Morning Notes

15/11/2017 Argonaut Morning Note

Market Update & Important Indicators:

Shares of energy and materials companies dragged down major indexes intraday. The Dow Jones Industrial Average shed 30 points, or 0.1%, to 23409. The S&P 500 slid 0.2%. The Nasdaq Composite also fell 0.2%. Shares of chemicals companies, miners and oil-and-gas firms tracked a recent drop in crude and metals prices. U.S. crude oil was off 2.4% at $55.41 a barrel after the International Energy Agency said the oil price rally could be short-lived and global oil demand would be weaker than expected this year and next. The U.S. gold price rose for a second straight day, jumping 0.2% to finish at 1,280.4 US$/oz.

European stocks closed lower for a sixth session in a row, hurt as the euro leapt to a three-week high on the back of stronger-than-expected economic growth figures from the Eurozone, whilst mining shares slumped on worries about growth in China. The Stoxx Europe 600 fell by 0.6% to end at 383.86, registering its lowest close since Sept. 22, FactSet data showed. The DAX 30 index declined 0.3% to close at 13,033.48, and France's CAC 40 gave up 0.5% to finish at 5,315.58. The U.K.'s FTSE 100 shed less than 0.1% to close at 7,414.42, giving up earlier gains, and Spain's IBEX was down 0.6% at 9,990.40, notching its first close below 10,000 since early October. The euro traded at $1.1768, rising from $1.1669 late Monday in New York. The Stoxx Europe 600 Basic Resources Index tumbled 2.7%.

In Asia, tighter liquidity weighed on Chinese stocks, with the Shanghai stock benchmark finishing down 0.5% after closing at a 22-month high Monday. In Shenzhen, the stock benchmark was off 1%. Data late Monday showed that growth in M2, the broadest measure of money supply in China, was lower than expected at 8.8% in October, the weakest increase on record. Data also showed slower industrial output and fixed-asset investment growth in China in October after Beijing dialled back stimulus efforts and closed northern factories around a big Communist Party meeting. Hong Kong's Hang Seng Index edged down 0.1%, while Japan's Nikkei Stock Average was flat. Singapore shares ended in the red for the third straight session, emerging as one of the top losers in Asia. The benchmark Straits Times Index closed 0.6% lower at 3399.09, closing below the 3400 mark after five trading days.

Australian shares were at the sharp end of regional losses, extending Monday's drop and sending the S&P/ASX 200 back below 6000. Energy stocks led broad selling, falling sharply despite only modest weakness in oil futures. Meanwhile, the heavily weighted major banks pulled back after their recent strength. The ASX 200 fell 0.9% to 5968.7 while being down strongly throughout the day. Woodside Petroleum slid 3.2% as Shell sold its 13% stake overnight at a discount to Monday's close. But other oil names also fell strongly after the past month's rally.

The London Metal Exchange’s 3-month copper contract traded lower Tuesday, falling 2.1% to finish at $6,720/t. All other base metals also finished lower. Aluminium prices fell 1.3% to 2,061/t, whilst tin prices shed 0.2% at 19,568/t. Zinc prices dropped 1.8% to 3,184/t, whilst lead prices also fell strongly, falling 2.3% at 2,457/t. Nickel prices were once again the biggest decliner, falling by 5.7% overnight to 11,719/t, the biggest drop in two months. The metal continues to be under pressure from China as a late night selloff in Chinese markets spilled on to the LME.

Recent Contacts & Presentations:

Botanix Pharmaceuticals Ltd (BOT), Xanadu Mines Ltd (XAM), Orthocell Ltd (OCC), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU), Minotaur Exploration Ltd (MEP), Panoramic Resources Ltd (PAN), Sino Gas & Energy Holdings Ltd (SEH), Great Boulder Resources Ltd (GBR), Metallum Ltd (MNE), Gold Road Resources Ltd (GOR), Apollo Consolidated Ltd (AOP), De Grey Mining Ltd (DEG), Triton Minerals Ltd (TON), Evolution Mining Ltd (EVN), Silver Mines Ltd (SVL), NTM Gold Ltd (NTM), Gascoyne Resources Ltd (GCY), Southern Cross Electrical Ltd (SXE), MOD Resources Ltd (MOD), Meteoric Resources NL (MEI)

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