Morning Notes

12/01/2018 Argonaut Morning Note

Market Update & Important Indicators
U.S. stocks rebounded intraday, putting major indexes on track to close at fresh records, as rising oil prices and surging optimism about corporate earnings pushed energy shares higher. The S&P 500 regained its footing a day after it snapped its longest winning streak to start a year in more than half a century. The index has risen seven of the first eight trading sessions of 2018, gaining more than 3% so far. A confluence of events has contributed to the new year rally: a steadily expanding U.S. economy as many countries around the world are also growing, the expectation companies will continue to report big gains in earnings, and the passage of a broad tax overhaul that is expected to bolster profits even further. The S&P 500 added 0.5% in recent trading, while the Dow Jones Industrial Average gained 138 points, or 0.5%, to 25507. The Nasdaq Composite added 0.6%. Shares of energy companies in the S&P 500 gained 2% to extend their climb in recent months, benefiting from oil prices that continue to move higher. Crude oil rose 0.4% to $63.82 a barrel after paring earlier gains. Energy companies are up more than 6% in the first weeks of the year, making it the best-performing S&P 500 sector after finishing 2017 lower. The U.S. gold price traded higher overnight, adding 0.7% to close at 1,321.90 US$/oz.

European shares fell as the euro climbed against the dollar after a more hawkish tone in the European Central Bank's December meeting minutes. The Stoxx Europe 600 closed down 0.3% to 397.25 as the single currency gained 0.8% to $1.2047. All major European indices fell, apart from the FTSE 100, up 0.2%, Spain's Ibex 35, up 0.1%, and Italy's FTSE MIB, up 0.6%. Germany's DAX fell 0.6% and France's CAC-40 dropped 0.3%.

Asian stocks finished off session lows but were broadly down for a second session -- though Wednesday outperformers Hong Kong and China did so again. The mainland rode an afternoon rally to broad gains, with the Shanghai Composite logging its record-tying 10th-straight advance, with the Hang Seng notching a record-extending 13th-straight gain. Japan's stock market was weighed down by recent gains in the local currency, sending the Nikkei down 0.3% after falling as much as 0.8% earlier.

Australian stocks backed up Wednesday's biggest drop since Nov. 30 with a slightly smaller decline as regional equities fell for a second day following first-week strength to start 2018. The S&P/ASX 200 shed 0.5% to 6067.6, with industrials underperforming. fell 4.9% after Credit Suisse downgraded it to underperform, but electronics retailer JB Hi-Fi gained 4.4% after analysts said it had a good Christmas shopping season despite a new challenge from Amazon in Australia. The equities market overall was unmoved by country-wide November retail sales jumping much more than expected and logging their biggest increase in nearly five years.

The London Metal Exchange’s 3-month copper contract traded lower overnight, falling 0.2% to finish at $7,140/t. The other base metals finished mixed. Aluminium prices slipped 0.1% to close at 2,165/t, whilst Lead prices pulled back 0.3% to close at 2,553/t. Zinc prices added 1.6% to close at 3,412/t, whilst Tin prices closed 0.7% higher at 20,240/t. Nickel prices slid 2.4%, closing at 12,573/t.

Recent Contacts & Presentations
MOD Resources Ltd (MOD), Greenland Minerals & Energy Ltd (GGG), Walkabout Resources Ltd (WKT), Marindi Metals Ltd (MZN), Volt Power Group Ltd (VPR), PharmAust Ltd (PAA), 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)

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