Morning Notes

15/02/2018 Argonaut Morning Note

Market Update & Important Indicators
U.S. stocks climbed for a fourth consecutive session Wednesday, stabilizing despite further signs of an anticipated boost in inflation and at least temporarily easing fears of a prolonged market downturn. Consumer prices increased more than expected in January, another data point showing inflation is firming after a long run of softness. But some analysts highlighted the rise was largely driven by higher prices for gasoline, rent and apparel, which are more volatile. Fears about inflation have taken centre stage in markets since the beginning of the month, when strong wage growth sparked concerns the Federal Reserve would have to raise interest rates more quickly than expected. The Dow Jones Industrial Average and S&P 500 slumped last week into correction territory - a 10% decline from their Jan. 26 highs - but have climbed every session since then. The Dow rose 1.0%. The S&P 500 added 1.3%, and the Nasdaq Composite was recently up 1.6%. All three indexes pared early losses and are back in positive territory for the year. Wednesday's data showed that the consumer-price index gained 0.5% in January after rising a seasonally adjusted 0.2% in December. Economists surveyed by The Wall Street Journal expected consumer prices to add 0.4%. The U.S. gold price traded higher overnight, jumping 1.6% to finish at 1,350.20 US$/oz.

European shares jumped, with the Stoxx Europe 600 up 1.1% at 374.54, recovering quickly from brief sharp falls after above-forecast U.S. inflation data, which was offset by weak U.S. retail sales numbers. Germany's DAX ended up 1.2% and France's CAC up 1.1%. The U.K.'s FTSE 100 ended up 0.6%. All major Stoxx Europe 600 sectors ended higher, with basic resources, media and autos performing particularly well. Italy outperformed, with the FTSE MIB ending up 1.8%, but Spain fared less well, with the IBEX 35 up 0.4%.

In Asian trading, South Korea's Kospi gained 1.1%, helped by a 3.1% jump in Samsung Electronics. The index heavyweight extended its gains to 9.6% so far this week, clawing back most of its February losses. Japan's Nikkei fell 0.4%, weakening on a rallying yen after starting the day higher. The Japanese currency rose to a 15-month high against the dollar before softening slightly. Chinese equities reversed early declines, with both Shanghai and Shenzhen composite indexes up 0.5%. Markets in China and South Korea will be closed for the rest of the week as those countries celebrate the Lunar New Year holiday.

After a solid rebound yesterday, Australia stocks fell anew today amid a pullback in miner stocks and weakness in many consumer companies. But the biggest factor was the stock-price adjustment from Commonwealth Bank trading ex-dividend. That helped result in the No. 1 lender falling 3%, good for 13 points in the S&P/ASX 200. It fell 14.7 points, or 0.25%, to 5841.2. But it wasn't all back for Aussie stocks, with Myer ticking up 1.9% after the embattled retailer said its CEO was stepping down. And amid a flurry of earnings reports, Insurance Australia gained 3.2% and CSL jumped 5.1%.

The London Metal Exchange’s 3-month copper contract traded higher again overnight, jumping 2.5% to close at $7,163/t. The other base metals also finished higher. Aluminium prices traded 2.0% stronger at $2,174/t, while lead prices added 0.7% to close at $2,582/t. Zinc prices rose 2.8% to $3,591/t, while Tin prices lifted 0.3% to $21,650/t. Nickel prices were strongest once more, closing 4.8% higher at $14,056/t.

Recent Contacts & Presentations
Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH), Australis Oil & Gas Ltd (ATS), Explaurum Ltd (EXU), Whitebark Energy Ltd (WBE), 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)

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