Calm Markets Day

A bit calmer in markets today. Despite seriously disappointing April jobless numbers, markets are gaining all the same. Non-farm payrolls saw 266,600 new hires in April, vs an estimate of 1 mn hires. The unemployment rate went to 6.1% from estimates earlier at 5.8%. Moreover, the March hires number of 916,000 was cut because of new data to only 770,000 new hires.

Despite this, markets are upward mobile today. One reason is that the UK Tories won the Hartlepool by-election handily, giving Prime Minister Boris Johnson another parliamentary vote for his majority. He won despite exceeding the budget for decorating the official apartment he shares with his mistress and baby son.

Photo by Annie Spratt on Unsplash

Another reason for markets to rally was the rollout of objections to President Biden's plan to end patent protection from US-Govt-funded covid-19 vaccines to help emerging markets. This was opposed by the European Union and by Asian countries, calling for the White House or the World Trade Organization to preserve drug patents. In fact, voiding the patents would not result in more vaccination material because emerging markets, except for India, do not have the ability to make the drugs themselves.

But the main reason for the rally is that the US Treasury will not be rolling out higher interest rates soon with unemployment still a threat, ending the Janet Yellen scare.

We have a smaller batch of results today than earlier in the week but we are still having to cover a lot of Q1 data.


*Spider Gold Trust, GLD, an ETF, sold gold because its investor base fell along with the price of the yellow metal. This led to a net loss of $7,290,450 in Q1, equivalent to minus $18.97 per share. It also suffered lesser cuts from its gold sales to cover sponsor fees. Net assets fell to $56,387,705 at the end of Q1 vs $71,157,721 at the end of Q4 2020. This perverse effect of a closed-end fund structure is a surprise but follows the by-laws of the 2004 set-up of SPDR. This is another argument for owning gold mines rather than gold funds. GLD rose despite this to $171.96 today. Its price is that of 1/10 ounce of gold which hit $171.82. (Our Kirkland Lake KL stock gained 4.4% at the opening today.)

*Lazard Global Total Return & Income Fund, LGI, rose 1.16% at the opening today after reporting that its NAV fell this week by 0.8%/sh, to $21.08. However, it did beat its index YTD with a 10% rise. Its parent LAZ fell 1.12%.

*Goldman Sachs in an internal memo (which the press got a hold of) revealed plans to create a crypto-currency to help firms get listed. Bank of England Governor Andrew Baily warns that cryptocurrencies have no intrinsic value and investors “should be prepared to lose all their money” when they invest in them.

*New Ireland Fund next week will pay cash to buy up to 25% of the shares of its stock at 98% of net asset value tendered from April 8 to May 13. IRL stock should do better post-tender. The offer is by KBP Global of Boston, the fund manager. I won't tender but to do so send your shares by mail to PO Box 2042; New York NY 10272-2052 or by fax to (718) 234-5001.

Stocks, mostly Canadian

*Algonquin Power & Energy, AQN, today reported Q1 EPS of 20¢/sh, up by a US penny from last year. Sales topped $634.5 mn, up from prior year Q1 of $464.9 mn up 36.5% but were reported earlier.

*Canada's Aurinia Pharma, AUPH, which I own for its lupus nephritis drug Lupkynis, (in memory of a college classmate) now FDA approved, crashed over 18% to a new low, $10.08, after reporting EPS of minus 40 cents vs minus 23 cents a year ago. The stock is volatile because of rumors it is a target for takeover by Astra-Zeneca AZN and it rose 5.5% yesterday. It has copyrighted its conference call of today, a sign of extreme distress or simply carelessness. It aims to get EU drug approval in partnership with Otsuka and trial its drug for adolescents with results in mid-2022.

*China's Sinopharm's coronavirus vaccine was approved by the World Health Organization.

*Cameco in Canada reported on its Q1 but the big news was that the appeal against its income tax bills of 2003-2006 by the Canadian Revenue Agency (their IRS) was denied by the Canadian Supreme Court. Since potential bills and fines amounted to C$1 bn, this is hugely important. CCJ is up 8.43% on that alone and a double in 2021 to date. It also resumed mining at Cigar Lake after shutting it for covid-19 risks.

Actual Q1 data was more mixed, as compared with Q1 2020, reported yesterday here in loonies and IFRS. Revenues were down to C$290 mn from 346 mn a year earlier and the loss per share was 1¢ vs 5¢, boosted by derivatives trades. The price of fuel and uranium was flat from prior year but a non-IFRS loss of 5¢ vs a gain of 19¢ was taken per share. It CCJ then took an adjusted loss of 29¢ vs a gain for the same amount in the prior year. This is too complicated for a mere yankee like me, so I am leaving the subject for now.

*Cenovus Energy reported good progress on integrating its buy of Husky Oil properties in Alberta and Saskatcheway at the start of this year. But the move worries shareholders and the CVE claim that it will deliver $1 bn in synergies this year and $1.2 bn next was not believed. So the shares were down despite production of 770,000 bbls of oil equivalent in the quarter, and fund flows of $1.1 bn, cash from operations of $228 mn, free cash flow of $594 mn, and even net earnings of $220 mn failed to boost the share price. (Data in loonies.) Production rose 59% in Q1 thanks to Husky. A year ago it had a Q1 net loss of $1.8 bn.

The loss this year was from inventory risk management and offset by gains for transport and storage. It also had record production at Liwan Gas (offshore China.) Also worrying, CVE ended Q1 with net debt of $13.3 bn up from $13.1 bn at the start of the year, mostly because of non-cash working capital up $902 mn because of higher accounts receivable. It aims to cut debt by the end of this year to $10 bn or less. Q1 was still a period of lockdown hurting oil prices and refinery output, from which CVE is seeing some recuperation now. The share dropped a half percent to $7.93 on the NYSE but was maintained as a buy by Tudor, Pickering & Holt, and by CFRA.


*Tomra Systems of Norway, maker of recycling and sorting systems, gained 5.83% here with its real ADR, TMRAY. It goes ex-div next week.

*China had another unsuccessful IPO, for insurance tech site Waterdrop, priced at the top end of the range by seller Tencent. The WDH ADR fell 8.5% at the opening here today, being priced for perfection. Now it's off 14.2%. Prosus and Naspers gained 2.9% and 1.91%. PROSY and NPSNY cut their TECHY holdings. Our Asia insurance stock, AAIGF, AIG Hong Kong, rose 3.4% in relief.

*Cement is mixed with Irish CRH up 1.11% and Mexican Cemex, CX, down 0.12%/

Tech & Tel

*Mercado Libre opened up 3.32% more. But Coupang of South Korea fell 2.05%. MELI; CPNG.

*Nio rose 0.64%.

*Tower Semiconductor (US-Israeli) rose 2.6%. TSEM.

*Morgan Stanley analyst Dominick Olszenski published a call (written up by Dow-Jones) to sell Ericsson and buy Nokia. NOK gained 4.52% to hit $5.09. ERIC rose to $13.90 at the open. Vodafone, VOD fell 1%.

*BCE gained 0.41% today. It is a dividend aristocrat paying out nearly 6% in annual dividends traded at a p/e ratio of 23.75x—in loonies. It tends to boost its divvie every year. Its last report for Q1 beat the consensus 57¢ by 4¢ or 6.92%.

*Multichoice which sells ads and cellphone reels in Africa rose 1.9%+.


*TEVA gained 1%+ today because it can also protect its patents.

*BiolineRX of Israel, up 75% last week, fell 7.6% on profit-taking today when Israel was closed. BLRX.
*Novacure Ltd, Israeli but registered in the Channel Islands, is down 0.3% because Israel is closed and over a battle between the UK island and France over fishing rights. This led France to cut electricity going to Jersey. I may be buying. NVCR.

*AZN rose 0.47% on a possible buy noted above.

*Compugen, another Israeli, rose 0.42%. CGEN.

*Enlivex, maker of allocetra which reprograms macrophages to try to stop cancers, gained 0.71%. ENLV.

*Merck, the US drug firm, gained because of Angela Merkel disputing Pres. Biden's plan to remove patents to boost vaccination in the 3rd world. Our Merck is not related to Merck KGA but people get it wrong. MRK.

*Spanish Grifols is up 1.4% because GRFS is an EU company.

*Glaxo rose 1.11% because the UK is also unlikely to waive patent protection for its drug-makers. GSK.

*Zymeworks is up 3.2% because even Canada will not go along with patent removal plans by Pres. Biden. ZYME.

*Novo Nordisk A/S bought its own shares worth DKK2.586 mn from parent Novo Holdings. NVO is reducing its stake in NH.


*Energy Fuels, UUUU, is up 6.4% today as its rare earth plans again scored among analysts. It also gained with CCJ, discussed above.

*BP plc rose a more modest 0.62% on oil price hikes. Shell, RDS-B, gained 1.74%.

*Canadian Solar gained 0.82%. CSIQ is reporting Q1 earnings on May 20. Energy shares are mostly up with the oil price.

*Schlumberger Ltd gained 2.51% hitting $31.5 today. SLB.

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William K. 3 years ago Member's comment

Bank of England Governor Andrew Baily warns that cryptocurrencies have no intrinsic value and investors “should be prepared to lose all their money” when they invest in them. I figured that out when I learned that they were mining bitcoins with computers, including hijacked computers. Nothing of value as the basis for a currency. That is a lot like the current bais of USA currency sinca abaondoning thr gold standard. Our currency values are based on the integrity of the Federal Reserve bank. I think we are in DEEP TROUBLE now.