Morning Notes

17/02/2017 Argonaut Morning Note

Market Update & Important Indicators:

The stock market rally stalled intraday, putting the S&P 500 on course to snap its longest winning streak since 2013. Investors sold shares of financial companies, which had been among the best performers earlier in the week, while pushing government bonds and their stock-market proxies higher. The day's moves put the S&P 500 on track for its first pullback since last Monday. Some investors and analysts said it wasn't unusual for stocks to pause after posting a series of records. Before Thursday, the S&P 500, Nasdaq Composite and Dow Jones Industrial Average had closed at new highs together for five consecutive sessions, buoyed by corporate earnings and fresh optimism around the U.S. economy. "The market might have just gotten a bit ahead of itself," said Mike Baele, managing director of the U.S. Bank Private Client Reserve in Portland, Ore. Still, continued growth in the economy and the possibility of tax cuts and fiscal stimulus from the administration should lead stocks higher yet, Mr. Baele said.

European stocks closed lower for the first time in eight sessions, weighed down by a retreat in banks and major oil companies. The Stoxx Europe 600 index fell 0.4% to end at 370.10, pulling back from a more-than-one-year closing high reached on Wednesday. Stock markets globally, including in Europe, have rallied in recent days after interest rate-hike signals from the Federal Reserve and pledges from U.S. President Donald Trump to announce a "massive" tax plan soon.

In Asian trading, Japan's Nikkei Stock Average fell 0.5% as the yen appreciated against the dollar, weighing on shares of exporters such as electronics companies. Insurers and banks continued to rise across the Asia-Pacific region, however, on expectations for higher U.S. interest rates and thereby higher yields. The Nikkei Stock Average fell 90.45 points to 19347.53 following a 1.0% rise on Wednesday. The index opened marginally lower and extended losses during the day. Taiwan's Taiex ended its five-day winning streak, closing down 0.3% at 9771.25, with turnover remaining heavy at NT$106.5 billion. China equities on the mainland close with gains. The Shanghai Composite Index reverses loses seen Wednesday to close up 0.52%. The Shenzhen Composite is up 0.57% and the smaller ChiNext board is up 0.28%.

Australian shares continued to push higher as corporate earnings season rolled on, and Wall Street set fresh highs on renewed optimism about the U.S. economy. Rising for a seventh day in the last eight, the S&P/ASX 200 picked up 7.2 points, or 0.1%, to settle at 5816.3 -- the highest since early May 2015. Early in the session the index briefly broke above the previous intraday high for 2017 hit in January, edging above 5833 before slipping into negative territory only to reclaim some of the advance. Financial stocks were again the big drivers, building on a rally Wednesday.

The London Metal Exchange's three-month copper contract closed down 1.1% at $6,000/t. The other base metals were mainly lower on Thursday. Aluminium prices fell 0.8% at 1,884/t, lead prices fell 2.3% at 2,261/t, tin prices fell 0.9% at 19,658/t, and zinc prices fell 0.5% at 2,851/t. Bucking the trend was nickel which rose 1.3% to 11,012/t.

Recent Contacts & Presentations:

Threat Protect Australia Ltd (TPS), Paringa Resources Ltd (PNL), The Gruden Group Ltd (GGL), Primary Gold Ltd (PGO), Vault Intelligence Ltd (VLT), Botanix Pharmaceuticals Ltd (BOT) Orthocell Ltd (OCC), Strandline Resources Ltd (STA) Dragontail Systems Ltd (DTS), ABM Resources Ltd (ABU), Acacia Coal Ltd (AJC), Troy Resources Ltd (TRY), Hazer Group Ltd (HZR), Berkeley Energia Ltd (BKY), Sino Gas & Energy Holdings Ltd (SEH), Sovereign Metals Ltd (SVM), Kin Mining (KIN), Vital Metals Ltd (VML), Mincor Resources (MCR), Dacian Gold (DCN), Leaf Resources Ltd (LER), Alchemy Resources Ltd (ALY), OpenDNA Limited (OPN), MZI Resources Ltd (MZI), Seafarms Group Ltd (SFG)

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