Market Update & Important Indicators:
The S&P 500 rose for the third straight session Wednesday, lifted by gains in industrial firms and a continued rise in commodity prices. Some investors have said worries about strikes in Syria have faded into the background in recent sessions, putting the spotlight on robust corporate earnings growth. Despite those sources of market stress and a turbulent start to the year, some investors expect strong first-quarter results to boost stocks. The S&P 500 was on track for its ninth day of gains in the past 12 sessions, and the Dow industrials on Tuesday climbed back into positive territory for 2018. The S&P 500 added 0.2% Wednesday. The Dow Jones Industrial Average was down 39 points, or 0.2%, at 24748, and the Nasdaq Composite edged up 0.2%. With 10% of the S&P 500 companies having reported quarterly results as of Wednesday morning, roughly 80% of them have beaten analyst earnings and sales expectations. Gains in airline stocks propelled the index's industrials sector to a 1.3% gain. U.S. crude oil surged to around a fresh three-year high and lifted shares of energy firms. The US gold price rose overnight by 0.1% to finish at 1,349.20 US$/oz.
European stock markets rose for a second straight session on Wednesday, as geopolitical tensions and concerns over a potential U.S.-China trade war continued to fade and focus instead turned to the corporate earnings season. U.K. stocks outperformed the wider European market after British inflation unexpectedly fell and sent the pound lower. The Stoxx Europe 600 index gained 0.3% to close at 381.86, adding to a 0.8% rally from Tuesday when the benchmark ended at a seven-week high. The U.K.'s FTSE 100 index climbed 1.3% to 7,317.34, rallying after the pound skidded following the disappointing inflation data. Sterling fell to an intraday low of $1.4173 from $1.4290 late Tuesday in New York. Germany's DAX 30 index ended marginally higher at 12,590.83 on Wednesday, while France's CAC 40 index rose 0.5% to 5,380.17. Among Stoxx Europe 600 companies, 70% of companies have surpassed expectations. U.K. stocks got an extra boost from data showing inflation in Britain fell to 2.5% in March, down from 2.7% in February and below forecasts of a 2.7% reading.
Asian stocks rose across the board on Wednesday. In China, the People's Bank of China cut banks' reserve requirements, giving a boost to financial stocks. For the first time in two years, the People's Bank of China announced a reduction in the portion of deposits commercial banks are required to hold in reserve in what economists call a pre-emptive action aimed at bolstering growth. Elsewhere in Asia, Hong Kong's Hang Seng Index ended up 0.7%, while Japan's Nikkei Stock Average finished up 1.4%.
Australia's stock benchmark notches its first 4-day winning streak since late February as the market was helped today by resource and consumer stocks. Rising along with the rest of the region, the S&P/ASX 200 rose 0.3% to 5861.4, finishing near session highs. Fresh oil gains during Asian trading pushed that sector up further while Rio Tinto added 1.1% following the miner's 1Q production report.
The London Metal Exchange’s 3-month copper contract rose 2.1% to 7,022/t. The other base metals were higher overnight. Tin price rose 0.3% overnight to 21,660/t, while the lead price rose 1.1% to 2,374/t. Larger gains were seen in the zinc and aluminium prices, rising to 3,249/t and 2,541/t, respectively. Nickel prices jump by 7.4% to 15,224/t in the biggest one-day move since 2008, on fears of Russian sanction fallout.
In this issue:
Regis Resources (RRL) | Splish Splash but still making cash | HOLD
Market Cap $2400m| Current Price $4.80|Target Price: $4.69
Regis Resources (RRL) released March quarterly production of 85koz (-7%, Q-o-Q) which was in line with Argonaut's expectations whereby wet conditions resulted in disruptions to mining at the satellite pits. Group costs increased to $905/oz (vs $855/oz +7% Q-o-Q) on lower milled grades and higher strip ratios. Operating cashflow was $71m (vs $84m, +30% Q-o-Q) with cash and bullion decreased to $168m (-2% Q-o-Q). FY18 YTD production of 269koz at AISC $873/oz remains in line with refined production guidance of 355-360koz. We move to a HOLD recommendation (prior BUY) following recent share price strength and following revisions to our model. We increase our target price to $4.69ps ($4.62 prior).
Recent Contacts & Presentations:
Global Energy Ventures (GEV), Advanced braking technology (ABV), Fortescue Metals Group (FMG), Helix Resources (HLX), Pantoro Limited (PNR), Alt Resources Ltd (ARS), Coziron Resources Ltd (CZR), ABM Resources Ltd (ABU), Vital Metals Ltd (VML), Todd River Resources Ltd (TRT), Pacific Energy Ltd (PEA), Carnarvon Petroleum Ltd (CVN), Australian Mines Ltd (AUZ), Australian Finance Group (AFG), Paladin Energy Ltd (PDN), Cooper Energy Ltd (COE), Medibio Ltd (MEB), Botanix Pharmaceuticals Ltd (BOT), Salt Lake Potash Ltd (SO4), Golden Mile Resources Ltd (G88), NTM Gold Ltd (NTM), Ausmex Mining Group Ltd (AMG), Matrix C&E Ltd (MCE), Austal Ltd (ASB), Decmil Group Ltd (DCG), Ventnor Resources Ltd, Ausdrill Ltd (ASL), Alice Queen Ltd (AQX), PNX Metals Ltd (PNX), Alliance Resources Ltd (AGS)