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7 @ 7:00 - BullMarketRun.com

November 12, 2018

7 @ 7:00

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1. Gold has traded between $1,203 and $1,211 so far today, touching a fresh 4-week low…as of 7:00 am Pacific, bullion is off $an ounce at $1,204…Silver has retreated another 12 cents to $14.04…Copper, Nickel and Zinc are all off slightly at $2.75, $5.15 and $1.15, respectively…Cobalt is steady at $24.72…Cobalt prices reacted bullishly late last week to Glencore’s announcement that exports of Cobalt hydroxide from its Katanga Copper-Cobalt mine in the DRC have been halted due to high levels of Uranium…a $25 million ion-exchange plant to remove the radioactivity will not be completed until the end of June next year, and it’s projected to take until the end of 2019 before all production is processed and sold…Crude Oil has rebounded 47 cents to $60.66 after some encouraging words from Saudi Arabia regarding potential production cuts as early as next month…the Dollar Index, meanwhile, has pushed above 97, up one-third of a point at 93.34…Chinese Premier Li Keqiang said today that Beijing will further open up its economy in the face of rising protectionism as he headed for meetings with Asia-Pacific leaders in Singapore…

2. The greenback jumped to around its highest level in a year-and-a-half today, propelled by expectations for higher U.S. interest rates and an uncertain political landscape in Europe…last week, the dollar got a lift after a gauge of U.S. business prices surged in October with producer prices increasing the most since late 2012…that helped support expectations for the Federal Reserve to continue raising interest rates after the central bank last week offered a mostly upbeat assessment of the economy…traders are betting that economic data later this week will remain supportive of the dollar…the Labor Department releases October inflation and real earnings figures Wednesday while the Commerce Department will provide retail sales data for October on Thursday…today’s biggest gains for the dollar came against the British pound and the euro in a critical week for both Brexit negotiations and the Italian budget…the dollar was also stronger against the Chinese yuan amid ongoing tensions over U.S. and China trade and security issues…

3. Oil prices climbed out of the red this morning after weeks of losses that had wiped out all of Crude’s gains for 2018 after Saudi Arabia’s energy minister said OPEC and its allies, who meet next month in Vienna, may need to cut Crude production by about 1 million barrels a day to prevent the market from swinging into oversupply…the alliance of roughly 2 dozen producers have cut their output since January 2017 in order to drain a global Crude glut…they agreed in June to restore some of that production as supplies tightened and balance appeared to return to the market…however, Crude prices have plummeted around 20% since reaching 4-year highs at the start of last month amid signs of weakening global Oil demand and another surge in U.S. shale supply…

4. The revenue of one of Canada’s biggest licensed marijuana producers jumped 260% in the 1st quarter of the new fiscal year – more than triple what it was a year ago…Edmonton-based Aurora Cannabis (ACB, TSX) raked in $29.7 million in revenue in the 3 months ending September 30, approximately $10 million more than the previous quarter…gross margin on cannabis of 70% was up 12% points compared to the 1st quarter of 2018, and down slightly by 4% points compared to Q4 2018Aurora also spent almost $30 million on sales and marketing in preparation for the legalization of recreational weed, a number that was 700% more than its marketing budget just a year ago…Aurora showed an operating loss of $112 million in the period that ended September 30…however, it posted earnings of $104 million, largely due to gains on investments in 2 other cannabis firms…

5. Investors are pumping more money into shorting pot stocks, despite the fact that doing so has resulted in estimated year-to-date losses of $892 million (U.S.), according to a United States firm that specializes in short-selling research…Ihor Dusaniwsky, managing director for predictive analytics at S3 Partners, says investors have spent $1.4 billion shorting cannabis stocks in the United States and Canada since mid-year, but that they are struggling to find winning names.  “There is no cannabis short that is making more than $20 million, but there are several that are losing over $100 million,” Dusaniwsky said…investors are nevertheless continuing to test the sector because they believe it is “flying too close to the sun” and is due for a reversal…so far this year, Canopy Growth (WEED, TSX) is up more than 73% while shares of Tilray (TLRY, NASDAQ) have soared 541%…according to S3’s data, Canopy, Aurora Cannabis and Tilray are the top 3 companies being shorted when combining the short interest in dual-listed shares…

6. The Dow is off 213 points through the first 30 minutes of trading…a decline in Apple shares, a strong dollar and lingering worries about global trade offset positive news on the dealmaking front…in Toronto, the TSX is down 62 points while the Venture has fallen 4 points to 647Agrios Global Holdings (AGRO, CSE) began trading on the CSE this morning…AGRO is a data analytics driven agriculture technology and services company advancing the latest innovations in indoor growing science…the company owns, leases and manages properties and equipment for eco-sustainable agronomy and provides advisory services to support all aspects of aeroponic cultivation in the cannabis sector…Agrios is actively pursuing new opportunities to expand its portfolio of tenant growers and infrastructure assets in strategic licensed jurisdictions…

7. What a messed-up system:  TransCanada Corp. says it remains committed to its long-delayed, often-challenged $10-billion Keystone XL pipeline even after a U.S. federal judge blocked the project late last week…District Court Judge Brian Morris, a liberal appointed by Obama, issued an injunction Thursday preventing either Calgary-based TransCanada or the U.S. federal government “from engaging in any activity in furtherance of the construction or operation” of the Keystone XL pipeline…Morris’ ruling said the U.S. State Department’s analysis “fell short of a hard look” at potential spills, likely impact on Native American cultural resources, cumulative emissions from Keystone XL and other Oilsands pipelines and how a change in Oil prices would affect the viability of the pipeline…President Trump didn’t mince words about the decision, appropriately calling it a “disgrace”…legal experts believe TransCanada has 3 avenues for the project: 1) the State Department could try to address the “deficiencies” the judge indicated in the ruling; 2) appeal the decision to a higher court; or 3) Congress could try to pass a law enabling the project’s construction…in any event, it all adds up to further significant delays for this critical project thanks to climate change extremists…

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