Market Update & Important Indicators:
U.S. stocks headed for fresh highs Thursday, extending gains after their best day since the presidential election. Investors have been buying stocks and selling bonds, betting that the Trump administration will usher in tax cuts, deregulation and fiscal stimulus, which they believe will support growth and inflation in the world's largest economy. All three indexes were on track to close at records. "The markets have been on a sugar high," said Kent Engelke, managing director at Capitol Securities Management. Shares of financial companies continued their postelection rally, leading gains in the S&P 500.
European stocks closed at an 11-month high, with German stocks hitting a 2016 peak as the euro was yanked down, after the European Central Bank said it would continue buying government bonds through next year, but at a lower amount each month beginning in April. The Stoxx Europe 600 index scaled up by 1.2% to close at 351.96, the best close since Jan. 6, according to FactSet data. Thursday's win is the pan-European index's fourth in a row, after rising on Wednesday by 0.9%. All sectors finished higher. The moves were made after the ECB said, among other things, it will buy €60 billion a month in government bonds, starting in April 2017 through December 2017. That compares with the €80 billion in bonds it buys a month now, with that amount to run through March 2017.
Asian equity markets mostly rose Thursday, with Japan's Nikkei hitting a new 2016 high on a fresh wave of optimism after a record close on Wall Street, and Donald Trump's announcement of the next U.S. ambassador to China. The Nikkei Stock Average climbed 1.5%, Korea's Kospi index surged 2% while Hong Kong's Hang Seng Index ended up 0.3%. Asia's strong performance followed overnight gains on Wall Street, with both the Dow Jones Industrial Average and the S&P 500 hitting record highs. Japanese stocks also benefited despite Japan growing at a slower pace than initially estimated in the July-September quarter, according to data released Thursday. Upward revisions of economic data in earlier quarters suggested that on the whole, the Japanese economy was doing reasonably well for the year. Commodity stocks in Asia were broadly higher, after iron-ore prices hit an over two-year high, as China trade data Thursday showed imports of the commodity were up 9.2% from January to November, compared with a year earlier.
Australian shares rose Thursday, led by resources stocks after iron-ore prices surged to a two-year high. The S&P/ASX 200 index closed up 1.2%, or 65.5 points, at 5543.6 as investors shrugged off an unexpected widening in Australia's deficit from A$1.3 billion in September to A$1.6 billion in October. Still, the ongoing rally in prices of iron ore is offering the economy some support as the commodity is Australia's biggest export revenue earner. At US$82.40 a ton, spot iron ore is almost double where it started the year and fetching its best price since October 2014.
Copper for delivery in three months was recently down 0.1% at $5,782/t on the London Metal Exchange. The other base metals were mainly lower overnight. Nickel prices fell 2.7% to 11,058/t, tin prices fell 0.9% at $21,047/t. Zinc prices fell 1.8% to 2,671/t whilst lead prices also sank 1.6% at 2,272/t. Meanwhile aluminium bucked the trend, rising 1.1% at 1,731/t.
In this Issue:
Metro Mining (MMI) | Consolidating Cape York Bauxite | SPEC BUY
Market Cap $79 | Current Price $0.15 | Target Price $0.35
Metro Mining (MMI) has received acceptances from 57.3% of Gulf Alumina shareholders regarding it offer to acquire all outstanding shares. In addition to the 39% already owned, MMI now controls ~96% and can progress to compulsory acquisition of Gulf. Gulf is a public unlisted Company that owns the Skardon River Bauxite Project which adjoins MMI’s Bauxite Hills Project in the Cape York Peninsula, far north Queensland. This project consolidation will double MMI’s reserves and result in synergies of up to $200m. Argonaut sees this is a highly accretive transaction which will extend mine life, enable higher production and expedite final permitting. SPEC BUY maintained with a $0.35 target price.
Recent Contacts & Presentations:
Emerald Resources NL (EMR), Metals of Africa Ltd (MTA), Stavely Minerals Ltd (SVY), Australis Oil & Gas Ltd (ATS), Davenport Resources Ltd (DAV), TFS Corporation Limited (TFC), Emmerson Resources Ltd (ERM), Syntonic Ltd (SYT), MZI Resources Ltd (MZI), Resolute Mining Ltd (RSG), Capricorn Metals Ltd (CMM), Eve Investments Ltd (EVE), Australian Mines Ltd (AUZ), Heron Resources Ltd (HRR), St George Mining Ltd (SGQ), Threat Protect Australia Ltd (TPS), Paringa Resources Ltd (PNL), The Gruden Group Ltd (GGL), Primary Gold Ltd (PGO), Vault Intelligence Ltd (VLT), Botanix Pharmaceuticals Ltd (BOT) Orthocell Ltd (OCC), Strandline Resources Ltd (STA)
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