Market Update & Important Indicators:
The Dow Jones Industrial Average retreated intraday as the dollar and government bond yields came under fresh pressure. The day's moves came after Senate Republicans gave up their efforts to dismantle and replace much of the Affordable Care Act. The struggle to pass a health-care bill has amplified doubts about the Trump administration's ability to pass policies like tax cuts and fiscal stimulus. Hopes for such policies had initially pushed stocks, the dollar and government bond yields higher after Election Day. The Dow industrials fell 55 points, or 0.3%, to 21575. The S&P 500 edged up 0.1%, and the Nasdaq Composite added 0.2%. Although stocks around the world mostly fell, some investors have said they believe the effect of policy changes on the broader stock market will ultimately be muted. The U.S. gold price continued its upward trend, rising 0.7% to finish at 1,242.00 US$/oz.
Stocks across Europe dropped, with the exporter-heavy DAX 30 index ending 1.3% lower at 12,430.39 — its worst session since June 29. More broadly, European benchmarks finished the session under pressure as the euro stepped up to a 14-month high against the U.S. dollar and as disappointing corporate earnings reports rolled in. The euro climbed to $1.1574 from $1.1479 late Monday, notching an intraday high of $1.1585. The Stoxx Europe 600 slumped 1.1% to end at 382.58, the largest percentage decline since June 29, FactSet data showed. All sectors closed in the red, led by tech and basic material shares.
Consumer cyclicals led losses in Asia-Pacific trading, as weakness in the dollar weighed hurt stocks in Japan. Weakness in the dollar filtered through Japanese stocks after Monday's holiday. The Nikkei was down 0.6% at 19999.91. Declines were led by banks and auto makers, as investor sentiment was hurt by a broadly stronger yen and with the dollar extending its weakness as questions grow over the Trump administration's ability to push legislative agenda through Congress. Chinese stocks recovered slightly after Monday's slump. The Shenzhen Composite was up 0.5%, while the Shanghai Composite added 0.4%.
Broad selling dragged Australian shares to a two-week low even as the local currency surged against the U.S. dollar on the hawkish tone from the Reserve Bank of Australia. In the sharpest decline since the end of June, the S&P/ASX 200 lost 68.1 points, or 1.2%, to settle near the session lows at 5687.4. The four largest banks weighed heavily, collectively knocking almost 24 points off the ASX 200 on reports the industry regulator is near to releasing its plans for capital targets. Energy stocks were also under heavy pressure despite a slight recovery in oil prices in Asian trading, after recent gains in crude were pared overnight. The Australian dollar climbed to its highest in two years, extending gains after the central bank released the minutes of its last policy meeting, surprising many with an upbeat view of the economy and a discussion about to where interest rate might eventually be raised.
The London Metal Exchange's three-month copper contract gained 0.18% overnight to close at $6,007/t. The other base metals finished mixed. Aluminium prices rose 0.4% to 1,905/t, nickel prices gained 1.9% at 9,733/t, whilst tin prices jumped 0.5% at 20,095/t. Zinc prices fell for the day dropping 0.9% to 2,784/t whilst lead prices shed 1.1% at 2,245/t.
Recent Contacts & Presentations:
Botanix Pharmaceuticals Ltd (BOT), Dimerix Ltd (DXB), Metro Mining Ltd (MMI), Paringa Resources Ltd (PNL), Independence Group NL (IGO), MZI Resources Ltd (MZI), Transerv Energy Ltd (TSV), Emmerson Resources Ltd (ERM), Antipa Minerals Ltd (AZY), Echo Resources Ltd (EAR), Sovereign Metals Ltd (SVM), Calidus Resources Ltd (CAI), Great Boulder Resources Ltd (GBR), Finders Resources Ltd (FND), Bionomics Ltd (BNO), Threat Protect Australia Ltd (TPS), Ramelius Resources Ltd (RMS), Zenith Energy Ltd (ZEN), Blackham Resources Ltd (BLK), Top End Minerals Ltd (TND), Northern Star Resources Ltd (NST), Xanadu Mines Ltd (XAM)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
