Market Update & Important Indicators:
Stocks and commodities extended declines Wednesday as investors dialled back on riskier assets. Investors have enjoyed a broad run-up in markets around the world this year that has sent major stock indexes to records and prices of oil and raw materials to multi-year highs. Declines are natural after such a strong rally and the peak of earnings season, some investors and analysts said. The Dow Jones Industrial Average fell 0.6% to 23271. The S&P 500 fell 0.6% after posting its lowest close this month on Tuesday, and the Nasdaq Composite declined 0.4%. The Dow industrials and S&P 500 experienced their fourth day of declines in the past five sessions. The U.S. gold price also lost some ground overnight, shedding 0.1% to 1,278.5 US$/oz.
European stocks closed lower on Wednesday, as strength in the Euro and a drop in commodity shares drew the regional benchmark near a two-month low. Equities in Europe fell alongside a slide for U.S. stocks, pulled lower in part by jitters over the prospects of success for the U.S. tax overhaul in Washington. The Stoxx Europe 600 stumbled 0.5% to close at 381.96, suffering its lowest close since Sept. 18, FactSet data showed. The loss on Wednesday marked a seventh straight day of declines for the index, its longest losing run since late October/early November last year. The DAX 30 index flopped down 0.4% to 12,976.37, while France's CAC 40 shed 0.3% to 5,301.25. The U.K.'s FTSE 100 gave up 0.6% to 7,372.61. Prices for oil and most metals were under pressure, which in turn hurt shares of energy producers and mining companies.
In Asian trading Wednesday, Japan's Nikkei Stock Average fell 1.6%, logging a sixth-straight loss in its longest losing streak since May 2016. The yen also firmed against the dollar and was last up 0.7%, adding pressure to the index. Data showed Japan's economy grew at an annualized pace of 1.4% in the July-September quarter. The country has now gone nearly two years without a contraction, the longest since 2001. Chinese stocks were down Wednesday after Tuesday's release of muted October economic data. The Shenzhen Composite fell 1% and the largely small-cap ChiNext slid 1.5%. Wednesday's weakness in Chinese stocks also came amid fears of escalating financial regulations, which have already seen jitters in the bond market in recent days.
Australian stocks finished at session lows as retreating commodities prices continued to weigh on that market, as well as others throughout the region Wednesday. The S&P/ASX 200 fell 0.6% to 5934.2, building on yesterday's 2-month-worst 0.8% drop. The index is now as its lowest closing level in 2 weeks, coming just a week after hitting 10-year highs in part on strength in commodities prices. The energy subindex fell 1.7%, building on yesterday's 2.1% drop, the most since July.
The London Metal Exchange’s 3-month copper contract traded slightly higher Wednesday, rising 0.2% to finish at $6,773/t. The other base metals finished mixed overnight. Aluminium prices rose 1.2% to 2,087/t, whilst zinc prices also improved, jumping 0.3% to 3,193/t. Falling for the day, tin prices shed 0.8% at 19,417/t, whilst nickel prices continued its downward trend, dropping 0.7% at 11,634/t. Lead prices declined the most overnight, falling 1.4% to 2,422/t.
Recent Contacts & Presentations:
Botanix Pharmaceuticals Ltd (BOT), Xanadu Mines Ltd (XAM), Orthocell Ltd (OCC), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU), Minotaur Exploration Ltd (MEP), Panoramic Resources Ltd (PAN), Sino Gas & Energy Holdings Ltd (SEH), Great Boulder Resources Ltd (GBR), Metallum Ltd (MNE), Gold Road Resources Ltd (GOR), Apollo Consolidated Ltd (AOP), De Grey Mining Ltd (DEG), Triton Minerals Ltd (TON), Evolution Mining Ltd (EVN), Silver Mines Ltd (SVL), NTM Gold Ltd (NTM), Gascoyne Resources Ltd (GCY), Southern Cross Electrical Ltd (SXE), MOD Resources Ltd (MOD), Meteoric Resources NL (MEI)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF
