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January 11, 2025

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S&P 500 Earnings 2024 Q3: Still Overvalued

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S&P 500 earnings are in for 2024 Q3, and here is our valuation analysis.

The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line), a fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). Annotations on the right side of the chart show where the range is projected to be based upon earnings estimates through 2025 Q3.

Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued since 1992, and it has not been undervalued since 1984. We could say that this is the “new normal,” except that it isn’t normal by GAAP (Generally Accepted Accounting Principles) standards.

We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through September 2025. Keep in mind that the P/E estimates are calculated based upon the S&P 500 close as of December 31, 2024. They will change daily depending on where the market goes from here. It is notable that the P/E remains outside the normal range.

The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q3.

This DecisionPoint chart keeps track of S&P 500 fundamentals, P/E and yield, and it is updated daily — not that you need to watch it that closely, but it is up-to-date when you need it.

CONCLUSION: The market is still very overvalued and the P/E is still well above the normal range. Earnings have ticked up and are projected to trend higher for the next four quarters. Being overvalued doesn’t require an immediate decline to bring valuation back within the normal range, but high valuation applies negative pressure to the market environment.

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Technical Analysis is a windsock, not a crystal ball.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

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The Best Five Sectors, #2

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The composition of the top five sectors remains unchanged this week, despite an interrupted trading week. This stability comes against a backdrop of mixed signals and potential defensive rotation in the broader market. Let’s dive into the details and see how these sectors are holding up.

  1. XLY, Consumer Discretionary
  2. XLC, Communication Services
  3. XLF, Financials
  4. XLK, Information Technology
  5. XLI, Industrials

Performance-wise, our equal-weight portfolio of these sectors is down 0.66% against SPY, which itself is down 0.44%. (Note: This analysis is based on data about an hour before market close on Friday, January 10th. Any significant shifts after this time will be addressed in a weekend update if necessary.)

Sector-by-Sector Analysis

Consumer Discretionary: Strong Despite Decline

Consumer Discretionary remains well above its breakout level, which took out the peak of 2021. As a result, the sector has some room to decline — say, back to the support area around 210 — without harming the uptrend. This resilience keeps Consumer Discretionary in a very strong position despite the current price decline.

Communication Services: Promising but Precarious

The Communication Services sector is holding up from a relative perspective. While the relative strength line and RRG lines are still positive, the RS momentum line is stalling. This is causing the tail on the RRG to roll over, albeit still inside the leading quadrant.

The biggest concern for XLC comes from the price chart. After breaking out in November 2024, the sector is dropping back into the boundaries of its old rising channel. In my experience, when price retreats into a rising channel after an upside breakout, it often tests the lower boundary. For XLC, this could mean a drawback to around 90-92.5 — a support area marked by the rising support line of the old channel.

Financials: Breaking Down

XLF, after a few weeks of consolidation, now seems to be breaking a rising trend line. It’s also close to taking out the previous low around 47.60. If we close below this level on the weekly chart, we’ll have a confirmed lower low and lower high in place for XLF — opening up the downside towards the first support level around 46.

Relative strength for XLF is dropping back below its previous resistance level, which should have acted as support, but isn’t. This is causing the RRG lines to roll over, with XLF’s weekly tail close to crossing from leading into the weakening quadrant.

Technology: Stable but Facing Resistance

The technology sector has remained relatively stable, trading in a condensed area with high volatility over the last 2-3 months.

XLK hasn’t managed to break above the resistance just above 240, which is therefore becoming increasingly heavy. However, it’s still within its rising channel, with potential support of around 222. XLK’s relative strength remains stable, slightly moving higher within its trading range, which is causing both RRG lines to move higher.

With RS ratio below 100 and RS momentum above 100, XLK’s tail is inside the improving quadrant with a positive heading — which continues to make it one of the better sectors.

Industrials: On the Edge

The industrial sector, still number 5 on our list, is testing the lower boundary of its rising channel. So far, it hasn’t broken down.

Relative strength is slowing down, continuing the trend from last week. The tail is still inside the weakening quadrant heading for lagging, but the price decline seems to be stalling at the current level.

Industrials is on the edge — a definitive break out of the rising channel would add to its weakness and lead to even weaker relative strength. For now, though, it’s holding above support despite the loss of relative strength.

RRG Analysis: A Mixed Picture

It’s interesting to note that on the RRG for all sectors, our top five are located either in the leading quadrant (XLY, XLC, XLF), the weakening quadrant (XLI), or the improving quadrant (XLK). All other sectors are inside the lagging quadrant, none with a positive heading.

This RRG isn’t the strongest I’ve ever seen, but it’s all a relative game — and that’s what this experiment is about. We’re trying to beat the S&P 500, so we need to be in the sectors furthest to the right, preferably with a strong heading.

Daily RRG: Signs of Defensive Rotation

When we look at the daily RRG, the picture shifts. While XLC, XLK, and XLY are still furthest to the right (albeit without the strongest headings), XLI and XLF are inside the improving quadrant, rapidly heading towards leading. A quick analysis of other sectors shows Utilities (XLU), Health Care (XLV), and Energy (XLE) rapidly approaching the leading quadrant — indicating a more defensive rotation in the near term.

What’s Next?

The daily RRG’s defensive rotation is translating into a weaker chart for SPY. I’ll be creating a separate article focusing more on the development in the S&P 500 to keep it distinct from this “Best 5 Sectors” series. Be on the lookout for that additional analysis shortly.

#StayAlert and have a great weekend. –Julius

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S&P 500 Breakdown Alert! Downside Targets Explained

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S&P 5850 has been the most important “line in the sand” for stocks since the pullback from the 6000 level in November 2024. With the SPX closing below that 5850 level on Friday, we see further corrective pressures with the 200-day moving average as a reasonable downside target. Today, we’ll break down a series of projection techniques that have helped us hone in on this potential area of support.

The Break of 5850 Completes a Head-and-Shoulders Top

One of the most widely-followed patterns in technical analysis, the fabled head-and-shoulders topping pattern, is formed by a major high surrounded by lower highs on each side. After the S&P 500 established a lower high in December, we immediately started looking for confirmation of this bearish pattern.

To confirm a head-and-shoulders top, and initiate downside targets on a chart, the price needs to break through the “neckline” formed by the swing lows between the head and two shoulders. While price pattern purists may advocate for a downward-sloping trendline to capture the intraday lows of the neckline, I’ve been focused on the price level of SPX 5850. As long as the S&P remained above that level of support, then the market could still be considered in a healthy bullish phase. But a close below the 5850 level on Friday tells me that this corrective move may just be getting started.

Let’s consider some ways to identify a potential downside objective, first using the pattern itself.

Calculating a Minimum Downside Objective

As delineated in Edwards and Magee’s classic book on price patterns, you can use the height of the head-and-shoulders pattern to identify an initial downside objective. Basically, take the distance from the top of the head to the neckline, and then subtract that value from the neckline at the breaking point.

Based on my measurements on the S&P 500 chart, this process yields a downside target of right around 5600. It’s worth noting that Edwards and Magee considered this a “minimum downside objective”, implying that there certainly could be further deterioration after that point has been reached.

Now let’s consider some other technical analysis tools that could help us to validate this potential downside target.

A Confluence of Support Confirms Our Measurement

If we create a Fibonacci framework using the August 2024 low and the December 2024 high, we can see a 38.2% retracement around 5725, which lines up fairly well with the swing low from late October. Perhaps this could serve as a short-term support level during the next downward phase?

As I review the chart, however, I’m struck by the fact that the 50% retracement lines up almost perfectly with our price pattern objective. Many early technical analysts, including the infamous W.D. Gann, favored the 50% retracement level as the most meaningful to watch.

You may also notice that the 200-day moving average is gently sloping higher, rapidly approaching our “confluence of support” around 5600. Given the agreement between multiple technical indicators on this price point, we consider it the most likely downside target given this week’s breakdown.

I would also point that while I feel that identifying price targets can be a helpful exercise, as it gives you a framework with which to evaluate further price action, the most important signals usually come from the price itself. How the S&P 500 would move between current levels and 5600 may tell us a great deal about the likelihood of finding support versus a more bearish scenario in the coming weeks.

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

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Stock Market Panic: Why Strong Jobs and Inflation Signal Trouble Ahead

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December non-farm payrolls data came in much hotter than expected. More jobs were added, the unemployment rate dipped slightly, and average hourly wages rose. Overall, it was a solid employment report, but the stock market didn’t like the news. Throw in the rise in inflation expectations to 3.3% in January as per the University of Michigan Survey of Consumers, and you get a scenario that points to fewer interest rate cuts from the Federal Reserve in 2025.

Investors don’t want to hear that.

Equity futures fell in pre-market trading, and the broader stock market indexes continued in that direction in the first half hour of regular trading hours. Since then, it has been a choppy day, with the broader indexes closing the day lower.

The Weakness Spreads

Inflation and fewer interest rate cuts sent investors into selloff mode. The S&P 500 ($SPX) closed at 5,827.04, down 1.54%, which brings the index below its November lows (dashed blue line in the chart below). The index closed a tad bit above the support of its 100-day simple moving average (SMA).

FIGURE 1. DAILY CHART OF THE S&P 500 INDEX. The index closed below its November lows and just a hair above its 100-day SMA. Market breadth is also weakening, as seen by the breadth indicators in the lower panels.Chart source: StockCharts.com. For educational purposes.

Market breadth indicators, such as the NYSE Advance-Decline Line, the percentage of S&P 500 stocks trading above their 200-day moving average, and the S&P 500 Bullish Percent Index, are trending lower. Also, notice the series of lower highs and slightly lower lows.

The Nasdaq Composite ($COMPQ) is trading below its 50-day SMA and has a series of lower highs and lower lows (see chart below).

FIGURE 2. DAILY CHART OF THE NASDAQ COMPOSITE. Lower highs and lower lows, a close below the 50-day SMA, and weakening breadth indicators indicate weakness in the tech-heavy index.Chart source: StockCharts.com. For educational purposes.

The Nasdaq Composite Bullish Percent Index ($BPCOMPQ), the percentage of Nasdaq stocks trading above their 200-day moving average, and the Nasdaq Advance-Decline Line are all declining, indicating weakening market breadth.

The S&P 600 Small Cap Index ($SML) was the worst performer, closing lower by over 2%. The chart below shows that the index closed at a key support level, the low of the September to November trading range. This makes it a greater than 10% decline from the November 25 high, which means the small-cap index is in correction territory.

FIGURE 3. DAILY CHART OF THE S&P 600 SMALL CAP INDEX. Small caps have suffered since December and are now at a key support level, which coincides with the low of a previous trading range.Chart source: StockCharts.com. For educational purposes.

Market breadth is weakening in the small-cap index, as indicated by the declining percentage of S&P 600 stocks trading above their 200-day MA and the decline in the Advance-Decline percentages.

Airlines Soar

It wasn’t bad for all industries. The Dow Jones US Airlines Index ($DJUSAR) was the top-performing StockCharts Technical Rank (SCTR) in the US Industries category. You can thank Delta Air Lines, Inc. (DAL) for that. The company reported better-than-expected Q4 earnings and gave a positive 2025 outlook. American Airlines (AAL), United Airlines (UAL), and Alaska Air Group (ALK) rose in sympathy to Delta’s earnings report.

FIGURE 4. AIRLINE INDUSTRY LEADS IN THE TOP 10 US INDUSTRIES SCTR REPORT. Strong earnings from Delta Air Lines helped lift airline stocks. The Dow Jones US Airlines Index was the top performer in the US Industries Top 10 SCTR Report.Image source: StockCharts.com. For educational purposes.

The Pressure of Rising Yields

Treasury yields moved sharply higher on the jobs report news, with the 10-Year Treasury yield reaching a high of 4.79% (see chart below). The last time yields were at this level was in October 2023.

FIGURE 5. DAILY CHART OF THE 10-YEAR US TREASURY YIELD. The 10-year yield rose sharply after the strong jobs data on Friday. Chart source: StockCharts.com. For educational purposes.

According to the CME FedWatch Tool, the probability of the Fed holding rates at the current 2.45%–2.50% in their January 29 meeting is 97.30%.

The US dollar continues to strengthen, an indication the US economy remains strong relative to other countries. Precious metals and bitcoin traded higher, which could be because geopolitical risks could soon be a focal point.

There were many significant moves this week—equities fell, yields rose, and the US dollar continued to strengthen. Volatility is stirring, although, at below 20, it still indicates investors are somewhat complacent. A spike in the Cboe Volatility Index ($VIX) and a breakdown of some of the support levels the broader indexes are hanging on to, could put the US stock market into correction territory. Let’s see if the PPI and CPI move the needle next week.

End-of-Week Wrap-Up

  • S&P 500 down 1.94% for the week, at 5827.04.47, Dow Jones Industrial Average down 1.86% for the week at 41,938.45; Nasdaq Composite down 2.34% for the week at 19,161.63
  • $VIX up 21.14% for the week, closing at 19.54
  • Best performing sector for the week: Energy
  • Worst performing sector for the week: Real Estate
  • Top 5 Large Cap SCTR stocks: Rocket Lab USA, Inc. (RKLB); Applovin Corp. (APP); Amer Sports, Inc. (AS); Credo Technology Group Holding Ltd. (CRDO); Reddit Inc. (RDDT)

On the Radar Next Week

  • December PPI
  • December CPI
  • December Retail Sales
  • December Housing Starts
  • Fed speeches from Barkin, Kashkari, Schmid, Goolsbee

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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Lead Price Forecast: Top Trends for Lead in 2025

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Lead prices rode a wave of volatility in 2024 as global economic uncertainty continued to wreak havoc on metals markets.

As an industrial metal, lead has largely been used in lead-acid batteries, and to a lesser extent in pigments, weights, cable sheathing and ammunition. More recently, the electric vehicle (EV) market has opened up a sector for growth as EV manufacturers need lead-acid batteries to power electrical systems, including lights, windows, navigation, air-conditioning and airbag sensors.

Lead is typically mined as a by-product of zinc, silver and to a lesser extent, copper. Disruptions to the mining and demand profiles for these metals can have a sizable impact on lead sector fundamentals.

How did lead perform in 2024?

Although they started off the year above the US$2,025 per metric ton level, lead prices quickly shot up nearly 8 percent in the first four weeks of 2024 on reduced primary and secondary supplies. While prices had shed those gains and then some down to US$1,963 by the end of March, only to rise to a high for the year of US$2,343 on May 28.

A December report from the International Lead and Zinc Study Group (ILZSG) show that China, which is both the world’s largest producer and consumer of the metal, increased its imports of lead concentrate by 7.5 percent compared to the first 10 months of 2023.

By August 5, lead prices had once again crashed, this time by more than 17 percent to their lowest point of the year at US$1930.

For much of the rest of the year, volatility continued to plague the lead market with price ups and downs swinging within the US$1950 to US$2,150 range.

“Toward the end of the year, following the reelection of Donald Trump as U.S. President, lead prices came under pressure as the U.S. dollar strengthened,” said Solanes.

Ironically, despite the wide price swings, as of December 18, 2024, lead prices are only down by 2.41 percent since the start of the year.

Lead’s price performance in 2024.

Chart via TradingEconomics.

“On the supply front, lead output growth slowed, constrained by high energy prices and supply chain problems in the automobile industry,” according to Solanes.

In the first 10 months of 2024, ILZSG figures show that global supply of lead exceeded demand by 21,000 metric tons. That’s compared to 41,000 metric tons in the previous year.

Worldwide lead mine production rose by 1.5 percent. Lead metal production decreased by 1.7 percent over the same period in 2023, which according to the ILZSG was due to “lower output in China and Canada, where a scheduled maintenance at Teck Resources’ Trail operations impacted production during the second quarter.” Meanwhile consumption of the metal decreased by 1.6 percent.

China, which is both the world’s largest producer and consumer of the metal, increased its imports of lead concentrate by 7.5 percent compared to the first 10 months of 2023.

What factors will move the lead market in 2025?

Heading into 2025, what supply and demand factors are expected to drive prices for lead?

The ILZSG forecasts that global lead mine supply will rise by 2.1 percent in 2025 to 4.64 million metric tons, compared to 1.7 percent growth in 2024. Increased lead supply is seen coming out of the three top lead-producing countries: China, Australia and Mexico.

Looking over at global refined lead supply, the ILZSG sees a 2.4 percent increase to 13.51 million metric tons in 2024; that’s compared to a 0.2 percent decrease to 13.2 million metric tons in 2024.

In terms of demand for refined lead metal in China, ILZSG is forecasting a growth rate of 0.5 percent in 2025 after projected demand growth of 0.9 percent in 2024. Demand in Europe and Mexico is expected to recover in 2025, and continue to rise in India and Vietnam. On a global scale, demand for refined lead metal is forecast to increase by 0.2 percent to 13.13 million tonnes in 2024 and by 1.9 percent to 13.39 million tonnes in 2025.

The ILZSG “anticipates that global supply of refined lead metal will exceed demand by 63,000 tonnes in 2024. In 2025, a much larger surplus of 121,000 tonnes is expected.”

What other key trends and catalysts should investors look out for in the lead market in 2025?

“The strength of China’s industrial sector and stimulus policies in the country, along with the pace of global monetary policy, are key factors to monitor,” advised Solanes.

As the largest consumer of lead, China’s economic health is also a major factor for consideration. The World Bank is forecasting 4.8 percent annual growth in 2024 for China, the world’s second largest economy, and calling for slower growth of 4.3 percent in 2025. The weakest segment of China’s market has been its property sector. Outside of the battery market, lead has several important applications in housing and infrastructure.

“Another relevant topic to track is trade policy under Trump, with the prospect of a Sino-American trade war posing headwinds to prices,” added Solanes.

As reported by Fastmarkets, during LME week, the global metals market gathering held each Fall in London, StoneX senior metals analyst Natalie Scott Gray shared her insight into what’s ahead for the lead market in 2025. Namely, increased mine production as well as demand.

Scott Gray said as copper, zinc and silver mining activity increases for the year, so will lead output as it’s often a by-product metal. Her firm is also forecasting that lead demand will increase by 2.2 percent in 2025 as falling interest rates improve demand for batteries. This would likely bring a slight uptick in lead prices for the year.

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Cobalt Market 2024 Year-End Review

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Cobalt prices started 2024 trading at the US$29,151.50 per metric ton level, the highest price point the battery metal achieved in 2024. By the end of the year prices had contracted by 16.68 percent to US$24,287.90.

Prices remained under pressure due to oversupply, with the Democratic Republic of Congo (DRC) maintaining its dominant position as the world’s largest producer.

Meanwhile, efforts to diversify supply chains and reduce reliance on the DRC gained momentum, with new projects and funding infusions announced throughout the year in Canada, and the US.

On the demand side, the rise of battery chemistries utilizing less cobalt, particularly in electric vehicles (EVs), weighed heavily on consumption. Lithium-iron-phosphate (LFP) batteries continued gaining market share globally, further pressuring cobalt’s role in the EV sector.

However, cobalt’s use in high-performance batteries for smartphones and other electronics remained resilient, offering a counterbalance to declines elsewhere.

Geopolitics and policy added another layer of complexity, with China expanding its influence in African mining regions and Western nations pursuing stricter supply chain transparency laws.

These dynamics are expected to shape cobalt’s role in the critical metals market into 2025 and beyond, as stakeholders grapple with the metal’s evolving importance in a decarbonized economy.

2024 cobalt supply and demand trends

Residual oversupply from 2023 prevented any price positivity in the cobalt market through 2024.

According to the US Geological Survey’s annual commodity report, mine supply of the battery metal ballooned in 2023, growing 16.75 percent year-over-year, from 197,000 metric tons in 2022 to 230,000 metric tons in 2023.

Over the last three years annual mined supply has soared, from 142,000 metric tons to 230,000 metric tons, a 61 percent increase.

170,000 metric tons of 2023’s total was mined in the DRC; the African nation is home to the five largest cobalt mines in the world. These high-grade areas have attracted the attention of Chinese mining companies, particularly China Molybdenum (SHA:603993,OTC Pink:CMCLF), which is one of the largest cobalt producers in the DRC and the world.

In recent years cobalt mining practices in the DRC have come under fire by international rights groups concerned that artisanal and small-scale cobalt mining operations are using child labour.

In October 2024 the US Department of International Labour concluded a six year program entitled Combatting Child Labor in the Democratic Republic of the Congo’s Cobalt Industry (COTECCO).

Key achievements include supporting the creation of an Interministerial Commission to monitor child labor and a provincial commission in Lualaba.

Since its inception in 2018, the project has trained 458 stakeholders from government, civil society, and private sectors on combating child labor and introduced tools like ILAB’s Comply Chain to 28 mining entities in Lualaba and Haut-Katanga.

Additionally, COTECCO collaborated with the DRC government to establish a Child Labor Monitoring and Remediation System (CLRMS), training 110 officials to operate it. By March 2024, the CLRMS database registered 5,346 children and was officially handed over to the Ministry of Mines for sustained management.

Cobalt fundamentals tightly tied to EV growth

Combatting child exploitation in the cobalt supply chain will be paramount as demand from the electric vehicle sector alone is expected to increase by 60 to 70 percent by 2040.

The DRC is projected to play a vital role in supplying the majority of the 214,000 metric tons of cobalt demand expected by 2030.

“It’s hard to understate just how much demand will be added to the cobalt market by the EV industry,” said Roman Aubry, Benchmark Mineral Intelligence Pricing Analyst in an April email. “Already it has become the largest demand sector, and its dominance is only set to grow.”

In 2024, global electric vehicle (EV) sales reached a third consecutive record high, with China leading the surge. The China Association of Automobile Manufacturers reported a 5.3 percent increase in passenger vehicle sales, totaling 23.1 million units, with EVs and hybrids accounting for 47.2 percent of the market—a 40.7 percent rise from the previous year.

Tesla (NASDAQ:TSLA), a dominant player in the EV sector, experienced a 1.1 percent decline in worldwide sales, delivering 1.79 million vehicles compared to 1.81 million in 2023.

This downturn was attributed to increased competition and market saturation. However, other automakers reported significant growth. General Motors (TSX:LAC,NYSE:LAC), for instance, achieved a 50 percent increase in Q4 EV sales, driven by models like the Chevrolet Equinox EV SUV.

Analysts suggest that while Tesla’s sales dip impacted overall market perceptions, the broader EV market remained robust, with traditional manufacturers gaining traction.

Other notable developments in the EV sector through 2024 was the April announcement from Honda (NYSE:HMC) that it would invest C$15 billion to build a comprehensiveEV value chain in Ontario, Canada.

The plans include an EV assembly plant and a standalone battery manufacturing facility. Joint ventures will add a cathode active material processing plant and a separator plant.

The assembly plant aims to produce 240,000 vehicles annually, while the battery facility will have a 36 gigawatt hour capacity.

Government funding supports sector growth

Due to its critical mineral designation the cobalt sector has also been the recipient of government funding.

In May, the US and Canada partnered for a co-investment to enhance the North American critical minerals supply chain. The collaboration will benefit Fortune Minerals (TSX:FT,OTCQB:FTMDF) and Lomiko Metals (TSXV:LMR,OTCQB:LMRMF), with the latter set to receive up to C$7.5 million from the Canadian government, matched by an additional US$6.4 million from the US Department of Defense’s Defense Production Act Investments Office.

The funding is part of the Canada-US Energy Transformation Task Force.

“Canada is positioning itself as a global leader in the supply of responsibly sourced critical minerals for the green and digital economy,” said Jonathan Wilkinson, Canada’s minister of energy and natural resources.

“Through our work with the United States and other allies, we are developing secure critical minerals value chains that will power a prosperous and sustainable future,’ he added.

In August Electra Battery Materials (TSXV:ELBM,NASDAQ:ELBM)secureda US$20 million grant from the US Department of Defense to aid in the construction and commissioning of “North America’s only cobalt sulfate refinery,” located in Ontario.

“Electra is committed to strengthening the resiliency of the North American battery supply chain,” said Electra CEO, Trent Mell. “We are grateful to the US Department of Defense for its support. On issues of national security, there are no borders between Canada and the United States. We are proud to partner with the US Government to build a strong North American supply chain for critical minerals.”

Factors to watch for cobalt in 2025

Despite having several positive catalysts on the horizon, the cobalt market is facing immense pressure from substitution.

The shift toward LFP batteries, which omit cobalt, has drastically reduced demand for the metal in EV battery production. By Q3 2024, LFP batteries dominated 75.2 percent of the market, while nickel-manganese-cobalt (NMC) batteries fell to 24.6 percent, according to S&P Global.

The declining role of cobalt in EV batteries was further highlighted in a correspondence between China’s CMOC (OTC Pink:CMCLF,SHA:603993), the world’s largest cobalt-mining company and Bloomberg in late 2024.

“We predict that EV batteries will never return to the era that relies on cobalt,” said Zhou Xing, a spokesperson for CMOC. “Cobalt is far less important than imagined.”

As coblt’s future in the EV space begins to be clouded with uncertainty, demand persists in consumer electronics segment, which rely on lithium-cobalt-oxide batteries, and in superalloys for aerospace and military applications.

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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5 Best-performing Canadian Pharma Stocks of 2025

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From established players to up-and-coming firms, Canada’s pharmaceutical company landscape is diverse and dynamic.

Canadian drug companies are working to discover and develop major innovations amidst an increasingly competitive global landscape. Rising technologies such as artificial intelligence are playing a role in the landscape as well.

Read on to learn about what’s been driving the share prices of the best performing Canadian pharma stocks.

1. NurExone Biologic (TSXV:NRX)

Press ReleasesCompany Profile

Year-over-year gain: 147.27 percent
Market cap: C$34.08 million
Share price: C$0.68

NurExone Biologic is the biopharmaceutical company behind ExoTherapy, a drug delivery platform that uses exosomes, which are nano-sized extracellular vesicles, to create treatments for central nervous system disorders, spinal cord injuries and traumatic brain injuries. It is a less invasive alternative to cell transplantation, which requires surgery and carries the risk of rejection.

NurExone’s first nano-drug, ExoPTEN, uses a proprietary sIRNA sequence delivered with the ExoTherapy platform to treat spinal cord injuries. ExoPTEN received orphan drug designation from the US Food and Drug Administration (FDA) in October 2023, meaning it has been recognized as a potential treatment for rare medical conditions. The designation makes it eligible for incentives such as market exclusivity and regulatory assistance aimed at accelerating its development and approval.

In December 2024, the company released preclinical results from animal testing evaluating the efficacy of its nano-drug ExoPTEN in restoring lost vision. The lead investigator at the Goldschleger Eye Institute, which collaborated on the study, said the results were ‘extremely encouraging,’ and ‘suggest that ExoPTEN could fundamentally change how we approach conditions like glaucoma and optic nerve trauma.’

2. Cipher Pharmaceuticals (TSX:CPH)

Company Profile

Year-over-year gain: 140.88 percent
Market cap: C$377.18 million
Share price: C$14.26

Cipher Pharmaceuticals is a specialty pharma company with a diverse portfolio of treatments, including a range of dermatology and acute hospital care products. The company has out-licensed some of its offerings as well. Cipher began trading on the OTCQX Best Market under the symbol CPHRF in early 2024.

In addition to its current portfolio, Cipher has acquired Canadian rights to CF-101, a dermatology treatment for moderate to severe plaque psoriasis is currently expected to undergo Phase III clinical trials. The company is also conducting proof-of-concept studies on DTR-001, a topical treatment for removing tattoos.

On July 29, Cipher announced it had signed a definitive asset purchase agreement with ParaPRO for its US-based Natroba operations and global product rights, and the news caused Cipher’s share price to spike significantly. The company’s Q3 2024 results showed a product gross margin from the acquired Natroba products of 85 percent.

3. Satellos Bioscience (TSXV:MSCL)

Company Profile

Year-on-year gain: 88.89 percent
Market cap: C$95.99 million
Share price: C$0.85

Satellos Bioscience is a Canadian pharmaceutical company expanding treatment options for muscle disorders. The company has focused specifically on Duchenne muscular dystrophy, developing therapies to regenerate and repair muscle tissue by targeting the specific biological pathways involved. Its lead candidate SAT-3247 targets a protein called AAK1, which regulates the activity of stem cells that activate and differentiate new muscle fibers.

An acceptance to commence Phase 1 clinical trials of the drug was announced on August 19 and the first patient was dosed on September 18. Analysis of tests conducted on canines, shared on October 1, showed improved muscle morphology and increased muscle regeneration with no adverse side effects.

An update was provided in November, revealing it had begun enrolment for a multiple-ascending-dose arm of the Phase 1 study after no drug-related adverse events were reported in the single-ascending-dose group.

4. Telescope Innovations (CSE:TELI)

Press ReleasesCompany Profile

Year-over-year gain:81.4 percent
Market cap: C$20.39 million
Share price: C$0.39

Telescope Innovations is a chemical technology company that develops scalable manufacturing processes and tools that combine robotic automation, online analysis and machine learning for the pharmaceutical and chemical industries.

The company has commercialized its Direct Inject-LC system. Short for Direct Inject Liquid Chromatography, the system combines hardware and software to analyze chemical reactions and can potentially reduce the time and cost of new drug development.

On July 31, Telescope Innovations entered into a collaborative research agreement with pharma giant Pfizer (NYSE:PFE) to accelerate pharmaceutical research and development using automation, robotics and artificial intelligence.

According to a press release, some efforts will focus on deploying Self-Driving Laboratories, a concept pioneered by Telescope Innovations in which robotic systems carry out experiments while AI algorithms analyze the data in real time to inform researchers about what the next steps should be.

5. Medexus Pharmaceuticals (TSX:MDP)

Company Profile

Year-over-year gain: 46.47 percent
Market cap: C$100.34 million
Share price: C$3.94

Medexus Pharmaceuticals specializes in bringing drugs to treat rare diseases to North America. The company manages the entire process through its fully integrated operations, from acquiring and developing drugs to marketing and selling them. Some of its key products include treatments for hemophilia B and rheumatoid arthritis, as well as a line of drugs for autoimmune diseases like lupus and allergy treatments.

In November 2024, Medexus Pharmaceuticals announced it had successfully negotiated with the pan-Canadian Pharmaceutical Alliance to make treosulfan, which Medexus commercialized in Canada under the name Trecondyv, available to publicly funded drug programs and patients. Trecondyv is indicated as part of conditioning treatment prior to bone marrow transplants in patients with certain types of blood cancers.

In addition to Canada, Medexus has the exclusive commercialization rights to treosulfan in the US, where it currently being reviewed by the FDA for approval. The FDA extended the review period for the new drug application for treosulfan in September and set a new prescription drug user fee act target action date of January 30, 2025.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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Nickel Price Forecast: Top Trends for Nickel in 2025

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The nickel market has faced challenges over the past few years due to a supply glut and weak demand.

Even though the price of nickel surged in the first quarter of 2024, the higher prices didn’t last, and by the end of the year, any gains the base metal made were erased.

Nickel traded in the US$15,000 to US$15,200 per metric ton range at the start of 2025, but what is in store for the rest of the year, and what trends should investors be watching?

Nickel market oversupply to continue in 2025

The primary conditions holding nickel prices from breaking out have been an oversupply situation as Indonesia continues to produce concentrates at record levels. Meanwhile, the demand side hasn’t seen the growth needed to maintain market balance.

“We believe nickel’s underperformance is likely to continue — at least in the near term — amid weakening demand and a sustained market surplus. A surge in output in Indonesia has dragged nickel lower over recent years, and demand from the stainless steel and electric vehicle batteries sectors continues to disappoint,” Manthey said.

Her statements come as China recently introduced measures that will take effect in 2025. These measures, which involve injecting US$1.4 trillion over the next five years, are meant to help the country’s ailing economy.

However, past measures introduced in 2024, particularly those in September, have yet to significantly affect the country’s housing and manufacturing sectors, which are net demand drivers for stainless steel.

Jason Sappor, senior analyst, metals and mining research with S&P Global Commodity Insights, echoed similar sentiments for nickel’s performance in 2025.

“We expect the market to remain oversupplied in 2025, as Indonesia and China’s primary nickel output expands further,” he said.

Sappor also added that prices expected to remain subdued could lead to further output curtailments across the industry. This would be in addition to cuts already made at various operations around the world, particularly those in Oceania.

However, with prices threatening to fall below US$15,000 at the start of 2025, they may fall low enough to cause significant cuts in Indonesia. This could, in turn, make predictions for the overall nickel market over the next year more challenging.

“The latest news reports that Indonesia’s government is considering making deep cuts to nickel mining quotas to boost prices also highlight that the implementation of restrictions on the country’s nickel output should not be ignored as a risk to forecasts for the market to stay in surplus in 2025,” Sappor said.

For her part, Manthey suggests that cuts to supply in 2024 did little to upset the market surplus, but may have also solidified Indonesia’s dominance over the industry.

“The recent supply curtailments also limit the supply alternatives to the dominance of Indonesia, where the majority of production is backed by Chinese investment. This comes at a time when the US and the EU are looking to reduce their dependence on third countries to access critical raw materials, including nickel,” Manthey said.

Will Trump change the Inflation Reduction Act?

One of the biggest factors that could come into play in 2025 is Donald Trump’s return to the White House.

During his campaign, he made several promises that could lead to a shift in the US’ environmental and energy transition policies. These are likely to include reversing commitments made to the Paris Climate Accords and ending tax credits for electric vehicles.

A significant unknown, however, is how he will approach the Inflation Reduction Act (IRA). The program, which was established under the outgoing Biden administration, was designed to stimulate a move away from fossil fuels while also supporting the procurement of a friendly supply of low-carbon nickel.

One part of the IRA, in particular, has made it challenging for Indonesia to gain a foothold in the US market for its nickel exports. Up until now, EVs must meet foreign entity of concern (FOEC) rules to qualify for the US$7,500 tax credits outlined under the act.

The US considers nations like China, Russia, Iran, and North Korea to be of concern. Under rule 30D of the act, these nations cannot control more than 25 percent of the board seats, voting rights, or equity interests of a company that supplies critical minerals for EV batteries destined for the US.

This has been a major obstacle for Indonesia as it has worked to build a trade partnership, which is part of the critical minerals requirement under the act.

Manthey outlined how Trump may seek to tighten rules, making a trade pact with Indonesia more difficult.

“Indonesia has been trying to reduce China-based ownership of new nickel projects to help its nickel sector qualify for the IRA tax credits. Tighter FEOC rules would create more issues for nickel supply chains and would be an obstacle to Indonesia’s goal of expanding its export market to the US,” she said.

Manthey also outlined that if the rules were tightened, primary and intermediate production would continue to be sent to China.

Investor takeaway

Barring any major shift in the supply and demand environment, the price of nickel is unlikely to have any significant gains over the next year. In turn this won’t make the industry supportive for investors in the short term.

“The surplus in the class 1 market is reflected in the rising exchange stocks. Further inflows of Chinese and Indonesian metal into the exchange’s sheds could put additional downward pressure on the London Metal Exchange’s nickel prices,” Manthey said.

She added that the potential upside would be stronger stainless steel output or a restricted ore supply from Indonesia. However, the downside risk of slower growth in the EV markets or the cancellation of some incentives in the US could offset this.

Overall, Manthey isn’t expecting large price movements.

“We forecast nickel prices to remain under pressure next year as the surplus in the global market continues. We see prices averaging US$15,700 per ton in 2025,” she said.

Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.

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Silver Crown Royalties Announces Corporate Update

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(TheNewswire)

TORONTO, ON, January 10, 202 5 TheNewswire – Silver Crown Royalties Inc. (‘ Silver Crown ‘, ‘ SCRi ‘, the ‘ Corporation ‘, or the ‘ Company ‘) (CBOE:SCRI; OTCQX:SLCRF; FRA:QS0) wishes to provide an update on its 2024 progress and 2025 expectations. Based on minimum silver payment obligations, we anticipate receipt of cash payments on 15,180 ounces of silver for 2024 and 36,063 ounces of silver in 2025 on our royalty portfolio.

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Silver Crown Royalties Growth Profile

B acTech Environmental Corp. (‘BacTech’)– Bioleaching Facility in Tanquel, Ecuador

In the fourth quarter of 2024 we closed our first all-equity royalty purchase transaction on BacTech’s future bioleaching facility in Tenguel, Ecuador and issued C$1.0 million of units of the Company (‘ Units ‘) at a deemed price of C$10 per Unit at closing. Each Unit consists of one common share in the capital of the company and one warrant entitling the holder thereof to acquire another common share at a price of C$16.00 for a period of 36 months from closing. BacTech is advancing a bioleaching facility in Ecuador with the expectation of first production within the next two years. Upon full deployment of royalty payments (an additional C$3.0 million in common shares at a deemed price of at C$10.00 per common share) BacTech is to deliver 90% of silver produced or 35,000 ounces per year, for a minimum of ten years, whichever is higher.

BacTech continues to make positive advancements regarding its bioleaching initiatives. Early last year BacTech, in collaboration with MIRARCO Mining Innovation, commissioned a bioleaching pilot plant in Sudbury to test bioleaching processes on pyrrhotite tailings, targeting the recovery of nickel, cobalt, and other valuable by-products. The pilot plant has completed baseline campaigns to ensure operational readiness, with full-scale testing planned to commence shortly. BacTech continues to expand its search for historic mine tailings in northern Peru to potentially supply feed for the Ecuador project or establish a base for a new plant near Trujillo, in northern Peru.

Gold Mountain – Elk Gold Mine, British Columbia, Canada

At the end of the third quarter of 2024 Silver Crown received the C$124,299 minimum royalty payment from Elk Gold Mining Corp. pursuant to the terms of the royalty agreement dated May 11, 2023. Cash payments delivered to Silver Crown pursuant to the terms of the Royalty Agreement now total C$216,296.

Gold Mountain encountered various financial challenges that reflected ongoing operational issues, including commissioning difficulties and delays that impacted production levels at the Elk Mine. These challenges stemmed from grade control and sampling inefficiencies during ramp-up, resulting in lower-than-forecast ore production. To address these challenges, the Company implemented a series of financial restructuring initiatives, that included issuing additional common shares, converting secured debt, raising additional capital by way of a convertible debenture and restructured secured obligations to improve its financial position.

Winter operations commenced in late November of 2024, with a planned return to normal operations by late February. The first phase of infill drilling, focused on the east bench, has been completed, supported by Phase 1 financing for exploration drilling. Currently, mining is focused on the east face of Pit 1, targeting the 1300 series vein system at surface. Construction of a new crushing and ore sorting system is set to begin by the end of the month, with the sorting system expected to significantly improve grades.

Pilar Gold Inc. – PGDM Mine, Goiás, Brazil

The restart of commercial production at the PGDM Complex was delayed from Q3 2024 to Q1 2025. Accordingly, while Pilar de Goiás Desenvolvimento Mineral Ltda. has acknowledged its obligation to make minimum royalty payments during Q3 2024 and Q4 2024, it has defaulted on its obligation to make its minimum royalty payment in the amount of US$81,536.41 for the quarter ending September 30, 2024 in accordance with the terms of the amended and restated royalty agreement dated April 26, 2024 between Silver Crown and Pilar (the ‘ A&R Royalty Agreement ‘). The Company had previously agreed to forbear on enforcement action under the A&R Royalty Agreement pursuant to a letter forbearance agreement whereby Pilar agreed to release the C$100,000 contained in a segregated cash account to the Company and pay the balance of the Royalty Payment for the third quarter of 2024 and replenish the Segregated Cash Account no later than December 31, 2024. However, Pilar failed to pay the balance of the Royalty Payment for the third quarter of 2024 and failed to replenish the Segregated Cash Account on December 31, 2024.

Silver Crown will work in good faith with Pilar to cure the ongoing default and provide a further update to the market as soon as possible.

PPX Mining Corp. – Igor 4 project, Peru

During the fourth quarter in 2024 Silver Crown announced the signing of a definitive royalty agreement for up to 15% of the cash equivalent of silver produced from the Igor 4 project in Peru for an aggregate of US$2.5 million in cash. The first tranche of US$1.0 million is to be paid on closing which is expected to occur in early 2025, with the second tranche of US$1.5 million to be paid within six months of Closing. The Royalty will be payable immediately based on current operations at the Project and, beginning on and from the earlier of October 1, 2025 and the startup of metallurgical operations at the 250 tpd CIL and flotation plant currently under construction, will provide for minimum deliveries of the cash equivalent of 14,062.5 ounces of silver per quarter up to a total of 225,000 ounces. Upon the closing of the second tranche, and upon the delivery of the cash equivalent of an aggregate of 225,000 ounces of silver to Silver Crown, the Royalty will automatically terminate. PPX intends to use the proceeds from the sale of the Royalty together with other sources of financing to complete the construction of the Beneficiation Plan.

Peter Bures, Silver Crown’s Chief Executive Officer commented, ‘We are very pleased to continue our collaboration with PPX and are excited about the opportunities the new year will bring. We have great faith in the company as skilled operators and are happy to support them in achieving their production milestones. We continue to be encouraged with progress at GMTN. Although we are disappointed by the non-payment of the PDGM royalty, we note the minimal impact (~C$14,000) to Silver Crown’s revenues to date as we have set up internal protection against such an eventuality. In the meantime, we have been able to identify numerous opportunities to grow our revenue and will continue to advance such opportunities.’

ABOUT Silver Crown Royalties INC.

Founded by industry veterans, SCRi is a publicly traded, silver royalty company. SCRi currently has four silver royalties of which three are revenue-generating. Its business model presents investors with precious metals exposure allowing for a natural hedge against currency devaluation while minimizing the negative impact of cost inflation associated with production. SCRi endeavors to minimize the economic impact on mining projects while maximizing returns for shareholders.

For further information, please contact:

Silver Crown Royalties Inc.

Peter Bures

Chairman and CEO

Telephone: (416) 481-1744

Email: pbures@silvercrownroyalties.com

FORWARD-LOOKING STATEMENTS

This release contains certain ‘forward looking statements’ and certain ‘forward-looking information’ as defined under applicable Canadian and U.S. securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as ‘may’, ‘will’, ‘should’, ‘expect’, ‘intend’, ‘estimate’, ‘anticipate’, ‘believe’, ‘continue’, ‘plans’ or similar terminology. The forward-looking information contained herein is provided for the purpose of assisting readers in understanding management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements and information include but are not limited to statements with respect to SCRi’s ability to achieve its strategic objectives in the future and its ability to target additional operational silver-producing projects. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual actions, events or results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over mining operations from which SCRi will purchase gold and other metals or from which it will receive royalty payments and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties or interruptions in operations; SCRi’s ability to enter into definitive agreements and close proposed royalty transactions; the inherent uncertainties related to the valuations ascribed by SCRi to its royalty interests; problems inherent to the marketability of gold and other metals; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; industry conditions, including fluctuations in the price of the primary commodities mined at such operations, fluctuations in foreign exchange rates and fluctuations in interest rates; government entities interpreting existing tax legislation or enacting new tax legislation in a way which adversely affects SCRi; stock market volatility; regulatory restrictions; liability, competition, the potential impact of epidemics, pandemics or other public health crises on SCRi’s business, operations and financial condition, loss of key employees. SCRi has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. SCRi undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities of the Company in Canada, the United States or any other jurisdiction. Any such offer to sell or solicitation of an offer to buy the securities described herein will be made only pursuant to subscription documentation between the Company and prospective purchasers. Any such offering will be made in reliance upon exemptions from the prospectus and registration requirements under applicable securities laws, pursuant to a subscription agreement to be entered into by the Company and prospective investors. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

CBOE CANADA DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Copyright (c) 2025 TheNewswire – All rights reserved.

News Provided by TheNewsWire via QuoteMedia

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Greenland leader calls for respect for island’s wish for independence

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Greenland’s leader said on Friday he had not been in contact with incoming US president Donald Trump, who has said he wants control over the Arctic island, and urged everyone to respect Greenland’s wish for independence.

Trump, who takes office on Jan. 20, said this week that US control of Greenland, a semi-autonomous Danish territory, was an “absolute necessity” and did not rule out using military or economic action such as tariffs against Denmark to make it happen.

“We have a desire for independence, a desire to be the master of our own house … This is something everyone should respect,” Greenland Prime Minister Mute Egede said at a joint press conference with Danish Prime Minister Mette Frederiksen in Copenhagen.

This post appeared first on cnn.com

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