The TSX has been on a steady climb since a sharp drop mid-Monday morning.
The index was down 0.16 per cent as of 2:27 pm EST on weakness in technology, while gains in oil reflected investor unease at the lack of progress with Russia-Ukraine peace talks.
Hopes were high on Tuesday as the two sides met in Istanbul – when Russia promised to decrease military operations around Kyiv and northern Ukraine – but have since dampened after no breakthroughs emerged from the discussions.
Ukraine’s President Zelensky stated that positive signals from the talks “do not drown out the explosions of Russian shells,” as attacks on Kyiv continue, and invading forces amplify their efforts to take over Ukraine’s pro-Russian Donbas region.
The war has cost the two countries tens of thousands of innocent lives, as well as stoked inflationary pressures, already reeling from the world’s rebound from the COVID pandemic, with Germany on the edge of a recession due to its reliance on Russian energy.
Germany recently initialized an emergency plan in case Russia cuts off its gas supply due to Putin’s demand that buyers pay for its fuel in rubles. The currency has rebounded somewhat since the beginning of the war from US$0.0072 to just over US$0.01.
Russia is considering the expansion of this demand to other commodities such as grain, oil and metals to increase it waning international leverage. The country’s oil production is slightly down, falling below 11M barrels per day in the second half of the month, while deliveries to refineries decreased 11 per cent.
WTI was up 3.21 per cent to US$107.60 per barrel as of 2:46 pm EST, spurred on by a U.S. government report about high gas prices potentially depressing demand as we ramp up toward peak summer consumption. U.S. gasoline demand has fallen for three straight weeks.
The WTI benchmark has averaged a US$9 range for the month.
Brent crude was down 0.4 per cent as of 2:59 pm EST having moved by US$5 or more in 23 of the last 24 sessions.
OPEC+ is scheduled to meet on Thursday to solidify its policy for May. Consensus is that the cartel will institute only a modest increase in output, as it has no economic incentives to encourage lower prices.
Sticking with commodities, Canada’s cannabis producers are keeping eyes on the U.S. House of Representatives today as it debates federal legalization.
The meeting is meant to act as a foundation for a Thursday debate and a vote as early as Friday on New York Representative Jerry Nadler’s Marijuana Opportunity Reinvestment and Expungement Act.
Both the House and the Senate will have to pass the bill before it can be signed by President Biden, setting the stage for cannabis’ declassification as a controlled substance.
The U.S. cannabis market, almost 10 times the size of Canada’s, offers enticing expansion potential for major players like Tilray and Canopy, which have already made U.S. acquisitions in preparation.
In other noteworthy headlines:
- Athletic clothing giant LuluLemon reported a 42-per-cent jump in revenue YoY, causing the stock to spike 11 per cent. Shares had fallen roughly 40 per cent since November last year
- Dollarama announced the introduction of C$5 items to counteract inflation and increase product diversity. The stock was up 3.6 per cent on the news
- Kinross Gold is in talks to sell its Russian assets pending government approval. The company employs more than 2,000 people in the country, where it has been operating for over 25 years
The TSX closed down by 0.05 per cent after yesterday’s record high. The index is up 3.95 per cent year-to-date to the U.S. market’s 4.05-per-cent loss.
Gold has remained relatively flat over the past few weeks, while Canadian government bond yields have risen steeply, as global turmoil muddles risk sentiment.
Market movers
So far this week, our readers have kept a diversified perspective on the Canadian investment landscape with a focus on tech, metals and health care:
Osisko Metals signed an option agreement to acquire the Gaspé Copper Mine from Glencore Canada.
Zoomd acquired Albert Technologies, a U.S.-based artificial intelligence marketing platform that drives fully autonomous digital campaigns.
Finally, Therma Bright submitted its AcuVid COVID-19 Rapid Antigen Saliva Test for the FDA’s Emergency Use Authorization.
Capital raises this week include: Los Andes Copper, Osisko Development, Aurania, Sugarbud, Pancontinental and The Limestone Boat Company.
