Morning Notes

20/03/2017 Argonaut Morning Note

Market Update & Important Indicators:

Investors poured money into dividend-paying stocks Friday, pushing major indexes to weekly gains. Utilities stocks in the S&P 500 rose 0.6% on Friday, and were the best performers in the index, whilst the real-estate sector climbed 0.2%, respectively. This week marked the 16th-consecutive week of inflows into exchange-traded funds that invest primarily in companies that dole out dividends, according to EPFR Global data through Wednesday. During that time, $6.9 billion have flowed into these funds. The inflows come even as the Federal Reserve has raised interest rates twice and is on pace to raise rates an additional two times in 2017. Leading up to the central bank meeting, many Fed officials spoke about how the case for raising rates had strengthened due to improving economic data. Their tone sparked worries among some investors that the central bank may be more aggressive and raise rates four times in 2017. The Dow Jones Industrial Average slipped about 20 points, or 0.1%, to 20914 on Friday, while the S&P 500 fell 0.1% and the Nasdaq Composite added a fraction of a point, or less than 0.1%. The U.S. gold price also finished the week strongly rising 0.2% at 1,228.8 US$/oz.

European stocks closed higher, managing to hang on to their strongest levels in more than a year as investors turned to a Group of 20 gathering after a hefty week of political and financial events. The Stoxx Europe 600 index ended up 0.2% at 378.32, sloughing off modest intraday losses to log its best finish since Dec. 2, 2015, according to FactSet data. The pan-European benchmark rose 1.4% for the week, a second weekly rise in three weeks. The week contained a laundry list of so-called event risks, ranging from the general election in the Netherlands and the Federal Reserve's policy meeting, at which the bank signalled that it will continue on a gradual path of raising rates. As the trading week wound down, the G-20 meeting of finance ministers and central bankers from the world's largest economies was kicking off in Baden-Baden.

Shares in Asia were mostly higher in trade Friday. The Nikkei Stock Average ended 0.4% lower with the Shanghai Composite down 1% and the Hang Seng index ending up 0.1%. The Hang Seng, Taiwan and Korea index rose to their best levels in two years. Indonesia's JSX index was down 0.3% after touching an intraday record with Taiwan's Taiex index adding 0.7%. Malaysia, Philippines and the Vietnam, Thailand and India too posted gains as a measured response of the U.S. Fed. Korea's Kospi index ended up with the best gains for the week with a 3.2% gain.

Australian shares rose for a fourth straight day to a more than three-week high on Friday. The S&P/ASX 200 closed up 13.8 points, or 0.2%, at 5799.60, its strongest finish since Feb. 22. The four largest banks, among the biggest stocks in the ASX 200, collectively added more than 7 points to the index, offsetting weakness in energy shares and a broadly flat day for the materials sector. Rising for the second consecutive week, the ASX 200 climbed 0.4% thanks to a strong week for mining companies, particularly iron-ore producers. Prices for the steelmaking commodity rose after better-than-expected economic data out of China.

The London Metal Exchange's three-month copper contract closed up 0.44% at $5,935/t. All other base metals finished higher Friday. Aluminium prices rose 0.8% at 1,902/t, zinc prices rose 1.9% at 2,854/t, nickel prices rose 0.4% at 10,203/t, tin prices rose 1.2% at 20,455/t and lead prices finished 2.3% higher at 2,282/t.

Recent Contacts & Presentations:

Hazer Group Ltd (HZR), Berkeley Energia Ltd (BKY), 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), MZI Resources Ltd (MZI), Seafarms Group Ltd (SFG), Marindi Metals Ltd (MZN), Rift Valley Resources Ltd (RVY), Botanix Pharmaceuticals Ltd (BOT), Thundelarra Ltd (THX), DTI Group Ltd (DTI) OpenDNA Limited (OPN), Metro Mining Ltd (MMI), Tox Free Solutions Ltd (TOX), St George Mining Ltd (SGQ), Venturex Resources Ltd (VXR), Creso Pharma Limited (CPH), Sino Gas & Energy Holdings Ltd (SEH), Orecorp Limited (ORR)

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