Market Update & Important Indicators
U.S. stocks rose Friday but still notched their biggest weekly loss in months, as investors were shaken by disappointing earnings results and an escalation of threats between the U.S. and North Korea. The rhetoric, which began late Tuesday and continued into Friday, interrupted stocks' march higher and cracked the calm that has enveloped the market for months. The Dow Jones Industrial Average, which had been steadily hitting records, posted its biggest decline since May on Thursday, while the CBOE Volatility Index, known as Wall Street's "fear gauge," rose to its highest level of the year. Markets recovered slightly Friday. The Dow industrials rose 14.31 points, or less than 0.1%, to 21858.32 on Friday. The S&P 500 added 3.11 points, or 0.1%, to 2441.32, ending the week down 1.4%, its biggest loss since March. Major stock indexes across Europe and Asia also posted weekly declines. On average, the S&P 500 falls 5% or more every 10 weeks and the index falls 10% every 33 weeks, according to data analysed by AllianceBernstein going back to 1928. It has been more than a year since the last 5% downdraft in stocks and more than 76 weeks since the stock market suffered a 10% loss. The U.S. gold price held onto gains overnight, adding another 0.2% to finish at 1,288.70 US$/oz.
European stocks sold off Friday, wrapping up their worst week in nine months, as the war of words between the U.S. and North Korea prompted investors to back away from assets perceived as risky. The Stoxx Europe 600 closed down 1% to 372.14, the weakest finish since Feb. 28. No sector finished higher. For the week, the index fell 2.7%, the worst week since early November 2016, just before the U.S. presidential election was held.
Asian stocks fell again Friday following an escalation of threats exchanged between the U.S. and North Korea. Benchmarks in Hong Kong and South Korea–which had been one of the best performers of 2017–closed down 2% and 1.7% respectively, Friday, putting the week's drop at 2.5% and 3.2%. Korea's Samsung Electronics fell 2.8% Friday and was down 6.1% on the week. China's Tencent Holdings, whose surge of about 70% in 2017 was key to the Hang Seng's gains, fell 4.9% Friday. Despite the drop, markets have shown resilience, with Korea's Kospi still up 14.5% in 2017. The Hang Seng is up 22.2% for the year. In China, selling deepened as Friday progressed. Beijing warned of irrational trading in metals, with steel-rebar futures down 2.7% this year.
Australian companies were swept lower with the global selldown of stocks amid rising tensions between North Korea and the U.S., with the S&P/ASX 200 logging the sharpest drop in 2 weeks. After the steep opening fall, the market kicked along in a fairly narrow range with most sectors in the red and the index settling down 1.2% at 5693.1, for a weekly fall of 0.5%. Gold miners were among the few bright spots after the bullion price hit a 20-month high overnight.
The London Metal Exchange's three-month copper contract closed lower overnight, dropping 0.2% to $6,411/t. The other base metals finished mixed. Aluminium prices rose 0.3% to 2,038/t, whilst lead prices lost 1.7% to 2,305/t. Tin prices were also marginally higher, rising 0.1% to 20,420/t, whilst zinc prices traded 1.5% lower to 2,883/t. Nickel prices were the weakest overnight, falling 2.9% to finish at 10,616/t, paring back from 4-month highs reached after 4 straight days of gains.
Recent Contacts & Presentations
New Century Zinc Ltd (NCZ), Metal Bank Ltd (MBK), Rift Valley Resources Ltd (RVY), Panoramic Resources Ltd (PAN), Doray Minerals Ltd (DRM), Wellard Limited (WLD), Bryah Resources Ltd (BYH), Auris Minerals Ltd (AUR), Gage Roads Brewing Co Ltd (GRB), Stavely Minerals Ltd (SVY), Orbital Corporation Ltd (OEC), 4DS Memory Ltd (4DS), Kin Mining NL (KIN), Pharmaust Limited (PAA), Botanix Pharmaceuticals Ltd (BOT), Dimerix Ltd (DXB), Metro Mining Ltd (MMI), Paringa Resources Ltd (PNL), Independence Group NL (IGO), MZI Resources Ltd (MZI), Transerv Energy Ltd (TSV), Emmerson Resources Ltd (ERM), Antipa Minerals Ltd (AZY), Echo Resources Ltd (EAR), Sovereign Metals Ltd (SVM)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
