Morning Notes

14/07/2017 Argonaut Morning Note

Market Update & Important Indicators:

Climbing financial and technology stocks pushed the Dow Jones Industrial Average intraday toward its 24th record of the year. Major indexes stuck to a narrow range, with some traders attributing listless activity to investors holding back on bets ahead of a string of bank earnings reports expected Friday. Companies in the S&P 500 are expected to post another quarter of earnings growth, according to analysts polled by FactSet. While growth is expected to slow slightly from the first quarter, signs of broad strength should help stocks keep climbing in the second half of the year, investors say. The Dow Jones Industrial Average rose 21 points, or less than 0.1%, to 21553. The S&P 500 added 0.2%, and the Nasdaq Composite rose 0.2%. Financial stocks rose 0.6%. The U.S. gold price was slightly lower overnight, finishing 0.2% lower at 1,217.30 US$/oz.

European stocks largely stepped higher, building on the prior day's sizable jump that was sparked by dovish comments from Federal Reserve chief Janet Yellen. The Stoxx Europe 600 rose 0.3% to close at 386.14, after the index on Wednesday notched its biggest one-day percentage advance since April 24, tacking on 1.5%. Global equity benchmarks have been given a midweek shot in the arm by Yellen saying interest rates don't have to rise all that much further. Germany's DAX 30 index closed up 0.1% at 12,641.33, while France's CAC 40 index climbed 0.3% to 5,235.40. But the U.K.'s FTSE 100 index slipped 0.1% to 7,413.44.

Asian shares ended higher, as markets cheered Fed chair Janet Yellen's dovish comments overnight. Add to that China's stronger-than-expected June exports data, which helped lift growth prospects for the region. In Hong Kong, the Hang Seng Index rose to a fresh two-year high, with Indian markets at an all-time high with weak inflation boosting hopes of a rate cut. The benchmark Shanghai Composite Index ended up 0.6% at 3,218, while the SSE 50 – an index featuring mainly big caps -- gained 1.4% to a two-year high of 2,601. Meanwhile, the Shenzhen Composite Index ended slightly lower while the start-up ChiNext board lost 0.4%. Malaysia's benchmark stock index gave up earlier gains to end lower, underperforming the broadly positive Asian markets. Still, gainers outpaced losers 441 to 370, while about a quarter of all listed stocks were untraded. The FBM KLCI Index closed down 0.2% at 1,753.78 points.

Australian shares rose strongly, mirroring other Asian-Pacific markets, after Federal Reserve Chairwoman Janet Yellen sounded dovish in her first day of Capitol Hill testimony. The S&P/ASX 200 index ended up 1.1%, or 63 points, at 5736.8 to recover all losses when investors waited nervously to see what tone Ms. Yellen would adopt. Financial and healthcare shares led the way, with Westpac Banking outperforming peers after Goldman Sachs turned bullish on the stock. Ms. Yellen said she expects the forces holding down consumer prices to fade in the months ahead, allowing the Fed to stick to plans for gradual interest-rate increases.

The London Metal Exchange's three-month copper contract lost 0.49% overnight to close at $5,876/t. The other base metals finished mixed. Aluminium prices rose 1.8% to 1,906/t, whilst nickel prices rose 0.1% to finish at 9,167/t. Falling for the day, lead prices fell 1.4% to 2,276/t, tin prices fell 0.7% to 19,885/t, whilst zinc prices dropped 0.9% to 2,805/t.

Recent Contacts & Presentations:

Metro Mining Ltd (MMI), Paringa Resources Ltd (PNL), Independence Group NL (IGO), MZI Resources Ltd (MZI), Transerv Energy Ltd (TSV), Emmerson Resources Ltd (ERM), Antipa Minerals Ltd (AZY), Echo Resources Ltd (EAR), Sovereign Metals Ltd (SVM), Calidus Resources Ltd (CAI), Great Boulder Resources Ltd (GBR), Finders Resources Ltd (FND), Bionomics Ltd (BNO), Threat Protect Australia Ltd (TPS), Ramelius Resources Ltd (RMS), Zenith Energy Ltd (ZEN), Blackham Resources Ltd (BLK), Top End Minerals Ltd (TND), Northern Star Resources Ltd (NST), Xanadu Mines Ltd (XAM)

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