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The TSX rose today lifted by gains in mining.

Barrick Gold led the sector with a spike of 4.6 per cent after recording a quarterly profit ahead of the average analyst estimate. Copper and gold prices also rose, leading to a sector-wide gain of 2.44 per cent.

The energy sector added 1.2 per cent tracking WTI’s 1.89-per-cent gain and Brent’s 2.52-per-cent gain. The bounce-back follows a week of 10-per-cent losses for the commodity due to demand concerns stemming from a potential global economic slowdown.

Cenovus Energy added 3.43 per cent after announcing the purchase of 50 per cent of a Toledo-based refinery from BP for US$300 million. The transaction makes the company the sole owner and expands its processing capabilities during the highest oil prices in eight years.

Investors will look to shift capital accordingly based on OPEC and the IEA’s monthly reports this Thursday. Chinese crude imports rose in July from four-year lows thanks to easing COVID-19 restrictions but remain 4 per cent lower on a year-to-date basis.

While the TSX’s energy and commodity dominance saw it start the week in the green, the U.S. market was down just under 0.5 per cent by mid-day after Friday’s resilient jobs data presaged further rate increases by the Federal Reserve.

U.S. CPI data this Wednesday will offer investors further insights into monetary tightening, the persistence of price pressures and the likelihood of them surprising to the downside. Yesterday, the U.S. Senate approved the Inflation Reduction Act of 2022, a climate, tax and health care bill that encourages citizens to buy domestic electric vehicles and allocates almost US$400 billion over ten years to combat climate change.

A sign of slowing economic growth, average U.S. retail gasoline prices have dropped for 55 straight days to just over US$4 per gallon.

Canada’s economy is also showing signs of abating growth, with employment declining for the second month in a row. The economy shed 30,600 jobs in July, with unemployment at a historic low of 4.9 per cent.  Wholesale, retail trade, health care and social assistance, and educational services lost 53,000 jobs, offset by the goods-producing sector’s gain of 23,000.

Similar to the U.S., Canadian gas prices have decreased to an average of C$1.672/L from C$1.899/L one month ago. Metals and agricultural commodities have also fallen considerably from recent highs for both countries.

Though these contractions are encouraging from the Bank of Canada’s perspective, analysts believe they’re insufficient to avoid further rate hikes to combat tight supply conditions, unsustainable demand and rising average hourly wages (0.4 per cent MoM, 5.2 per cent YoY).

Consensus is that once growth has slowed due to weaker demand, as opposed to supply-chain constraints, the central bank will take its foot off the hawkish pedal.

In the interim, investors should determine if their companies’ margins can withstand inflationary pressures over the short term.

The TSX closed up by 0.25 per cent cutting its losses to just over 7 per cent year-to-date.

Market movers

In line with mining and materials’ stellar start to the week, as well as the U.S.’s recharging of its efforts against climate change, our readers have zoned in on three stories worth further consideration:

Solar Alliance Energy (SOLR), up 14.81 per cent for the day, has commented on the U.S. Inflation Reduction Act as it moves to the House of Representatives followed by the desk of President Biden.

Mountain Boy Minerals’ (MTB) ongoing exploration program at its Telegraph copper-gold project in B.C. continues to indicate the presence of extensive mineralization.

Finally, Juggernaut Exploration (JUGR) has intersected two mineralized zones in the first step-out drill hole of 2022 on the Goldilocks Discovery.

Capital raises leading the week off include Skylight Health, Solstice Gold and Silver Elephant Mining.

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