US markets rise over July 25-28 trading week

Over the July 25-28 trading period, the Dow Jones Industrial Average gained 855.09 points, or 2.7%, to 32,845.13, and the S&P 500 jumped 151.79 points or 3.8% to 4,118.63. Although the Federal Reserve announced a 75-basis point rate hike on July 27, markets reacted positively as the central bank signalled future increases could be more tempered, depending on economic conditions. 

Shares in Nexa Resources rose by 25.8% to $6.67 apiece as the company released its second quarter results on July 28. The zinc-focused base metals miner reported the largest ever quarterly earnings numbers in its 60-year history, posting an adjusted EBITDA of US$286 million. The result was driven by higher sales volumes and a higher zinc price, with the company’s consolidated net revenue for the quarter rising by 15% from the previous quarter to US$829 million. During the period, Nexa’s Vazante zinc-lead-silver mine in Brazil, which had been affected by heavy rains earlier in the year, resumed full production. The company has producing mines in Brazil and Peru. 

Nouveau Monde Graphite’s shares rose by 24.2% to close the trading week at US$4.77. The Quebec-based company announced on July 20 that it had closed a previously announced deal to earn a 51% interest in Mason Graphite’s Lac Gueret project. Analysts say the deal could more than double Nouveau Monde’s graphite production capacity in the long term. The company is developing its Matawinie graphite mine in Saint-Michel-des-Saints, Que., with first production targeted in 2023. Mason’s Lac Gueret is 285 km north of Baie-Comeau. A 2018 feasibility study projected Lac Gueret could produce  51,900 tonnes of graphite per year over 25 years with a capital investment of $258.2 million. In return for its majority share, Nouveau Monde agreed to invest $5 million in Mason Graphite, spend $10 million on the property, and co-fund a feasibility study. 

Brazilian miner Vale led the week in trading volume, with 159.5 million shares changing hands. The stock rose US87¢ to end the period at US$13.46 per share. Vale reported its second quarter financial results on July 28, posting adjusted EBITDA of US$5.3 billion, down from US$6.2 billion in the year’s first quarter. The company experienced challenges in both its iron ore business and in its base metals business during the quarter (licensing delays for operations in Brazil and extended maintenance and stoppages at its base metals mines). Its average iron ore sales price also fell 31% year-on-year and it cut production forecasts for both iron ore and copper for 2022. However, Vale said it plans to pay back US$3 billion in dividends to shareholders in September. The company also announced an US$8.3 billion share buyback program earlier this year.