Market Update & Important Indicators:
The Dow Jones Industrial Average extended its gains Monday, after a series of strong corporate results propelled the blue-chip index to a record at the end of last week. The Dow industrials gained 61 points, or 0.3%, to 21891. The S&P 500 was little changed, and the Nasdaq Composite slipped 0.4%, dragged down by a decline in technology stocks. Tech stocks in the S&P 500 fell 0.5%. Still, the Nasdaq is on track to end July around 3.4% higher. The Dow is up about 2.6% for the month, while the S&P has gained about 2%. Corporate earnings reports have been broadly supportive of stock markets in July, particularly in the U.S. Large U.S. companies are on pace to post two consecutive quarters of double-digit profit growth for the first time since 2011, according to data from Thomson Reuters. The U.S. gold price was largely unchanged overnight, dropping slightly to 1,268.80 US$/oz.
European stocks turned lower Monday, as gains for mining stocks couldn't offset concerns about persistent strength in the euro as investors finished up trading for July. The Stoxx Europe 600 slipped 0.1% to close at 377.85, languishing at its lowest since April, according to FactSet data. Consumer-related, industrial and tech shares fell, but utility and health care stocks were among the advancers. Monday's loss shoved the pan-European benchmark into the red for July, marking a decline of 0.4%. That adds to June's pullback of 2.7%. Equities overall swung lower as the euro pushed close to $1.18 against the U.S. dollar, where it hasn't traded above since January 2015.
Japan's Nikkei Stock Average concluded its worst monthly performance since March after falling 0.2%. Asian stock markets otherwise climbed Monday in late trading to conclude a robust month for most major indexes in the region. Hong Kong's Hang Seng Index rose 1.3% amid gains in technology companies and banks, ending the month around 6.1% higher. The index hasn't logged a monthly decline this year, its longest winning streak since 2007. The Shanghai Composite Index added 0.6% Monday, for a monthly gain of 2.5%. Investors showed little reaction to the missile firing by North Korea. South Korea's Kospi was up less than 0.1% on Monday and 0.5% on the month.
Miners carried Australian stocks to a firmer finish Monday, buoyed by gains in commodity prices on the back of manufacturing data from China. A modest gain for the local market took back some of Friday's steep fall and comes as investors prepare for the start of corporate earnings season, but wasn't strong enough for the benchmark index to notch up a gain for the month. Fading in the final hours of trading, the S&P/ASX 200 gained 17.8 points, or 0.3%, to settle at 5720.6. That left the index down for a third straight month, albeit with a loss of less than 1 point. The materials sector was the primary driver Monday, aided by gains in energy stocks as oil prices added to last week's gains, while healthcare, property and telecommunications stocks lost ground. Chinese iron-ore futures hit their best levels in about four months. Copper also strengthened, rising back toward its highest prices in two years.
The London Metal Exchange's three-month copper contract closed 0.7% higher overnight to finish at $6,369/t. All other base metals finished higher. Nickel prices rose 0.1% to 10,169/t, whilst tin prices rose 0.3% to 20,795/t. Aluminium prices rose 0.6% to 1,896/t, whilst lead prices added 0.4% to 2,308/t. Zinc prices rose 0.7% at 2,785/t.
In this Issue:
Salt Lake Potash (SO4) | June Quarterly | SPEC BUY
Market Cap $70m | Current Price $0.40
The June 2017 quarterly report detailed ongoing work across the lakes comprising the Goldfields Salt Lakes Project (GSLP), and the $17.6m placement in May puts the Company in a strong position to maintain development momentum in FY18. Additional data from hydrogeological testing, and ongoing evaporation pond and process testwork provide valuable information and inputs for the design of a 20-40ktpa Pilot Plant. Progress here should accelerate initial production, provide early product to market, and significantly de-risk a full scale plant.
Sino Gas and Energy (SEH) June Q Results | BUY
Market Cap $182m | Current Price $0.09 | Target Price $0.24
Sino Gas and Energy (SEH) released June Q results with a 10% increase to the average production rate to 17MMscf/d. The guidance range for 2017 has been narrowed towards the lower end of the initially stated rage, decreasing from 18-23MMscf/d to 18-21MMscf/d. Both the Sanjiaobei (SJB) and Linxing (LX) Profit Sharing Centres (PSC) are on track to submit Overall Development Plans (ODP) in H2 2017. At 30 June SEH had US$37m cash and US$10m drawn debt. BUY maintained with a $0.24 target price.
Finders Resources (FND) | Strong production, chipping away at debt | Buy
Market Cap $156m | Current Price $0.21 | Target Price $0.26
Finders Resources (FND) delivered another strong quarter, with 6.8kt copper cathode production at an all-in sustaining cost (AISC) of US$1.33/lb (vs March Q 6.1kt @ US$1.38/lb). The Company continues to decrease debt, which declined US$8.9m to US$74.6m at 30 June. Argonaut considers FND a key pick in the ASX base metal sector, based on stabilising operations, exploration upside and rising copper prices. FND is amongst the limited number of ASX listed copper producer that generates strong margins below US$2.50/lb. BUY maintained with a $0.26 target price.
Recent Contacts & Presentations:
Gage Roads Brewing Co Ltd (GRB), Stavely Minerals Ltd (SVY), Orbital Corporation Ltd (OEC), 4Ds Memory Ltd (4DS), Kin Mining NL (KIN), Pharmaust Limited (PAA), 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)