Tuesday Markets Review

The oil price did not fall as expected over the White House release of 50 mn bbls of oil because it included not just delivered barrels but also a great number (over a third) of swapped barrels that were not released from the national petroleum reserve. I really wish Pres. Biden would get some better advisors for his economic initiatives because I don't want to again have to deal with my zip code neighbor Donald whom I met when I voted in my local precinct.

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*The result was a nice price hike for the oil sector with Schlumberger Ltd (SLB) up 3.5%; Energy Fuels (UUUU) up 7.94% at the opening after it was also tipped by the Investor's Observer but now it is only up 4.8%; Earthstone Energy (ESTE) up 6.3%; RDS-B up 2.55%; BP up 2.77%. The trouble is that apart from the oil patch other shares were lower because of the oil swap.

*Alternative energy plays also rose: Cameco up 3.62%. CCJ.

*Cement maker CRH is up 3.6% on hopes for using carbon (combined with oxygen extracted from hydrogen) to cut its carbon footprint. While extracting hydrogen from water uses energy, the oxygen can make carbon dioxide which can be used in cement.

*Johnson Matthey got UK funding of pounds 12 mn for a new pounds 50 mn plant to make fuel cells for green hydrogen vehicles just a week after it. JMPLY.


*A gainer today after weeklong drops was Zymeworks of British Columbia, up 2.5%. . ZYME.

*The German Merck won FDA approval for a cancer drug. It is totally independent from our US Merck which did not get approval today. MRK.

*Pfizer lost traction after its CEO claimed that its lightspeed work on a covid-19 medication could be copied for up to 10 more approvals in the next 18 months. PFE.

*The standout riser today is Novocure, up 7.6%.  (NVCR).

*Aurinia (AUPH) fell for a second day after its CEO claimed that its extensive $250 mn fundraising was in the interest of existing shareholders. It's not but he also hinted that the drugmaker which has a drug for lupus is being viewed for takeover by majors. It's also unlikely that he is telling us something new.

*While I think it's still too early to describe how the Omicron variant will react to current covid-19 jabs, BioNTech of Germany says the immune cells in vaccines will work against the new mutation.  Merck said its pill also will work. Alas, the experts at Moderna (the jab we had) disagrees and warns about immunity risks with Omicron.  

*Yesterday many drug companies were boosted because of the new variant, but 2nd thoughts came into play today. TEVA, the Israeli drug firm which has no known covid-19 products, gained 1.68% Monday. Today it is down 2.6%. 

*Abcellera, sold, is being bought by Stanley Druckenmiller. He is part of Berkshire Hathaway.


*Today Scotia Bank reported on its Q4. Being so far north its customers hibernate in the depth of winter so it gives us a good idea of how banks are doing early on. Its Q4 earnings per share hit C$1.97 vs C$1.42 a year ago. Its adjusted earnings topped C$2.10 beating the consensus estimate of C$1.91/sh easily. 

But the revenue numbers missed although they also were ahead from 2020 at CX$7.69 bn. The consensus estimate was C$7.92 bn. The main shortfall cause was an unexpected drop in interest income to C$4.22/sh from 4.27 forecast. This  despite a much  reduced level of credit loss provisions, at C$96 mn whereas last year's was C$330 mn. 

* BNS declared a dividend of C$1/share and also announced a buyback of 2% of its common shares approved by the Canada authorities for C$24 mn starting Dec. 2 for up to one year.


*French Veolia is up 1.4%. VEOEY.

*French nuclear power plants are one way to cut carbon and several smaller eastern European countries want to buy small power plants made in France, however slow delivery may be. However, Germany is totally dagegen. Now British Rolls Royce SMR (for small nuclear reactors) is also offering its goods alongside GE-hitachi and Terra Power (Bill Gates with French pals), and Kepco of South Korea, according to today's New York Times. I am a nuclear booster after living in France and being inviited to launches along the Loire Valley, followed of course by delicious lunches. 

*Azure Power rose despite Morgan Stanley selling nearly half its stake. AZRE is Indian and a leading family there is reportedly in financial trouble. 


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