Canadian investors ended the week on an optimistic note amid tech layoffs and strong retail sales data.
The TSX closed up by 0.80 per cent, securing its third-straight week of gains, on the heels of Canada’s retail sales falling 0.1 per cent in November from October, led by lower sales in food and beverage, building materials, garden equipment and supply dealers. Statistics Canada expected sales to fall by 0.5 per cent. Core retail sales fell by 1.1 per cent, the largest decline in 11 months.
Retail sales added 0.5 per cent in December, according to today’s preliminary estimate from Statistics Canada. Coupled with a 1.3-per-cent gain in October, Canadian consumers held up relatively well throughout Q4 2022.
Consumer strength and 5 per cent unemployment are seen as mere delays to a consumption-led recession in the first half of 2023 as monetary policy reaches the economy at large.
Supporting these recessionary fears, the Bank of Canada’s (BoC) recent business outlook and consumer expectations surveys showed firms losing confidence and consumers tightening their budgets.
Given central banks’ global fight against ballooning prices, the rising premium on cash, global commerce’s post-pandemic shift from goods to services, and a deterioration in the appeal of long-term assets, technology companies are facing diminished valuations and cutting costs through layoffs to maintain guidance.
Layoffs include 12,000 at Google, 18,000 at Amazon, 10,000 at Microsoft, 300 at Lightspeed, 150 at Clutch and 70 at Hootsuite.
Canadian tech stocks ended the day up by 2.4 per cent, led by Shopify (5.59 per cent) and Hut 8 Mining (14.41 per cent).
While more favourably priced opportunities are surfacing in tech, commodities are still holding court despite recessionary concerns, thanks to their hedge against inflation and post-pandemic demand far outweighing ex-Russian supply.
Materials stocks added 0.96 per cent, helped by gold’s 0.3 per cent gain, while energy stocks closed higher by 0.5 per cent, tracking oil’s 1.46 per cent jump.
Consensus is betting on a 25-basis-point hike from the BoC on January 25th, which would bring its benchmark interest rate to 4.5 per cent, the highest since 2007.
After peaking at 8.1 per cent in June, YoY inflation dwindled to 6.3 per cent as of December’s reading.
The BoC will release its quarterly monetary policy report on Wednesday, detailing the prospects of hitting its 2-per-cent inflation target, despite the outsized role of external factors, such as energy prices, on falling price pressures.
Acutely aware of the uncertainty lingering in global markets, TMH readers opted to place their eggs in multiple baskets this week, favouring stories in logistics, uranium exploration and semiconductor technology brimming with upside potential.
Mullen Group announced that the company’s board has approved a budget and business plan for 2023.
Priorities for the dividend all-star include investing in the business, pursuing acquisitions and driving process improvements.
Senior Operating Officer Richard Maloney met with Sabrina Cuthbert to discuss the news.
Mullen’s presence across transportation, logistics and warehousing services, as well as its presence in the energy, mining, forestry, environmental, utility, telecom and construction industries, afford it a moat against market volatility in line with long-term value creation.
Mullen Group (MTL) closed down by 10.33 per cent over the past week, trading at $13.71 per share.
Fission Uranium (TSX:FCU) announces economics for Patterson Lake South property
Fission Uranium announced the results of a feasibility study on its Patterson Lake South property in the Athabasca Basin.
Highlights include a mine life of 10 years, LOM production of 90.9 million lbs. of U3O8, an after-tax NPV of $1.204 billion at an 8 per cent discount, and an after-tax IRR of 27.2 per cent with a very low OPEX of $13.02/lb.
Patterson Lake South hosts the Triple R deposit, the region’s largest high-grade uranium deposit at shallow depth.
President and CEO Ross McElroy spoke with Sabrina Cuthbert about the results.
Fission is run by expert practitioners with extensive experience in the uranium industry, which positions its tier-1 assets for development enhanced by the rise of clean nuclear energy toward accretive shareholder value.
Fission Uranium (FCU) closed up by 2.91 per cent over the past week, trading at $0.88 per share.
POET Technologies (TSXV:PTK) (NASDAQ:POET) announces collaboration with ADVA
POET (PTK) has developed multi-engine 100G CWDM4 and 100G LR4 chip-on-board solutions for lead customer ADVA Optical Networking SE.
ADVA will use POET’s chips in a pluggable solution with the functionality of four independent 100G bit/s interfaces in a single QSFP-DD housing.
POET plans to ship beta samples to ADVA in Q1 2023, with production targeted for the second half of 2023.
Vivek Rajgarhia, President and General Manager, joined Sabrina Cuthbert to discuss the news.
This is an exciting time for the company, given its recent production milestone, as well as a NASDAQ listing earlier last year to accommodate prospective institutional capital and expand the visibility of its Optical Interposer platform.
POET’s technology promises to enable the data size and speed requirements that will differentiate next-generation leaders in AI, telecom, wearables and Internet of Things from also-rans.
According to LightCounting, the market for 100G CWDM4 and LR4 pluggable transceivers will be approximately $700 million annually from 2023 to 2027.
POET Technologies (PTK) closed up by 25.81 per cent over the past week, trading at $7.41 per share.