Market Update & Important Indicators
U.S. stocks fell Wednesday after Federal Reserve Chairwoman Janet Yellen drew attention to elevated valuations in the equity market. Stocks traded in a wide range, with the Dow falling as much as 147 points earlier in the morning before finishing the session down 86 points, or 0.5%, at 17,842. The broader S&P 500 closed 0.4% lower at 2,080. Investors also received a disappointing report Wednesday on private-sector employment. Private payrolls in the U.S. increased by 169,000 in April, according to a report compiled by payroll processor ADP and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal had expected an increase of 205,000 jobs. This also saw the U.S. dollar drop to a two-month low against the euro on Wednesday.
European stocks rose Wednesday, spurred by some robust corporate earnings and strong data on eurozone growth from surveys of purchasing managers, although concerns over Greece's future continue to weigh. The Stoxx Europe 600, having sold off sharply Tuesday, was marginally higher by early afternoon, while individual country indexes clung to gains.
Shares in Shanghai tumbled for a second day, pushing losses on the market's benchmark index to 5.6% in two sessions, with comments by state-media failing to prop up the market on Wednesday. In Hong Kong, the Hang Seng Index was down 0.4% at 27,641, after falling 1.3% Tuesday. This market has now fallen for five straight days, although it is still up 17% year-to-date.
Copper futures closed down on the London Metal Exchange on Wednesday, as the entire metals complex settled lower and digested gains made in the previous session. Gold ended up slightly lower overnight at $1,191/oz, while Brent crude was up 0.4% at $67.77/bbl. Iron ore (62% Fines) gained 3.7% to $60.89/t.
In This Issue
Orbital (OEC) | SPEC BUY
Significant growth options are being presented to OEC by Boeing subsidiary Insitu (in the drone market), as well as in the Pilbara (REMSAFE and LNG technology). In our view OEC is a rejuvenated, opportunity-rich business, which has its downside limited by the investment in Synerject. Enhanced System Sales revenue visibility post the engine supply agreement with Insitu offsets the potential dilution from the issue of an additional $3m Convertible Notes in April. Our $1.05 valuation and recommendation are unchanged.
Recent Contacts & Presentations
Rewardle (RXH), Alexium (AJX), Ausdrill (ASL), Tox Free (TOX), OBJ Limited (OBJ), Cash Converters (CCV), Decmil (DCG), TFS Corporation (TFC), Imdex (IMD), Mobile Embrace (MBE), Dacian (DCN), Saracen (SAR), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MZI Resources (MZI), High Peak Royalties (HPR)