As the festive season approaches, concerns have emerged among investment houses regarding the anticipated Santa Claus Rally, which has yet to materialise. Market watchers, including brokers, investors, traders, and portfolio managers, have noted a prevailing sense of unease as December unfolds with little movement in the major North American markets, which are largely flat to down. Notably, the NASDAQ saw only modest gains, closing the week at a new high of 20,174.
Market dynamics have been impacted by a combination of economic indicators and sector performance. The TSX Venture Exchange, which is often overlooked, has remained resilient amid the annual tax loss selling season, nearly matching its yearly high of 622 established in October.
Among the companies under scrutiny, Imperial Metals Corp. experienced a significant decline, closing at a two-year low of $1.86. Meanwhile, Mandalay Resources Corp. saw a positive upswing, with shares rising by 8.18% to a 7.5-year high of $4.76 following an optimistic production guidance announcement for gold and Antimony for 2025.
Collective Mining Ltd. also enjoyed a rally, as its shares climbed by 5.93%, reaching an 11.25-year high of $5.72. This followed the release of promising drill hole assays from the Apollo System of its Guayabales Project in Colombia. In contrast, Lion Electric Co. filed for protection under the Companies’ Creditors Arrangement Act (CCAA), reflecting ongoing challenges facing the electric vehicle market.
Positive developments for Torex Gold Resources Inc. saw stock prices rise by 7.16% to $29.05 as production resumed at its Morelos Complex in Mexico after previously imposed mining suspensions were lifted. Similarly, Skeena Resources Ltd. achieved a critical regulatory milestone, securing a Bulk Technical Sample permit from the British Columbia Ministry of Mining and Critical Minerals.
However, not all news was positive. The U.S. Federal Reserve's indication that future interest rate cuts might be limited sparked concerns among investors. As a result, the U.S. Dollar Index closed at a two-year high of 108.40, while the CBOE Volatility Index surged to a four-month high of 27.62. This environment contributed to significant declines in precious and industrial metal prices, with silver falling to a three-month low of $29.05 per troy ounce, and uranium reaching a 13-month low of $73.85 per pound.
In Canadian markets, notable shifts included the Canadian dollar falling to a 4.5-year low and Baytex Energy Corp. shares declining to a 3.25-year low. In contrast, natural gas prices climbed to a 14-month high, amidst a flat rig count in American drilling operations, indicating a complex and shifting energy landscape.
This week’s trading culminated in substantial losses for North American equity markets: the Dow Jones Industrial Average fell by 2.20%, the S&P 500 dropped by 1.98%, and the NASDAQ decreased by 1.78%. In Canada, the TSX showed a similar trend, losing 2.67% while the TSX Venture fell 3.45%. The volatility index reflected heightened uncertainty, gaining 32.95%.
As the markets close ahead of the holiday season, traders navigate a complex backdrop of economic data, sector performance, and external factors, setting the stage for potential shifts in strategy for the coming year.
Source: Noah Wire Services