Dennis da Silva, managing director and senior portfolio manager at Middlefield Capital Corp
Focus: Resource stocks

MARKET OUTLOOK

North American markets started the year on a tear as investors took the markets to all-time highs on the back of an expected rebound in corporate earnings. It is fair to say that the impact of the coronavirus on market sentiment goes beyond the actual potential impact on the global economy. The extreme volatility we have experienced over the last week will likely continue until we see more concrete signs that the virus’ spread is slowing globally and in terms of new cases in existing infected areas. Economically sensitive commodities such as copper or oil have borne the full brunt of investor concerns about the virus’ impact on demand. Last Friday, the traditional safe haven of gold was not immune from the market’s wrath as it fell almost 5 per cent from its seven-year peak a week earlier. More importantly, gold equities declined almost 14 per cent to 10-week lows while bullion is back to where it was just two weeks ago. With sharply falling treasury yields and inflation expectations, the odds of central bank easing have increased, which will benefit gold bullion prices and related equities.

TOP PICKS

OSISKO MINING (OSK TSX)
Acquired in December 2019 at $3.40.

SABINA GOLD & SILVER (SBB TSX)
Acquired in April 2019 at $1.55.

WALLBRIDGE MINING (WM TSX)
Acquired in August 2019 at $0.46.

PAST PICKS: JAN. 9, 2019

ENBRIDGE (ENB TSX)

• Then: $45.70
• Now: $51.78
• Return: 13%
• Total return: 22%

KELT EXPLORATION (KEL TSX)

• Then: $5.08
• Now: $3.22
• Return: -37%
• Total return: -37%

HARTE GOLD (HRT TSX)

• Then: $0.42
• Now: $0.13
• Return: -69%
• Total return: -69%

Total return average: -28%

WEBSITE: www.middlefield.com