Morning Notes

09/02/2018 Argonaut Morning Note

Market Update & Important Indicators
The Dow Jones Industrial Average fell more than 700 points intraday as worries about rising interest rates again rattled markets. A shaky day in the bond market appeared to spook equity investors, as the Dow industrials recently dropped 600 points, or 2.4%, to 24293. Earlier in the session, the Dow fell as much as 704 points. The yield on the benchmark 10-year U.S. Treasury note was at 2.848%, near its highest level since January 2014, from 2.843% on Wednesday, according to Tradeweb. Fears that a pickup in growth and inflation could force central banks to tighten monetary policy more quickly than expected have driven government-bond yields higher throughout the year. That, in turn, can pressure stock prices as fixed-income interest payments become more attractive than stock dividends. Similar concerns sparked the tumble in stocks last week when data showed wage growth accelerating at the fastest rate since 2009 -- a sign that long dormant inflation could be picking up, analysts said. Since then, stocks have taken a wild ride, giving up January's big gains and flirting with correction territory. The U.S. gold price traded slightly higher overnight, finishing at 1,318.30 US$/oz.

European stocks dropped, taking their cues from a selloff on Wall Street as well as a plunge in oil prices that weighed on shares of the region's major energy companies. The Stoxx Europe 600 index fell 1.6% to close at 374.03, partly erasing a 2% rally from Wednesday, when the benchmark broke a string of seven straight declines. Germany's DAX 30 index slumped 2.6% to 12,260.29, and France's CAC 40 index fell 2% to 5,151.68. The U.K.'s FTSE 100 ended down 1.5% to 7,170.69.

Volatility continued to plague Asian markets, with the Chinese yuan weakening by the most since August 2015 and investors grappling with the global selloff in the past week. Japan's Nikkei Stock Average ended 1.1% higher, after surrendering most of its morning gains earlier in the session. Hong Kong's Hang Seng Index also got a lift in afternoon trade, rising 0.6% after losing its morning gains before the midday break. Indexes in South Korea, Taiwan and Singapore also fluctuated between gains and losses.

Shrugging off early weakness on falling commodities stocks, Australia's benchmark finished modestly higher as financials joined a recovery they largely missed out on Wednesday. Up for a second day after starting the week sharply lower, the S&P/ASX 200 rose 0.2% to 5890.7. National Australia Bank climbed 2.3% following its fiscal first quarter result, though Commonwealth Bank fell a further 0.4% after Wednesday's post-earnings drop to put the week's skid at 5.3%. The energy sector fell 1.8% on the overnight slide in oil prices, while major miners BHP and Rio Tinto dropped as metals also shrunk.

The London Metal Exchange’s 3-month copper contract traded lower overnight, finishing 0.5% lower at $6,845/t. The other base metals finished mixed. Aluminium prices added 0.6% to $2,175/t, while lead prices gained 0.8% to close at $2,534/t. Zinc prices bounced 1.1% to $3,466/t, while Tin prices slid 1.3% to $21,418/t. Nickel prices closed 0.2% lower at $13,105/t.

Recent Contacts & Presentations
Australis Oil & Gas Ltd (ATS), Explaurum Ltd (EXU), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU), Melbana Energy Ltd (MAY), Genesis Minerals Ltd (GMD), Proteomics International Laboratories Ltd (PIQ), Ramelius Resources Ltd (RMS), 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)

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