Market Update & Important Indicators:
The Dow industrials declined 0.2% in recent trading, cutting its monthly gain to 0.5%. The S&P 500, meanwhile, fell 0.8%, as the broad index tested its 50-day moving average before turning slightly lower. The Nasdaq Composite also was down, falling 0.6%. The S&P 500 is up 0.6% in April, while the Nasdaq Composite has added 0.3%. Arconic was the biggest drag on the S&P 500, with shares falling 19% after the company lowered its 2018 guidance, saying it now expects higher revenue but lower per-share earnings. That pulled the broader industrial segment of the S&P 500 down 1.1%. Health-care companies in the S&P 500 fell 1.2%. Shares of Marathon Petroleum fell 7.5% after the company announced a $23 billion deal to buy rival Andeavor to create the largest American oil refiner. Andeavor shares, however, rose 13%. Shares of telecommunications companies also struggled after T-Mobile US announced a $26 billion deal to buy Sprint over the weekend. T-Mobile shares fell 6.6%, while Sprint tumbled 14%. Verizon Communications, another big S&P 500 decliner, shed 3.5%.
The Stoxx Europe 600 closed up 0.2% at 385.31 as a rise in U.S. bond yields boosted the dollar. Germany's DAX ended up 0.3%, France's CAC 40 was up 0.7%, and the FTSE 100 up 0.1%. Spain's Ibex 35 rose higher, closing up 0.6%, while Italy's FTSE MIB was up 0.2%. U.K. retailer Sainsbury led the top pan-European risers, up 14.5% after news that it could buy Walmart's British arm Asda. Ad giant WPP rose 8.44% after it beat sales forecasts. Thyssenkrupp shares shed 2.4% amid continuing uncertainty over whether European steel exports to the U.S. could face new tariffs.
In Asia, Hong Kong's Hang Seng Index jumped 1.7% while Singapore's benchmark Straits Times Index hit a fresh 10-year high after a strong start to banks' earnings season. Markets in China and Japan are closed for public holidays. In data released Monday, China's official manufacturing purchasing managers index inched down to 51.4 in April from 51.5 in March, the National Bureau of Statistics said. A reading above 50 indicates an expansion and the index has been above that level for 21 months, the longest run since the end of 2014.
Rising further today, Australia's stock benchmark capped its first winning month of the year and biggest increase since October at 3.9%. The S&P/ASX 200 rose 0.5% today to 5982.7, a 7-week closing best, helped by broad gains and a further uptick for the big banks. Although resource stocks lagged this day, the energy sector jumped 11% this month and materials 7.6%. In contrast, financials rose but 0.1%.
The London Metal Exchange’s 3-month copper contract gained 0.2% to 6770/t. The other base metals were mixed overnight. Lead prices fell by 1.0% to 2,321/t, whilst zinc prices declined to 3,126/t. Nickel finished 1.7% lower at 13,593/t, aluminium increased by 1.6% at 2,257/t. Tin Prices increased 1.3% to 21,315/t.
In this issue:
Northern Star Resources (NST) | Calm before the production storm | HOLD Market Cap $4120m| Current Price $6.39 Target Price: $6.12
Northern Star (NST) delivered a lower March Q, producing 124koz at an all-in sustaining cost (AISC) of A 1,075/oz (-4% on production, +1% on costs vs the Dec Q). Underlying free cashflow from operations was $32m (-8% from $34.9m in Dec Q). Net cash and investments increased to $439.1 (+1% Q-o-Q). Group milled tonnes fell by 6%, largely as a result of the cessation of production at Paulsens which impacted group throughput. Despite the lower production, NST is achieving record throughput and mining rates throughout the portfolio, reflecting the investment in the 600kozpa growth strategy. June Q production is now forecast at 150koz (>20% QoQ) which would see FY18 production reach the middle of the refined 540-560koz guidance range. Maintain HOLD and TP of $6.12.
Recent Contacts & Presentations:
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 (SEH)