Braskem topped the list for bullish takeover bids; Enviva fell on short reports

Raw aluminum sheet

D. Lentz

Basic materials is one of eight industries in the S&P 500 (SP500) closed in the red this week, leading the index to post Wednesday weekly loss in year. Materials reduced by -1.89%, and Material Select Sector SPDR ETF (XLB) -1.84%.

Inflation worries dominated the headlines for the week, with the Federal Reserve saying it was committed to Positive interest rate hike stance responded and it did not see inflation slowing down.

Aggressive Fed policy is disrupting several asset classes. Higher interest rates strengthened the dollar and rallied against gold, silver and bitcoin. Friday, the price of gold (XAUUSD: CUR) fell 1.42% to $1,652.30 an ounce. Silver (XAGUSD: CUR) fell 3.90% to $18.36 an ounce.

Gold rose last week but advance has been cut as prices continued to fall below $1,700/oz in the latest week, pressured by a stronger dollar and weak risk-on sentiment in the equity markets.

“A longer time before a change in the Fed stance could mean a longer hold in gold prices,” analysts at Heraeus wrote on Monday.

Meanwhile, aluminum prices (LMAHDS03: COM) rose in the week after Reuters reported Alcoa (AA) is lobbying the Biden administration to blocking US imports aluminum from Russia following the latest military escalation in Ukraine.

However, prices of the metal fell on Friday and offset some of the gains made earlier amid rising inventories. Aluminum inventory increase this week at LME-registered warehouses increased by 41,400 tons to 367,200 tons.

Take a look at this week’s top gainers among basic materials stocks ($2 billion market cap or more):

  • Brake (BAK) + 25.61%; ADR has increased after Brazil’s O Globo newspaper reported Apollo Global Management (ONE PO) did a new proposal higher for company.
  • Innospec (IOSP) + 7.49%
  • Posco Holdings (PKX) + 6.22%
  • Commercial metal company (CMC) + 5.50%; The company announced Q4 results for the week, reporting Second best core EBITDA in its history.
  • Scotts Miracle-Gro (SMG) + 5.26%

Here are the top losers among fundamental materials (market cap $2 billion or more):

  • Enviva (EVA) -22.23%; Stocks plunge in response to a Short call from Blue Orca Capital.
  • Albemarle (ALB) -13.91%; Morgan Stanley and Berenberg both said this week they expected to drop sharply according to the price of lithium.
  • Companhia Siderurgica Nacional (SID) -12.86 %
  • AngloGold Ashanti (AU) -12.51%
  • Vale (SELL) -10.05%

Other documentary ETFs to watch: iShares Global Timber & Clinical ETF (WOOD), Sector Select Materials SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Coin Mining Company Global X ETF (COPX).


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