Morning Notes

06/06/2018 - Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks bounced between small gains and losses intraday, as shares of technology companies continued climbing and financial stocks declined with government bond yields. The Dow Jones Industrial Average fell 14 points, or 0.1%, to 24800, and the S&P 500 dropped less than 0.1%. The tech-heavy Nasdaq Composite - which closed at a record high Monday - rose 0.1%. Tech stocks in the S&P 500 have risen 6.3% over the past month, marking a shift after investors fled the sector in March amid fears of increased regulatory scrutiny as Facebook faced questions over its sharing of user information. Now, tech stocks are looking more attractive, investors say, even as tighter trade policies have dented investors' confidence in the global growth story that had driven stocks to records last year. The US Gold price was higher by 0.3% to 1,295.80 US$/oz.

The Stoxx Europe 600 index ended down 0.3% at 386.89, with Germany outperforming as technology stocks gained a boost from rises in U.S. semiconductor makers and other tech stocks as investors return to the sector. The rise in tech stocks helps ensure Germany's DAX ended in positive territory, up 0.1% as Infineon led gainers, up 2.7%. But the U.K.'s FTSE 100 ended down 0.7%, with Royal Bank of Scotland among the biggest fallers, down 5.3%, after the U.K. government sold a 7.7% stake, while a rise in the pound weighed broadly. France's CAC 40 ended down 0.2%, Spain's IBEX 35 down 0.7%, while Italy's FTSE MIB again underperformed due to falls in Italian banking stocks, falling 1.2%.

Asian equities didn't start off terribly well, but things broadly improved as the day progressed. Chinese stocks finished at session highs, led by small caps after their noted selling Monday, with the startup-heavy ChiNext bouncing 2.5%. Meanwhile, the Philippines' benchmark bounced 1.4%, more than half that in the final minutes of trading, and Indonesia's JSX was up almost 1%. The only broad downer was energy, hit by fresh overnight declines in oil prices. India's Sensex is off 0.3% as it appears on track for a fifth drop in six sessions. China's tech-heavy Shenzhen composite index leading the way with a 1.3% rise. The Shanghai Composite Index climbed 0.5%, and Japan's Nikkei 225 edged up 0.3%.

Australian equities again underperformed Asia-Pacific counterparts, dented by an overnight drop in oil prices. The S&P/ASX 200 ended down 0.5% at 5994.9 to erode most of Monday's rebound. The energy sector lost 1.3% and miners 1%, while yield-heavy utilities and REITs also dragged. But CBA again was again an outperformer among financials, rising a further 1% after Monday's announcement of government-lawsuit settlement. And the central bank's steady hand on rates had little noticeable impact on the stock market. 

Base metal prices were mostly positive on the London Metal Exchange. The nickel price gained 1.7% to 15,688/t, while the 3-month copper contract rose by a similar magnitude to 7,095/t. Lead increased 0.4% to 2,509/t and tin also increased 0.4% to 20,705/t. The best performer was zinc that added 2.4% to 3,219/t. This is on the back of strong demand and a shortfall in supply for the commodity. Aluminium retreated 0.4% to 2,309/t.

Recent Contacts & Presentations:

Bio–Gene Technology (BGT), Walkabout Resources (WKT), Triton Minerals (TON), Calima Energy (CE1), Peel Mining (PEX), Catalyst Metals (CYL), Vault Intelligence (VLT), Doray Minerals (DRM), Nzuri Coppoer (NZC), Bowen Coking Coal (BCB), Phosphagenics Limited (POH) 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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