Market Update & Important Indicators:
U.S. stocks rallied Wednesday, the latest twist in a U.S. presidential election that sent global markets into a tailspin overnight. The Dow Jones Industrial Average soared more than 200 points and the 10-year Treasury yield rose above 2% after Donald Trump's surprise victory, which overnight had sent U.S. stock futures sliding as much as 5% and havens like the Japanese yen soaring. Investors and traders said they were reassured in the early hours of Wednesday that there was a clear winner and that there would be a smooth transfer of power, points underscored by Hillary Clinton's concession speech. Remarks by Mr. Trump and House Speaker Paul Ryan also boosted hopes that a unified Republican government could achieve legislation aimed at increasing the tepid pace of economic growth. Several investors said they weren't sure exactly what policies the president-elect might pursue, but his comments on increased infrastructure spending and tax cuts signalled policies that could widen the U.S. deficit and push up inflation. At the same time, funnelling money into the private sector could boost corporate earnings, lifting the prices of stocks. The S&P 500 was recently up 1.1%, and the Nasdaq Composite added 0.9%.
European markets opened with a thud Wednesday, following a steep drop in Japanese equities. But risk assets staged a remarkable recovery during European morning trading hours as the initial shock wore off and U.S. President-elect Donald Trump vowed to begin the "urgent task of rebuilding our nation and renewing the American dream. As a result the Stoxx Europe 600 reversed course and ended 1.5% higher.
Asian equity markets tumbled Wednesday as investors reacted to the probability of Donald Trump becoming the next U.S. president. The Nikkei Stock Average ended down 5.4%. Korea's Kospi fell 2.3%, the Shanghai Composite Index shed 0.6%, and the Hang Seng Index in Hong Kong retreated 2.2%. Shares in banks and large exporters in particular dipped lower as a result. In terms of trading activity, investors were either keeping to the sidelines or buying put options in European and U.S. equities indexes.
Australian shares fell sharply Wednesday as investors braced for the possibility Donald Trump and the Republican party will sweep U.S. elections. With all sectors in the red, the S&P/ASX 200 dropped 101.2 points, or 1.9%, to 5156.6–its lowest closing level since June 29. It was a day of wild swings for the market, which was up by more than 1% after midday only to dive by as much as 3.9% as polls began to reflect the possibility Mr. Trump could win. By comparison, the ASX 200 lost 3.2% following the British vote to exit the European Union. Energy stocks were the hardest hit Wednesday, with the sector diving 3.8% as oil prices continued to sink in Asian trade amid investor jitters over the election. After rising early in the day, bank stocks were also beaten back and weighed heavily. Gold miners were one of the few bright spots for the market, benefiting from a jump in the precious metal as investors sought out perceived safe-haven assets.
The London Metal Exchange's three-month copper contract closed up 3.4% at $5,413/t. Aluminium closed up 1.6% at $1,753/t, zinc closed up 0.5% at $2,476/t, nickel closed up 2.8% at $11,533/t, and lead closed up 0.9% at $2,129/t. Tin bucked the trend, closing down 1.4% at $21,340/t.
In this Issue:
Metro Mining (MMI) | Gulf War III |SPEC BUY
Market Cap: $63m | Current Price $0.12 | Target Price $0.28
Metro Mining (MMI) is locked in a takeover battle for Gulf Alumina with China’s Moly Mines (ASX:MOL). Gulf is a public unlisted company which owns the Skardon River bauxite project which bisects MMI’s Bauxite Hills’ project in North Queensland. MMI first bid for Gulf in December 2015 attaining 22% of the Company. Subsequently, MMI has increased its holding to 39%. In September 2016, MOL made a bid for Gulf which was quickly trumped by a superior offer by MMI. Yesterday, MOL increased its offer, however it appears inferior to MMI. The joint development of the Bauxite Hills and Skardon River project would be highly accretive based on shared infrastructure and joint resources.
Recent Contacts & Presentations:
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), Gascoyne Resources Ltd (GCY), Dacian Gold (DCN), Orocobre Ltd (ORE), Alchemy Resources Ltd (ALY), Acacia Coal Ltd (AJC), Minotaur Exploration Ltd (MEP), Northern Minerals Ltd (NTU), Walkabout Resources Ltd (WKT), Antipa Minerals Ltd (AZY), Noxopharm Limited (NOX), Botanix Pharmaceuticals Ltd (BOT), 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)
Please read Argonaut's Important Disclaimers & disclosures