Market Update & Important Indicators
Wall Street stocks have finished a volatile week sharply lower following a disappointing US economic growth report and worrisome data on Eurozone inflation. The Dow Jones industrial Average slumped 251.90 points (1.45 per cent) to close Friday at 17,164.95. The broad-based S&P 500 sank 26.26 (1.30 per cent) to 1,994.99, while the tech-rich Nasdaq Composite Index fell 48.17 (1.03 per cent) to 4,635.24. US economic growth came in at an annual rate of 2.6 per cent in the fourth quarter, well below the 5.0 per cent in the prior quarter, according to Commerce Department data. Analysts also pointed to the drag from a Eurozone inflation report, which showed consumer prices fell by a record 0.6 per cent in January, raising fears deflation is taking hold in the region.
European stock markets closed down, as deflation worries deepened for the Eurozone, which was locked in crucial talks with Greece over a possible restructuring of debt. London's benchmark FTSE 100 index ended the week down 0.90 per cent on Friday at 6,749.40 points. Frankfurt's DAX 30 index shed 0.41 per cent to 10,694.32 points, and in Paris the CAC 40 fell 0.59 per cent to 4,604.25 points. Plummeting world oil prices were largely to blame for the fall in the 19-country Eurozone, already beset by weak economic growth and high unemployment, the EU's data agency Eurostat said. The euro weakened to $US1.1296 from $US1.1317 late in New York on Thursday.
Asian stock markets were mixed, with Tokyo's main index rising as traders took heart from news employment hit its lowest level since 1997, despite a slowdown in inflation and weak consumer spending. The benchmark Nikkei-225 index on the Tokyo Stock Exchange rose 0.39 per cent, or 68.17 points, to 17,674.39 at the close, with traders buoyed by a weaker yen, which boosts Japanese exporters. China shares closed the week nearly four per cent lower, pressured by concerns about market liquidity and regulatory inspections of margin trading, dealers said.
The Australian market looks set to open lower following falls on Wall Street after disappointing US economic growth report and worrisome data on Eurozone inflation. The Reserve Bank of Australia's index of commodity prices and the Australian Industry Group's performance of manufacturing (PMI) index, both for January, will be released. Meanwhile, the RP Data Core Logic Home Value Index and the TD Securities-Melbourne Institute's inflation gauge both for January, are also due out. In Australia, the market on Friday posted a seventh straight day of gains as the Australian dollar fell ahead of a potential rate cut by the Reserve Bank. The benchmark S&P/ASX200 index was up 18.8 points, or 0.34 per cent, at 5,588.3. The broader All Ordinaries index was up 19.4 points, or 0.35 per cent, at 5,551.6.
Oil prices have surged by nearly $US4 a barrel in late trade, rebounding from six-year lows on month-end covering and signs the industry is quickly tightening exploration activities. After a day trading slightly higher, around the $US45 level, the US benchmark West Texas Intermediate crude for March delivery suddenly rocketed to more than $US48. At the end of the session, WTI closed at $US48.24, a gain of $US3.71 from Thursday. In London, Brent North Sea crude for March followed a similar trajectory, trading slightly lower over most of the session and then soaring more than $US4. The contract closed at $US52.99 a barrel, a gain of $US3.46. Traders said that there was a lot of short-covering by big investors on the final trading day of the month that likely spurred the spike.
Base metals generally finished stronger overnight, with the exceptions being Lead, down 0.1% and Tin, down 0.8%. Gold gained 0.1% to $1,284/oz, Brent crude closed at US$52.99/bbl with the AUD fetching 0.776 US cents.
In This Issue
BC Iron (BCI)
BC Iron (BCI) released December Q results with 1.4Mt shipped from the Nullagine JV (NJV 75% BCI, 25% Fortescue Metals) up 46% Q-on-Q (0.95Mt) and above Argonaut’s forecast of 1.3Mt. C1 costs declined to $53/wmt (from $69/wmt) on higher production and successful management of clay issues experienced in the September Q. Cash increased by $18m to $110m and debt decreased to $43m after an $18m repayment.
Argonaut’s Stock Coverage & Recommendations
Recent Contacts & Presentations
Northern Star (NST), Doray Minerals (DRM), Troy Resources (TRY), Gold Road Resources (GOR), Saracen Mineral Holdings Limited (SAR), Beadell Resources Limited (BDR), Resolute Mining Limited (RSG), RTG Mining (RTG), Alexium International Group Limited (AJX), Pacific Energy Limited (PEA), Otto Energy Limited (OEL), Peninsula Energy Limited (PEN), Sandfire Resources NL (SFR), Atrum Coal (ATU), Empired (EPD), DTI Group (DTI), Austal (ASB), TFS Corporation (TFC), Pioneer Credit (PNC)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=”//platform.twitter.com/widgets.js”;fjs.parentNode.insertBefore(js,fjs);}}(document,”script”,”twitter-wjs”);
