Morning Notes

04/12/2017 Argonaut Morning Note

Market Update & Important Indicators
The Dow Jones Industrial Average tumbled 350 points Friday morning before making most of that back, as investors grappled with a new development in the Russian investigation and further progress on the GOP tax plan. By the end of the day, major indexes suffered modest losses in the most turbulent day of the year for the Dow. The blue-chip index's trading range was roughly 400 points, the widest since June 24, 2016, the day after the Brexit vote. As Friday's stock selling accelerated, investors piled into assets that many consider havens. Gold and government bond prices soared higher, then gave back some of that ground as markets stabilized in the afternoon. The CBOE Volatility Index, a gauge of expected swings in the S&P 500, shot up 29% at one point before nearly erasing its gain. The Dow industrials fell 40.76 points, or 0.2%, to 24231.59. The S&P 500 declined 5.36 points, or 0.2%, to 2642.22 and the Nasdaq Composite lost 26.39 points, or 0.4%, to 6847.59. The U.S. gold price traded higher overnight, adding 0.4% to close at 1,279.60 US$/oz.

Stocks across Europe finished lower on Friday, after a late-session slump on reports former U.S. national security adviser will testify about President Donald Trump. Markets had already opened in negative territory after U.S. lawmakers had trouble passing a long-awaited tax bill and pushed the vote back to Friday. The Stoxx Europe 600 ended 0.7% lower at 383.97, closing out the week with 0.7% loss. Germany's DAX 30 index slumped 1.3% to 12,861.49, and France's CAC 40 gave up 1% to 5,316.89. The indexes ended with weekly losses of 1.5% and 1.4%, respectively. The U.K.'s FTSE 100 fell 0.4% to 7,300.49, losing 1.5% for the week.

Stocks largely returned to positive territory in late-session trading in the Asia-Pacific region Friday. In Japan, the Nikkei Stock Average closed up 0.4%. China's Shenzhen A-Share index rose 0.8%. Hong Kong's Hang Seng Index remained under pressure, down 0.4% mostly due to weakness in Tencent. It was a tough week for tech stocks globally, particularly for Samsung Electronics, which lost 8.3%, its worst week in 5 1/2 years.

Despite fading after early strength, Australia stocks still managed finish the day and week in positive territory. Energy stocks drove a broad rebound from Thursday's bank-led decline, with the S&P/ASX 200 settling 0.3% higher at 5989.8 and up 0.1% for the week. The 6000 mark, reclaimed Wednesday after tentative attempts the previous several sessions, remains elusive. The major banks were modestly firmer, though CBA fell another 0.3% for a weekly loss of 1.7%. An extension of OPEC's deal to curtain production lifted oil prices in Asia today and Australian producers; smaller Beach jumped 8.6%. Still, Telstra eased 0.3% after cutting earnings guidance.

The London Metal Exchange’s 3-month copper contract traded higher overnight, adding 1.05% to finish at $6,833/t. The other base metals finished mostly higher. Aluminium prices gained 1.2% to 2,059/t, whilst Lead prices bounced 3.1% to close at 2,547/t. Zinc prices jumped 2.8% higher, closing at 3,267/t, whilst Nickel prices rebounded 1.6% to 11,230/t. Tin prices bucked the trend, closing 0.8% lower at 19,525/t.


In this issue
Paragon Care (PGC) | Strengthens offering | BUY
Market Cap $136m | Current Price $0.82 | Valuation $1.15

The $8.5m acquisition of an immunohaematology business strengthens PGC’s product offering, broadens relationships, is well within balance sheet capacity, and maintains strategic impetus. Acquisitive and organic growth to date has been well managed and suggests upside risk to our forecasts. We maintain a positive view and buy call on a valuation that has been upgraded slightly to $1.15 (prior $1.12).

Recent Contacts & Presentations
Alice Queen Ltd (AQX), Jervois Mining Ltd (JRV), St George Mining Ltd (SGQ), Overland Resources Ltd (OVR), Metro Mining Ltd (MMI), 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)

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