Market Update & Important Indicators
U.S. stocks extended their gains Monday, rebounding from an early loss, in the first trading session following the release of March's disappointing jobs report. The Dow climbed 118 points, or 0.7%, to 17,881. The Labor Department on Friday said U.S. employers added 126,000 jobs in March, the weakest pace of hiring in 15 months. With the U.S. stock market closed for the Good Friday holiday, Monday was the first chance for investors in stocks to react to the report.
The Labor report for March was the latest in a series of indicators to show U.S. economic growth has slowed in recent months. That is giving investors pause ahead of what is shaping up to be a weak first-quarter earnings season, which unofficially begins this week when Alcoa Inc. reports results after the close of trading Wednesday. Investors are contending with several forces working against corporate bottom lines. A sharply stronger dollar is reducing profits at large, multinational companies. At the same time, energy companies continue to deal with the hit to their earnings from the slump in U.S. oil prices.
Most European and Asian stock markets were closed on Monday, as was the LME. Gold is trading at 1,214/oz and Brent crude at 58.12/bbl.
In This Issue
Austal Limited (ASB) | BUY
The construction of an additional two Littoral Combat Ships (LCS) has been funded by the U.S. Navy, adding ~US$691m to ASB’s order book. With U.S. revenue visibility extending to 2020, a substantial potential pipeline thereafter, a declining A$, and a strong balance sheet, our buy themes remain intact. ASB is seeing a business re-rating, a process likely to continue if the Company can deliver consistent earnings and additional construction and support contracts. We maintain our buy call on a $2.00 price target (prior $1.80).
Recent Contacts & Presentations
Saracen (SAR), Beadell (BDR), Pacifico (PMY), Fertoz (FTZ), Atrum (ATU), Doray (DRM), Helix Resources (HLX), Rift Valley Resources (RVY), West African Resources (WAF), Austal (ASB), TFS Corporation (TFC), Buru Energy (BRU), Strandline Resources (STA), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), Migme (MIG), Vmoto (VMT)
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