Market Update & Important Indicators:
U.S. stocks were little changed after the Dow Jones Industrial Average and S&P 500 ended last week at records. Monday's pause came at the start of a busy week of earnings. Consumer-discretionary shares posted some of the biggest moves in an otherwise listless market, as investors snapped up beaten-down shares in brick-and-mortar retailers. The Dow industrials fell 8 points, or less than 0.1%, to 21630. The S&P 500 added less than 0.1%, its consumer-discretionary sector leading gains with a 0.4% rise. The Nasdaq Composite rose less than 0.1% and hovered near its closing record during the session. The index posted its biggest one-week gain in more than six months on Friday as the tech sector rebounded from a spate of declines that began June 9. The S&P 500 technology sector has risen more than 4% so far this month after declining 2.7% in June. The U.S. gold price once again rose overnight, jumping 0.4% to finish at 1,233.70 US$/oz.
Stocks in Europe broadly logged a steady finish Monday, with mining shares bumped higher after China's quarterly growth figures topped expectations. The Stoxx Europe 600 closed up by less than 2 points at 386.86, paring its gain as most major European stocks tilted lower. Last week, the Stoxx 600 rose 1.8%, the largest advance since early May. Among key benchmarks Monday, France's CAC 40 index slipped 0.1% to 5,230.17, and Germany's DAX 30 index shed 0.4% at 12,587.16.
Chinese equity markets were volatile, with Shanghai's benchmark index down 1.4% in its biggest daily drop this year and the Shenzhen Composite down 3.6% even after the world's second-biggest economy beat expectations with 6.9% second-quarter growth. China's top officials signalled over the weekend that the country's campaign against runaway debt and speculation remains a priority, dragging down small-cap shares. Adding to Monday's early gloom was a series of profit warnings from small-cap Chinese companies, as several listed stocks u-turned on their financial-health projections. Equity markets elsewhere in the region were broadly higher at the start of the week, following gains in U.S. indexes. South Korea's Kospi index was up 0.4, Hong Kong's Hang Seng Index recovered from early losses to edge up 0.3%, whilst Japanese markets were closed for a public holiday.
Australian stocks pulled back Monday as a drop in telecommunications and financial companies offset gains by resources shares. After rising in the previous two sessions, the S&P/ASX 200 closed 9.6 points, or 0.2%, lower at 5755.5. Though it was a soft start to the week, the market finished off early lows after data on China's economy beat forecasts. The major banks also faltered, tracking moves on Wall Street on Friday after a series of earnings results from U.S. lenders. China, the world's biggest consumer of a raft of commodities including iron ore, maintained the pace of economic growth in the second quarter. Crude-oil futures were also higher in Asian trading, adding to gains recorded each day last week, helping buoy energy stocks.
The London Metal Exchange's three-month copper contract gained 1.18% overnight to close at $5,996/t. The other base metals finished mixed. Nickel prices added 0.3% at 9,555/t, tin prices rose 0.5% to 19,990/t, whilst zinc prices gained 0.8% at 2,808/t. Falling for the day, aluminium prices shed 0.6% to 1,896/t, whilst lead prices dropped 1.1% to 2,270/t.
In this Issue:
Northern Star Resources (NST) | A strong finish and more in the post
Market Cap $2700m | Current Price $4.50
Northern Star (NST) delivered an outstanding June Q, producing 154koz at an all-in sustaining cost (AISC) of $938/oz (+22% production, -5% on costs vs the Mar Q). Group production was boosted by the stellar performance at the Jundee operations of 85koz at AISC of $754/oz, 66% higher than the March Q. Underlying free cashflow from operations was $60.7m (vs $59.8m in March Q) ending with net cash and investments of $447m. Group production came in at 514.7koz @ AISC $1,013/oz reaching the top end of its 485- 515koz FY17 guidance and the lower end of costs. FY18 guidance forecasts 525-575koz @ AISC of $1,000-$1,050/oz (vs Argonaut 566koz). Looking ahead we await NST’s corporate update in early August which Argonaut believes will paint the picture of growth beyond 600-700kozpa in coming years. NST remains our key pick in the gold space and we reiterate our BUY recommendation and we upgrade our target price to $5.25 (prior $4.89).
Recent Contacts & Presentations:
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), Calidus Resources Ltd (CAI), Great Boulder Resources Ltd (GBR), Finders Resources Ltd (FND), Bionomics Ltd (BNO), Threat Protect Australia Ltd (TPS), Ramelius Resources Ltd (RMS), Zenith Energy Ltd (ZEN), Blackham Resources Ltd (BLK), Top End Minerals Ltd (TND), Northern Star Resources Ltd (NST), Xanadu Mines Ltd (XAM)