Market Update & Important Indicators
U.S. stocks recovered Thursday afternoon as energy shares rebounded along with oil prices and technology shares pared losses. The moves come a day ahead of a reading on U.S. retail spending. Investors this week received gloomy updates from some of the country's largest retailers such as Macy's, fueling concerns about consumer spending and a sharp selloff in several store operators and clothing companies. But despite the rebound, many investors remain skeptical in the late innings of a weak
European stocks posted firm losses on Thursday with a crop of lackluster financial results and a slump in oil prices sapped investment appetite. The Stoxx Europe 600 dropped 0.5% to close at 333.11, erasing an earlier gain, but also coming of an intraday low of 331.40. The volatile trading day came as volatile oil prices sent investors on a roller-coaster ride. Crude was up as much as 1.7% at one point after the International Energy Agency said the glut in global oil supply will shrink "dramatically" later this year. Oil futures, however, slipped into negative territory in the afternoon, dragging European markets down with them. The loss for the pan-European index early Thursday followed Wednesday's 0.5% decline.
Asian shares slipped Thursday except in Japan, where some solid earnings helped stocks notch gains. Japan's Nikkei Stock Average finished with a 0.4% gain, while Korea's Kospi lost 0.1% and Hong Kong's Hang Seng Index closed down 0.7%. The Shanghai Composite Index was little changed. An overnight rebound in oil prices did little to boost lackluster trading across the Asia-Pacific region. Investors were disappointed by recent weak earnings in the U.S., where hopes had been building for a revival in consumer spending to lift the broader economy. Metals futures in China extended losses Thursday, as rising steel stockpiles pushed prices lower. Iron-ore futures prices slumped 3.4%, while hot-rolled-coil futures dropped 3.1%. Analysts forecast that the supply of steel will surpass demand in the second half of the year, further pressing the futures prices.
Australian shares broke a five-session run higher on Thursday as a fall in financial stocks offset gains by resources companies. Markets across the region were in the red, tracking a fall in U.S. stocks overnight on worries about the health of consumer spending that were fueled by weak earnings from retailer Macy's. Westpac acted as an anchor locally as it traded ex-dividend, offsetting gains in oil-and-gas shares. After closing the day before at a near nine-month high, the S&P/ASX 200 slipped 13 points, or 0.2%, to 5359.3. Gold miners gained, with Newcrest Mining adding 4.1% and smaller St Barbara pushing 5.2% higher.
The London Metal Exchange's three-month copper contract was down 2% at $4,613 a metric ton at the PM kerb close, a near three-month low. Among the other base metals, aluminum was down 1.2% at $1,529 a ton, zinc was down 1.9% at $1,862 a ton, nickel was down 2.9% at $8,589 a ton, lead was down 3.6% at $1,704 a ton and tin was down 3.3% at $16,679 a ton.
In this Issue
Matrix (MCE) | Deep water dry patch | HOLD
Market Cap $34m | Current Price $0.36 | Valuation $0.40
MCE’s update reflects a harsh environment. Expected 2H16 revenue and underlying EBITDA of $31.6m and $2.0m, taken with our expectations for a thin order book at June, implies another weak year to come. However, the balance sheet is positioned to ride out a tough period and leverage to an improved operating environment is significant, so we maintain a hold call on a revised valuation of $0.40 (prior $0.45).
Recent Contacts & Presentations
Red 5 (RED), Medusa Mining (MML), Saracen Mineral Holdings (SAR), Paradigm BioPharmaceuticals (PAR), Pilbara Minerals (PLS), Energia Minerals (EMX), Deep Yellow (DYL), Paladin Energy (PDN),), West Africa Resources (WAF), Finders (FND), Credo Resources (CRQ) , Orthocell (OCC), Capricorn Metals (CMM), Gold Road Resources (GOR), Otto Energy (OEL), Dakota Minerals (DKO), Cradle Resources (CXX), Kidman Resources (KDR)
