Your Money - December 18th 2020

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This week, US stocks broke to record highs while the TSX went sideways. In fact when it comes to Canadian stocks, most traded lower this week with just a handful of sectors moving higher. Gold caught another ride but pretty sure it was due to Fed Chair Jay Powell who handed out bags of money like pennies from heaven.  Bullion jumped $46 on the week and silver gained $2. No wonder mining and material stocks did well. Even Copper added 11 cents to break $3.60 a lb. for the first time in years. We have been keeping our eye on Teck Corp because we believe it to be the best run Canadian mining company and with its fingers in copper, metallurgical coal, Zinc and oil production, it is primed for a commodity led rally. Mind you when you look at the companies in the Materials sub index, Teck lags most of the other players in the space.  The top winners were mostly silver stocks.

Then again, logic often is not used when buying Canadian resource stocks. Crude oil topped $49 this week, the first time since late February and yet many of the bell weathers sold off this week. CNQ down 3%, Cenovus down 4% and Suncor down 6%. South of the border, Exxon Mobile (no longer a Dow 30 stock) dropped 2% and Chevron fell over 5%. Go figure.

Next week, might see the rally fall off the rails if a stimulus package is not ratified, leaving many Americans suffering not only financially but mentally. The Covid crisis continues to eat away at the confidence of middle America and it is a shame that Politicians would rather bicker and quibble rather than help out its citizens.

Today was the last trading Friday of the year and aside from the Tesla mania on Wall Street, action may be more muted as year-end tax loss selling winds up. On the economic front, we will get inflation and employment data both of which are not likely to spur a run in or out of the bond markets. We will leave that to the New Year after the Biden inauguration and the State of the Union address. By that time Wall Street will have a better picture of the Democrats tax and spend policies.

Happy Trading and Stay Safe.

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Steve Bokor

Steve Bokor

Portfolio Manager