this week, our investment-prone readers have shown more interest in companies operating in precious and base metals. They seem to trust the store of value that metals represent, whether when the market is bearish or bullish. In recent days, metals have not fared well in the market. But they seem to be coming around. Gold gained over 1 per cent in the past week.
Metals seem to show resilience. Our readers seem to be the attracted by this trait.
Sitka Gold (SIG) released assay results for the first six holes completed at the Blackjack zone from the Phase II summer portion of the 2022 diamond drill program.
The company has completed a total of 16 diamond drill holes for approximately 5,250 metres during two phases of drilling (winter and summer) in 2022.
Director and VP of Corporate Development Mike Burke sat down with Daniella Atkinson to discuss the results.
Sitka Gold Corp was down within the week 18.18 per cent, trading at C$0.18 as at 2:38 p.m. ET.
Blue Sky Uranium (TSXV:BSK) reports assay results from the RC drilling program at the Ivana Deposit
Blue Sky Uranium (BSK) has announced the reverse circulation drilling program resultsat the Ivana Deposit.
The project is located in Rio Negro Province, Argentina.
President & CEO, Nikolaos Cacos sat down with Sabrina Cuthbert to discuss the results.
This tranche of drilling returned 2,042 samples from 209 holes averaging 9.3m depth that tested areas of lower drill hole density at the margins of, and within, the western portion of the Ivana deposit; and tested the potential expansion of the deposit to the west.
Nikolaos Cacos, Blue Sky President & CEO sat down with Daniella Atkinson to discuss the results.
This tranche of drilling returned 2,042 samples from 209 holes averaging 9.3m depth that tested areas of lower drill hole density at the margins of, and within, the western portion of the Ivana deposit; and tested the potential expansion of the deposit to the west.
Blue Sky Uranium Corp. was up 8.11 per cent in the past five days, trading at C$0.20 as at 2:02 p.m. ET.
Avrupa Minerals (TSXV:AVU) options Slivova Gold Project to Western Tethyan Resources
Avrupa Minerals (AVU) has signed an option agreement with Western Tethyan Resources (WTR).
WTR has the option to acquire up to 85 per cent of the Slivova Gold Project by funding and performing certain work programs to potentially advance the Slivova Project to a mining solution.
Avrupa Minerals CEO and Director Paul Kuhn sat down with Sabrina Cuthbert to discuss the news.
Avrupa Minerals is a junior exploration and development company.
Avrupa Minerals Ltd. was unchanged in the past five days at C$0.050.
Make sure to join us next Friday afternoon for a look into the week’s market moving stocks on The Market Herald Canada.
