Market Update & Important Indicators:
U.S. stocks swung between slight gains and losses Thursday. Some traders said early declines led by health-care shares were mitigated by fresh hopes that the European Central Bank was holding course on easy money policies. The moves came as data showed U.S. jobless claims near a four-decade low. A strong employment report Friday could reassure investors that the U.S. economy remains on track, while bolstering the case for the Federal Reserve to raise interest rates in December. Investors remain divided on the prospect of higher U.S. rates this year. Federal Reserve Bank of Richmond President Jeffrey Lacker said on Wednesday that current economic conditions provide a "strong case" to raise short-term interest rates "more rapidly." Fed-fund futures, which traders use to place bets on central bank policy, showed a roughly 64% chance of rate increase by December, according to CME Group.
European stocks closed in negative territory, as airline shares were punished after a profit warning from EasyJet PLC, but bank shares rebounded. The Stoxx Europe 600 fell 0.4% to end at 342.82, relinquishing gains posted earlier in the day. The index on Wednesday dropped 0.6%, the first loss in seven sessions, following a Bloomberg report the European Central Bank was considering winding down monthly bond purchases before March, when the program was scheduled to end. The ECB had denied that such discussion took place. Minutes released Thursday from the ECB's meeting in September showed policy makers remained focused on trying to pump up slack Eurozone inflation levels. Late Thursday, ECB's Vice President Vitor Constancio said quantitative easing will keep running until inflation is back toward the bank's target of below, but close, to 2%.
Asian shares were broadly higher on Thursday, lifted by solid U.S. economic data that also helped weaken the Japanese yen. The Nikkei Stock Average closed up 0.5%, as Japanese exporters benefited from the yen's decline. Meanwhile, Hong Kong's Hang Seng Index added 0.7%, and Korea's Kospi closed up 0.6%. Markets in China are closed for the Golden Week holiday. The yen fell 0.3% against the greenback during Asian trade and was down 2.3% over the past week, amid indicators the U.S. economy is strengthening. Asian stock markets were also given a boost from the 2% overnight jump in crude-oil prices, after data showed that U.S. crude stockpiles fell for the fifth consecutive week. West Texas Intermediate, a crude benchmark, slipped 38 cents in Asian trade but was still hovering just below $50 a barrel.
Another surge in oil prices buoyed Australian energy stocks and helped lift the domestic equities market on Thursday. Helped by gains among miners and big banks, the local market erased the previous session's drop as it tracked the rebound in major U.S. indexes after oil prices neared US$50 a barrel and investors cheered solid U.S. economic data. The S&P/ASX 200 picked up 30.1 points, or 0.6%, to 5483.0. The energy sector led gains, climbing 2%. Oil prices rose Wednesday after data showed that U.S. crude stockpiles fell for a fifth consecutive week, with the benchmark rising 2.3% to US$49.83 a barrel, its highest settlement since late June.
On the London Metal Exchange, copper for delivery in three months was down 0.9% at $4,756/t. Aluminium was up 0.1% at $1,670/t, zinc was down 0.9% at $2,313/t, lead was up 0.4% at $2,045/t, tin was up 0.9% at $20,173/t, and nickel was up 1.7% at $10,205/t.
Thought of the day:
Argonaut Metals and Mining
September Quarter Preview
Argonaut provides a preview for the September Q 2016. Gold and gold equities have been the outperformers, with gold hitting US$1,316/A$1,723oz at September 30. Iron Ore continues to surprise, with prices touching US$62/dmt during the Q as sentiment and construction activity in China remained strong. In the near to medium term, Argonaut prefers zinc amongst the base metals and sees continued strength in AUD domiciled gold. Production forecasts and stock specific comments are detailed in Table 1 (page 2 of linked report).
Recent Contacts & Presentations:
Breaker Resources NL (BRB), Bard1 Life Sciences Ltd (BD1), Alto Metals Ltd (AME), Birimian Limited (BGS), Antipa Minerals Ltd (AZY), Vault Intelligence Ltd (VLT), Noxopharm Ltd (NOX), Gage Roads Brewing Co. (GRB), West African Resources (WAF), Cedar Woods Properties Ltd (CWP), Sino Gas & Energy Holdings Ltd (SEH), Salt Lake Potash Ltd (SO4), Kalina Power Ltd (KPO), Austal Limited (ASB), Agrimin Ltd (AMN), Stavely Minerals Ltd (SVY), MGC Pharmaceuticals Ltd (MXC), Vital Metals Ltd (VML), Tox Free Solutions Ltd (TOX), Swick Mining Services Ltd (SWK), Davenport Resources Ltd (DAV), Orthocell Ltd (OCC), BC Iron Limited (BCI), ALT Resources Ltd (ARS)