Morning Notes

12/05/2017 Argonaut Morning Note

Market Update & Important Indicators:

U.S. stock indexes pulled back intraday, as disappointing earnings reports put pressure on shares of consumer-discretionary companies. Major indexes initially headed toward one of their biggest declines of the month as retail stocks slid, then pared losses heading into the afternoon. Individual stocks have sold off following corporate earnings reports, but stock indexes have barely budged in recent sessions - a trend attributed to investor belief that the U.S. economy was on solid footing. The Dow Jones Industrial Average fell 31 points, or 0.2%, to 20912 intraday. The S&P 500 lost 0.3%, and the Nasdaq Composite shed 0.3%. Rising for the day, the U.S. gold price jumped 0.5% to 1,224.80 US$/oz.

European stocks dropped, pulling back from a 21-month high, with the market coming under pressure as the euro marched higher in the wake of a lacklustre economic outlook for the British economy. The Stoxx Europe 600 index fell 0.6% to 394.03, hitting intraday lows as investors also saw U.S. stocks slide after a round of disappointing earnings reports. The pan-European index on Wednesday ended at its highest since August 2015, aided by a stretch higher for oil prices. Today, oil prices climbed more than 1%, but that wasn't enough to lift the Stoxx Europe 600 Oil & Gas index into positive territory.

Stocks were broadly higher in Asian trading hours, in part supported by a climb in oil and metals prices. Japan's Nikkei Stock Average rose 0.3%, while Hong Kong's Hang Seng Index added 0.4%. South Korea's Kospi was on track for a fresh record as stocks rebounded from Wednesday's postelection pullback. In China, a note was posted on an official WeChat account run by the state-owned Securities Times, saying the country's stock regulator summoned brokers with large capital pools for a meeting on Monday to ease concerns about a crackdown in the shadow-banking sector. The regulator clarified that the crackdown is targeted at non-standard assets and doesn't include bonds. The Shanghai Composite rose 0.3%, recovering from earlier losses that sent it to a seven-month low.

Australian shares rose for a second day running, edging higher as gains in healthcare and consumer staples companies offset pockets of weakness across the market. Failing to hang on to most of the morning's gains, the S&P/ASX 200 settled up just 2.9 points at 5878.3. It had been up by as much as 0.8%. The major banks, which carry a heavy weighting in the market, were mixed for the session as investors continue to weigh the federal government's plans for a levy on the biggest banks' liabilities to raise money to plug its budget deficit. Bank representatives met with Treasury officials to discuss the levy, but the industry's lobby group afterward said there remained questions about the government's projections and how the tax would be applied. Mining stocks also dragged on the market after a fresh decline in Chinese iron-ore futures, and energy shares struggled to make ground as crude futures eked out gains in Asian trading.

The London Metal Exchange's three-month copper contract closed up 0.77% at $5,543/t. The other base metals finished mixed on Thursday. Nickel prices rose 2.3% to 9,291/t, tin prices rose 1.0% to 19,936/t, whilst aluminium prices also rose 0.5% to 1,870/t. Bucking the trend, lead prices dropped 0.8% to 2,170/t whilst zinc prices remained flat at 2,585/t.

Recent Contacts & Presentations:

Apollo Minerals Ltd (AON), Ironbark Zinc Ltd (IBG), Sovereign Metals Ltd (SVM), Pilbara Minerals Ltd (PLS), Laconia Resources Ltd (LCR), Hazer Group Ltd (HZR), Transerv Energy Ltd (TSV), Ausquest Ltd (AQD), Quintis Ltd (QIN), Paradigm Biopharma Ltd (PAR), Pharmaust Ltd (PAA), Strandline Resources Ltd (STA), PharmaNet Group (PNO), Emerald Resources NL (EMR), Echo Resources (EAR), Investigator Resources Ltd (IVR), Beadell Resources Ltd (BDR), Pantoro Ltd (PNR), Botanix Pharmaceuticals Ltd (BOT), Resolute Mining Ltd (RSG), Hotcopper Holdings Ltd (HOT), Prairie Mining Ltd (PDZ) Vital Metals Ltd (VML), Red River Resources Ltd (RVR)

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