Market Update & Important Indicators
A rare burst of volatility jolted financial markets and sent stocks tumbling Friday, a sharp shift from the tranquillity that has characterized much of the market's nearly nine-year bull-market run. The Dow Jones Industrial Average dropped 2.5%, its biggest one-day decline since the U.K.'s surprise vote to leave the European Union in June 2016. The Dow fell 665.75 points to 25520.96 Friday, its biggest one-day point drop since December 2008. For the week, the blue-chip index fell nearly 1100 points, the most since the throes of the financial crisis in October 2008, taking many traders, analysts and investors by surprise. The S&P 500 lost 59.85 points, or 2.1%, to 2762.13 and the Nasdaq Composite dropped 144.92, or 2%, to 7240.95. All three indexes remain higher in 2018, with the Dow industrials and S&P 500 up more than 3% and the Nasdaq up 4.9%. Some traders said the dour mood around stocks and bonds was amplified by Friday's political developments. House Republicans released a controversial memo alleging bias by the Federal Bureau of Investigation during its Russia investigation. Still, many other investors said the stock market is likely to remain strong due to a brightening earnings picture. Analysts' projections for U.S. earnings in 2018 have been upgraded significantly over the past month following changes to the U.S. tax code, while results for the fourth quarter have largely exceeded analysts' expectations. The U.S. gold price traded lower overnight, slipping 1.2% to finish at 1,331.90 US$/oz.
European shares closed lower, with the STOXX Europe 600 index ending down 1.4% at 388.07 after strong U.S. jobs data raised the prospect of more U.S. rate rises this year than the market previously expected. Germany's DAX ended 1.7% lower, France's CAC 40 was down 1.6% and the FTSE 100 fell 0.6%. Peripheral eurozone markets also fared badly, with Spain's IBEX 35 down 1.8% and Italy's FTSE MIB losing 1.4%.
In Asian trading Friday, stock indexes in Japan and South Korea suffered earnings-related hits. South Korea's Kospi index fell 1.7% with index heavyweight Samsung Electronics falling around 4.3% after rival Apple's latest quarterly financial results. Japan's Nikkei Stock Average closed down 0.9% following earnings-related news, and The Bank of Japan announced Friday it would buy an unlimited amount of government bonds maturing in five to 10 years at a fixed rate. The Shanghai Composite Index edged up 0.4% but still ended its worst week since December 2016.
Australian shares continued their recovery from a soft January, advancing a 3rd-straight day to notch the strongest weekly gain in over a month. Settling at session highs and bucking weakness across much of Asia Pacific, the S&P/ASX 200 rose 0.5% to 6121.4—the highest close since Jan. 9. It rose a 2nd-straight week, climbing 1.2%, after falling 0.5% for January. Australia's major banks again helped, led by CBA's 1% gain ahead of next week's F1H report. Energy stocks also continued to climb, helped by fresh oil-price gains. Santos jumped 4.3% and Woodside and Oil Search each gained more than 2% as the sector climbed 2.4%, the most in 3 months.
The London Metal Exchange’s 3-month copper contract traded lower overnight, finishing 1% lower at $7,045/t. The other base metals were mixed. Aluminium prices fell 0.7% to $2,210/t, while lead prices gained 0.6% to close at $2,704/t. Zinc prices slipped 1.5% to $3,550/t, while Tin prices added 0.6% to $21,690/t. Nickel prices were sharply lower, losing 4.0% to close at $13,400/t.
Recent Contacts & Presentations
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), Minotaur Exploration Ltd (MEP), Panoramic Resources Ltd (PAN)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
