03/08/2018 – Argonaut Morning Note

Market Update & Important Indicators:

Shares of technology companies rallied intraday to lift the S&P 500, even as investors grappled with the Trump administration's threat to deepen its trade spat with China. Tech stocks continued to flex their muscles after several more companies, including car maker Tesla and software company Global Payments, reported upbeat results. The gains spilled over to the broader tech sector, while a post-earnings bounce helped to push Apple's market value above $1 trillion in recent trading, making it the first U.S. company ever to surpass that mark. Even after companies like Facebook and Netflix disappointed investors with weaker-than-expected results, tech firms in the S&P 500 are on pace to grow earnings by 32% from a year earlier, topping the rosy estimates analysts had pegged to the sector last month, according to FactSet. The Dow Jones Industrial Average fell 8 points, or 0.1%, to 25,326 as trade-sensitive stocks like Boeing pulled the blue-chip index lower. The US gold price was down 0.7% to record 1,207.20 US$/oz.

 European stocks finished the session firmly lower as trade tensions between the U.S. and China appeared to be experiencing fresh escalation, with Germany's main benchmark dragged down by concerns about the impact of tariff action. Disappointing earnings updates from Siemens and BMW added to the downbeat mood, and the Bank of England lifted U.K. borrowing costs, as expected. The Stoxx Europe 600 index shed 0.8% to close at 386.64, logging its second consecutive loss. Germany's DAX 30 index fell 1.5% to end at 12,546.33 amid disappointing financial updates from key names. The U.K.'s FTSE 100 index tumbled 1% to 7,575.93, with losses for the benchmark gathering steam after the Bank of England raised its bank rate by 25 basis points, in an unexpectedly unanimous decision by policy makers. Italy's FTSE ended down 1.7% at 21,414.72, while Spain's IBEX 35 fell 1% to 9,698.20. France's CAC 40 index declined by 0.7% to 5,460.98.

 In Asia, the Shanghai Composite Index dropped 2% and Hong Kong's Hang Seng fell 2.3%. Japan's Nikkei and South Korea's Kospi were also down, by 1% and 1.6%, respectively. On Wednesday the Trump administration threatened to more than double proposed tariffs on $200 billion of Chinese goods to 25%, up from an original 10%. While the administration didn't give specific reasons for the potential increase, industry officials who have discussed the move with the White House say one reason is to compensate for a declining yuan.

 Australia's stock market sagged in the afternoon under the weight of big declines elsewhere in the region and weak mining shares, but still held up better than most. Settling at the session low, the S&P/ASX 200 fell 0.55% to 6240.9, its sixth decline in nine days. After overnight drops in commodity prices and caution on industry cost inflation after Rio Tinto's first half report, the materials sector dropped 2.2%, led by a 4.9% slump in Rio and 3.3% loss for BHP. The major banks were in the red, and only the industrials and consumer staples sectors managed to eke out gains.

 Base metal prices were down on the London Metal Exchange. Nickel was the again biggest mover, down 1.9% to 13,237/t, followed by tin that lost 1.3%. The 3-month copper contract fell 0.6% to 6,111/t, as aluminium fell 0.9% to 2,011/t. Zinc appreciated 0.3% to close at 2,622/t. 

Saturn Metals (STN), 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)

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