Morning Notes

15/05/2018 - Argonaut Morning Notes

Market Update & Important Indicators:

U.S. stocks rose Monday afternoon as investors digested signs of easing between the U.S. and China. The Dow Jones Industrial Average climbed 0.3%, putting it on track for its eighth consecutive session of gains -- its longest streak since September 2017, when it rose for nine straight sessions. The blue-chip index remains down about 6% from its Jan. 26 high.  The S&P 500 rose 0.1%, with six of 11 sectors trading higher, and the Nasdaq Composite added 0.2%.  Energy stocks were the biggest gainers in the S&P 500, rising 0.7%, as U.S. crude prices edged up 0.5% to $71.03 a barrel. Health-care stocks added 0.4% after President Donald Trump on Friday unveiled a raft of modest measures to curb high drug prices that left the pharmaceutical industry relieved and buoyed their stocks. And shares of gaming firms climbed following the decision by the U.S. Supreme Court to let states permit sports betting. Caesars Entertainment rose 6.7%, and Penn National Gaming climbed 4.3%. The US gold price finished 0.4% lower at 1313.00 US$/oz.

European shares edged lower as the euro rises and as the prospect of a populist coalition in Italy gains traction. The Stoxx Europe 600 lost 0.07%, or 0.27 points, to 392.13 while currency speculators lifted the euro 0.2% after a European Central Bank official said policymakers could give fresh guidance on the timing of a Eurozone interest rate hike. Italy's FTSE MIB gained 0.16% as the Italian Five-Star Movement and League parties reportedly agreed on a program for government. Germany's DAX fell 0.15% and France's CAC-40 was flat at 5542.

Stocks rose in Asia Monday as investors digested signs of easing trade tensions between the U.S. and China. Bourses around the world have rebounded in recent sessions after a turbulent start of the year, amid many solid corporate earnings and bets that inflation isn't rising at a pace that would force the Federal Reserve to accelerate its pace of interest-rate increases. U.S. stocks registered their biggest one-week gains since March last week.   Signs of a thaw in U.S.-China relations would help extend those gains. Hong Kong's Hang Seng Index rose 1.2% while Japan's Nikkei Stock Average finished up 0.5%. 

Broad gains lifted Australia's stock benchmark to the brink of topping January's 10-year closing high, held back by further weakness in Telstra and a couple of the major banks trading ex-dividend. Settling near the session's peak, the S&P/ASX 200 climbed 0.3% to 6135.3. It finished a half-point higher on Jan. 9, the highest close since the opening days of 2008. Again, resources stocks carried much of the weight today. But a 1.5% jump by Westpac added. Still, Telstra slumped 5% after saying FY earnings would be at the low end of forecast. Also, ANZ and Macquarie each lost more than 1% as they went ex-dividend.

Base metals were mainly mixed overnight on the London Metal Exchange. The 3-month copper contract fell 0.8%% to 6,856/t. zinc declined 0.9% to 3,036/t, and lead finished 1.7% higher at 2,374/t. Nickel appreciated 3.1% to 14,431/t while tin was down 0.1% to finish at 21,018/t. Aluminium recorded a 1.7% increase to close at 2,316/t.              

In this issue:

Shandong shuts graphite production

Argonaut has received unconfirmed reports that Chinese Government Authorities have ordered the immediate shutdown of graphite production in the Qingdao region of the Shandong Province. The order, issued on an environmental control basis, comes ahead of the Shanghai Cooperation Organisation Summit to be held in Qingdao in June. We understand the shutdown has been issued via a formal letter to a number of local producers ordering production to cease from the 10th May to the 1st October 2018.

Recent Contacts & Presentations

Nexus Minerals (NXM), Great Boulder Resources (GBR), Orthocell (OCC), Northern Minerals (NTU), ABM Resources Ltd (ABU), Vital Metals Ltd (VML), Todd River Resources Ltd (TRT), Pacific Energy Ltd (PEA), Carnarvon Petroleum Ltd (CVN), Australian Mines Ltd (AUZ), Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH)

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Argonaut Morning Note