Market Update & Important Indicators:
U.S. stocks edged higher intraday on hopes the U.S. and China will return to trade discussions, while the technology sector started to bounce back after a three-session downturn. The Dow Jones Industrial Average added 108 points, or 0.4%, to 25,415. The S&P 500 gained 0.5%, and the tech-heavy Nasdaq Composite rose 0.7%. Dow futures jumped higher minutes before the market opened after Bloomberg News reported the U.S. and China would return to trade discussions. The potential talks haven't been firmed up, but it was agreed they needed to happen, Bloomberg reported, citing sources familiar with the matter. Shares of Dow components 3M, Boeing and Caterpillar all rose, while the industrial sector was the best performer in the S&P 500, rising 2.1%. The US gold price was up 0.2% to record 1,223.40 US$/oz.
The Stoxx Europe 600 index closed up 0.2% at 391.61, as U.K. stocks outperformed after solid results from oil giant BP. Other oil and mining stocks also gained, while Italian aerospace group Leonardo jumped 10.6% after second-quarter results topped expectations. Simmering trade tensions between the U.S. and China helped equity sentiment more broadly. Germany's DAX closed up 0.1%, France's CAC 40 was up 0.4% and the U.K.'s FTSE 100 was up 0.6%. Italy's FTSE MIB ended up 1.3% and Spain's IBEX 35 was up 0.2%.
Broad, though generally modest, declines during the morning in Asian stocks turned into slight gains by the end of the day and on news that included market moves courtesy of the Bank of Japan and China releasing more muted economic data. But benchmarks in both countries finished little changed. Tiny gains were also seen Down Under and in Taiwan and South Korea. Hong Kong was a laggard, and the Hang Seng set its first three-month losing streak since 2016. That as most indexes in the region have or will log gains for July. Two of the month's best performers, though, limped to the finish. The Philippines' benchmark fell 1.3%, cutting the month's bounce to 6.6%, and Indonesia's JSX was down nearly 2% after seven straight gains. Singapore's benchmark share index closed higher, recovering after a weak start amid gains in some heavyweight counters. The Straits Times Index closes 0.4% higher at 3319.85, though losers outnumbered gainers 209 to 178. DBS Group and Oversea-Chinese Banking, both with a heavy weighting in the index, closed 0.4% higher.
A 12-point adjustment lower at session-end nearly wiped out the day's gains for Australia's stock benchmark as some major banks lost steam. After a choppy session, the S&P/ASX 200 finished up 1.8 points at 6,280.2, buoyed by resources stocks and a third-straight advance for Telstra. Though higher through most of the afternoon, the Big 4 banks ended mixed, ranging from down 0.2% to up 0.3%. Meanwhile, tech lost 2.1%, tracking overnight weakness on Wall Street. For the month, the ASX 200 rose 1.4%, the fourth-straight monthly gain. It hasn't had such a run since 2013.
Base metal prices were mostly up on the London Metal Exchange. Larger gains were seen in zinc, that increased 2.2% to close at 2,676/t. Nickel finished 1.3% higher at 13,939/t, as the 3-month copper contract found 0.9% to end at 6,279/t. Aluminium retreated 0.7% and ended at 2,061/t.
In this issue:
Gage Roads (GRB) | Continues to impress | BUY
Market Cap $111m | Current Price $0.110 | Target Price $0.123
GRB has kept up the positive momentum with a strong 4Q18 performance and an impressive $4.5m EBITDA (unaudited) for FY18. This was driven by increased volumes and the shift to higher-margin proprietary products, which made up 39% of the total sales mix. The “brand in hand” strategy has not only demonstrably boosted brand awareness, but looks to have made a contribution to earnings given an overall GP margin of 62%. We have upped FY19 forecasts given the strong 2H18 outturn, and largely maintain forecasts further out. Our target price, based on longer-term expectations, climbs to $0.123 (prior $0.117). We like the sector appeal and strategic execution to date. BUY maintained
Salt Lake Potash (SO4) |Scoping Study for the Lake Way demonstration plant
Market Cap $87.5m | Current Price $0.50
SO4 have released a scoping study for the demonstration plant on Lake Way. SO4 plans to develop a 50k t/pa Sulphate of Potash (SOP) project on the Blackham Resources mining tenements on the Lake. Development of the project on an existing mining lease, close to infrastructure and on transport routes is a clever strategy in terms of proving to providers of capital and customers that it is possible to develop a project in WA. The plant will cost A$49m to build and will initially use the high-grade brine from the Williamson Pit and then from extracted brine on the part of the lake in the Blackham leases. SO4 will also progress a larger project on the portion of Lake Way covered by its leases and the larger project will ultimately absorb the demonstration project. We retain our Speculative Buy recommendation.
Recent Contacts & Presentations:
Antipa Minerals (AZY), SRG Ltd (SRG) Bowen Coking Coal (BCB), Birimian (BGS), Breaker Resources (BRB), Galena Mining (G1A), Valmec (VMX),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)