Issue link: http://resourceworld.uberflip.com/i/759903
22 www.resourceworld.com D E C E M B E R / J A N U A R Y 2 0 1 7 At the Market by Rodney Blake LIKE IN AN INTENSE GAME of bridge, the resource markets were trumped on Tuesday, November 8 th . Donald Trumped. The election of Donald Trump as the 45 th President of the United States quickly threw the resource markets into a rebal- ancing tizzy of the likes that I'm sure few had seen before. I've been in this chair long enough to know that, for the most part, just when the experts have things all figured out – an event will happen that throws all of the expert theories right out the window – leaving investors to reevaluate and adjust to the new reality. It happened with the ultra-high inter- est rates and resulting recession of the early 1980s, the tech bubble and market crash of 2000, the US asset backed mort- gage bubble and housing crash of 2008-09, the Japanese tsunami and resulting energy effect of 2011, the fracking induced oil glut and crash of 2014, just to name a few. And now, post-election, the market and its experts that had built in a sure thing Hillary Clinton victory was suddenly scurrying to digest and react to the very unexpected Donald Trump effect. Gold bullion that had been hovering near US $1,300 an ounce before the elec- tion suddenly fell to US $1,220 an ounce as the US dollar, instead of dropping with a Trump victory, actually rose to multi- year highs against most of the worlds currencies. Copper that was US $2.30 per pound immediately leaped up to US $2.55 per pound as infrastructure spending became the buzzword of the day. Crude oil dropped by US $2 to US $43 per barrel as investors envisioned a dramatic rise in active drill rig counts to come. Once the dust has settled, I think the markets will adjust to reflect Trump's pro- business view of the world. I think that in spite of all of the protectionist rhetoric – a pro-business platform should be good for economy and then by design com- modities. Infrastructure spending requires commodities. Lower taxes should increase spending which may cap the advance of the US dollar and let precious metals rise again. The number of petroleum drilling rigs will increase along with increased domestic demand. Although this time I'm sure the industry will be better prepared so as not to create another oil or natural gas glut. Looking back – the TSX Venture Exchange almost doubled in 2016 from a very oversold level of 460 to the 835 level before recently correcting back about 15% to 720. The resource markets were having such a good year that they didn't see the Donald Trump card coming. But come it did indeed. Now that the card has been dealt – the game will continue on. Looking ahead, if the resource markets can build from here, then I think a very good start to 2017 waits ahead. After all, how many more trump cards could there be? n Rodney Blake is an Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member- Canadian Investor Protection Fund. The information contained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the informa- tion is not guaranteed, nor in providing it does Rodney Blake, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is cur- rent as of the date appearing in this article, we do not assume any obligation to update the information or advise on further develop- ments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec- tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not nec- essarily those of Canaccord Genuity Corp. He can be reached at 604-643-7567 or rod.blake@ canaccord.com DonalD tRuMpED 1.888.228.1234 • www.geotechdrilling.com Welcoming Tahltech Drilling Services Ltd., a partnership between the Tahltan Nation Development Corporation and Geotech Drilling Services Ltd. Drilling Services for BC's Northwest!