Morning Notes

13/07/2018 Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks rose Thursday, putting major indexes on track for a rebound from a midweek selloff. Shares of technology companies led the stock market higher. A major software-deal announcement appeared to fuel the buying spree, sending the S&P 500 technology sector up more than 1%. The Dow Jones Industrial Average rose 0.8% in the last half-hour of trading. The S&P 500 gained 0.9%, while the tech-heavy Nasdaq Composite added 1.3%. CA led tech firms and the broader S&P 500 higher after Broadcom agreed late Wednesday to buy the software company for $18.9 billion. Shares of CA rose 18% and appeared to boost the stocks of other software companies that trade in the S&P 500, including Red Hat and Autodesk, up more than 3% each, while Salesforce.com added 2.4%. Shares of Lockheed Martin rose 2%, while Boeing, a Dow component, added 1.5%. Airline stocks got a boost after Delta Air Lines reported profits that beat analyst expectations, even though the company said higher fuel costs will weigh on profits for the rest of the year. Shares of Delta added 1.5%. Overall, profit results are expected to build on the strong first quarter, analysts said. S&P 500 companies are expected to increase second-quarter earnings 20% from a year earlier. That should help stabilize stock prices and push major indexes higher, with analysts predicting a 13% price increase in the S&P 500 over the next 12 months, FactSet said. The US gold price gained 0.5% to record 1246.90 US$/oz.

European stock markets finished solidly higher Thursday, recovering a portion of the losses after the prior day's selloff that came amid heightened concerns of a global trade war. The U.K.'s FTSE 100 index ended up 0.8%, while France's CAC 40 index jumped by 1%, marking its largest one-day gain since June 22, according to WSJ Market Data Group. Germany's DAX 30 index rose 0.6%.

Escalating trade tensions and falling oil prices. Hong Kong's Hang Seng was up 0.6% while the Shanghai Composite Index rose 2.2%. Japan's Nikkei rose 1.2%. Hong Kong-listed shares in Chinese telecommunications equipment maker ZTE soared 25% Thursday, after the company cleared the last major hurdle to lifting U.S. sanctions. Thursday's gains in Asian equities come as China guided the yuan to its largest one-day drop against the U.S. dollar in a year and a half. The central bank, which determines a daily dollar-yuan exchange rate and allows the currency to trade within 2% of that level, set the dollar's reference rate at 6.6726 yuan.

Despite a 10-point end-of-day adjustment lower, Australia's stock benchmark still more than offset Wednesday's drop as the index remains near 10 1/2-year highs. Amid solid gains in large chunks of Asia-Pacific, the S&P/ASX 200 climbed 0.85% after two days of declines. Banks again led, with the Big 4 up 1.6% to 2.2%, while health care jumped 2.3% as CSL and Sonic outperformed. But BHP Billiton and Rio Tinto weighed on the miners and the energy sector dropped 1.1% on the overnight plunge in oil prices that was slightly offset in Asian trading.

Base metal prices were up on the London Metal Exchange. The 3-month copper contract gained 1.3% to 6210/t. Lead finished 0.6% higher to 2,193/t, Zinc gained 0.1% to record 2,590/t, while nickel increased 2.3% to finish at 14,099/t. Tin gained 1.4% to 19,730/t. The price of aluminium declined 0.3% to 2,092/t. 

Recent Contacts & Presentations:

Bryah Resources (BYH), Calima Energy (CE1) Genesis Minerals (GMD), 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 (SHE)

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