Morning Notes

06/07/2018 - Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks climbed intraday as investors looked beyond a looming deadline for tariffs to upcoming economic data and a potential de-escalation of some trade tensions. The Dow Jones Industrial Average gained 182 points, or 0.8%, to 24357 in recent trading. The S&P 500 rose 0.9% and the Nasdaq Composite added 0.8%. Major indexes slightly pared their gains after minutes from the Federal Reserve's latest meeting revealed growing unease with how trade policy could hold back business investment. The Fed said some businesses contacts have scaled back or shelved plans for new investments in the face of uncertain trade policy changes. The U.S. is scheduled to impose tariffs on $34 billion of Chinese imports Friday, and China is expected to counter with corresponding tariffs on U.S. imports, as the world's two biggest economies remain locked in a trade dispute that has roiled financial markets for months. The US gold price gained 0.1% to 1,257 US$/oz.

The Stoxx Europe 600 index closed up 0.4% at 381.59, lifted by reports that the U.S. may not impose a tariff on EU cars and by earlier strong German factory orders. However, trade-war fears linger and limit any rise. Germany's DAX outperformed, ending up 1.2%, with car stocks particularly strong. France's CAC 40 ended up 0.9%, while Spain's IBEX 35 and Italy's FTSE MIB both ended just over 1% higher. The U.K.'s FTSE 100 index rises by less, ending up 0.4%.

Stocks around the world were under pressure as investors braced for the implementation of trade restrictions between the U.S. and China. A Chinese official warned that planned U.S. tariffs on Chinese products will hurt companies around the globe as many of the goods targeted by the U.S. administration are made by foreign companies in China.  The U.S. is scheduled to impose tariffs on $34 billion of Chinese imports on Friday and China is expected to counter with corresponding tariffs on U.S. imports as the world's two biggest economies remain locked in a trade dispute that has roiled financial markets for months. In Asia, Japan's Nikkei Stock Average finished down 0.8% while Hong Kong's Hang Seng Index shed 1.1%. Meanwhile, Indian shares edged lower amid weakness in other regional markets. The S&P BSE Sensex closed 0.2% lower at 35,574.55. Investors are also awaiting cues from corporate earnings that start next week. 

Australian stocks once again outperformed the region, snapping back from Wednesday's drop as traditional yield plays lured buyers. Finishing up 0.5% at 6215.5, the S&P/ASX 200 is back in positive territory for the week. The heavily weighted financial sector helped drive gains as Macquarie, ANZ and CBA all rose 1.2%. Utilities and telecom -- both traditional yield plays -- also outpaced, with Telstra up a further 1.9% in rebounding for a fourth day. But miners lost ground after overnight weakness in base metals and another leg lower by Chinese iron-ore futures as U.S./China trade tariffs loom.

Base metal prices were mostly down on the London Metal Exchange. The largest falls were seen in tin, falling 1%, and the 3-month copper contract falling 0.7%. Declines were also seen in aluminium that fell 0.6% to 2,102/t, zinc that lost 0.5% to finish at 2,738/t. Lead was a leading performer and gained 1.4% to end a 2,352/t. Nickel also rebounded, putting on 0.4% to end at 14,104/t.

Recent Contacts & Presentations:

Agrimin (AMN), Magnetic Resources (MAU), Core Exploration (CXO), Marindi Metals (MZN), MOD Resources (MOD), Santos (STO), Adriatic Metals (ADT) 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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