The week in Canadian markets is ending with a clear separation between the economy and the stocks that track it.
From a return perspective, investors in 2021 have been handsomely rewarded. The S&P/TSX Composite is up by approximately 21.5 per cent since January, a standout result despite the fact that we remain in a pandemic that rearranged our way of life.
The index is down 0.26 per cent as of 9:59 am EST after six straight days of gains, setting high expectations for 2022. This is due to heavy weightings in energy companies and financials, which are set to boost dividends and buybacks next year. These two sectors along with materials are also downtrodden value plays after two years of supply and capital constraints.
Our neighbours to the south have enjoyed even greater portfolio growth with the S&P 500 up 29.3 per cent for the year, including hitting 70 all-time highs. The companies most responsible for the gains, including Apple, Google, Meta and Microsoft, seem largely unaffected by broader macro concerns as they continue on their decade-plus bull run.
The situation is of course not as jubilant on the ground, where COVID cases are again surging due to the Omicron variant and the holidays’ propensity to bring people together.
Under pressure to avoid further lockdowns and protect employers, many governments, such as Ontario’s, have resorted to cutting quarantine down to five days for the doubly vaccinated, though it remains at 10 days at the federal level for all positive cases.
While this measure may keep an economy humming, it is unlikely to keep costs for the everyday consumer under control. For one, Canadians may be faced with higher gas prices as the new year unfolds. As refineries shut down or curtail capacity due to wage demands and employment shortages, this can lead to a premium being placed on available fuel.
Producers are also dealing with higher costs for transport, energy and the re-routing of supply chains that end up being passed on to the consumer. Add to this an expected rise in carbon taxes and a wave of demand from summer travel, COVID permitting, and prices at the pump seem primed to go up.
That said, increases are likely to be much more muted than in Europe, where gas prices have surged over 400 per cent this year due to limited supply.
Gas price projections are in line with Canada’s general inflationary trend. Our economy expanded 0.3 per cent in November – 4.7 per cent annualized – which marks its sixth consecutive month of growth and its official return to pre-pandemic levels. Households have led the majority of this growth, with cost increases concentrated in retail, construction, arts and entertainment, accommodation, food services and auto production.
With more people employed, 186,000 more than in February 2020, to be exact, it makes sense for spending to be up and for an increasing number of industries to find their bearings, but this progress remains contingent, as ever, on vaccination rates and the following of social distancing measures.
While our portfolios are happy to rise up and to the right, they are doing so in an environment where, yesterday, U.S. airlines cancelled over 1,000 flights, and today, WestJet removed 15-per-cent of flights from its daily schedule until the end of January, all due to Omicron concerns and staffing shortfalls on top of uncooperative weather.
Against this touch-and-go backdrop, TMH Canada readers have taken advantage of the last investing week of the year to brush up on opportunities in mining and technology. Let’s take a closer look.
Nubeva (TSXV:NBVA) to release its initial ransomware reversal solution in January 2022
Nubeva plans to begin accepting orders for its ransomware reversal product by the end of January.
The company has expanded its early access program to allow for pre-release testing and evaluations by prospective customers and strategic partners.
The software intercepts copies of encryption keys utilized in an attack.
Nubeva Technologies (NBVA) is up by 40 per cent over the past week trading at $2.03 per share as of 10:35 am EST.
Skyharbour (TSXV:SYH) closes $500,000 private placement
Skyharbour Resources has closed its non-brokered private placement for gross proceeds of C$500,000.
It intends to use the proceeds for exploration and upcoming drilling programs at its numerous uranium projects.
Most of the smaller financing was led by insider participation with an independent director providing the lead order.
Skyharbour (SYH) is up by 2.2 per cent over the past week trading at $0.46 per share as of 10:25 am EST.
NorthWest Copper (TSXV:NWST) to acquire Kwanika Project
NorthWest Copper will acquire POSCO’s 31-per-cent interest in the Kwanika Project in B.C.
It will pay total consideration of $11 million in shares.
The project is located in the prolific Quesnel Terrane and is easily accessible by road from Fort St. James. It hosts two bulk tonnage calc-alkaline porphyry copper-gold deposits that provide the undertaking with critical mass.
NorthWest Copper (NWST) is up by 5.26 per cent over the past week trading at $0.80 per share as of 10:22 am EST.
Stone Gold (TSXV:STG) closes private placement
Stone Gold has closed the second and final tranche of its non-brokered private placement for aggregate gross proceeds of $805,199.84.
The company will use the proceeds primarily for exploration activities as well as for general working capital purposes.
Its properties are located in the hearts of some of Canada’s most prolific gold camps.
Stone Gold (STG) is up by 11.11 per cent over the past week trading at $0.10 per share as of 11:04 am EST.
NEO Battery (TSXV:NBM) shares 2021 highlights
NEO Battery Materials has released a review of its product and business highlights from 2021.
These include plant design and capacity expansion, the establishment of a South Korean subsidiary and advancements of its silicon anode materials for electric vehicle lithium-ion batteries.
It has also signed approximately 20 non-disclosure agreements with globally established industry players in the battery cell manufacturing, materials manufacturing and automotive industries.
NEO Battery Materials (NBM) is unchanged over the past week trading at $0.38 per share as of 10:16 am EST.
On behalf of all of us at The Market Herald Canada, thank you for reading, happy new year, and we’ll see you next Friday afternoon for your look back on the week that was in Canadian markets.
