Market Update & Important Indicators:
Shares of retailers fell Friday after Amazon.com said it would buy Whole Foods Market, potentially squeezing their competitors. Technology stocks also slipped, extending losses for a sector that has been under pressure lately. The tech-heavy Nasdaq Composite fell 0.2% Friday, putting its weekly loss at 0.9%, while the S&P 500 added less than 0.1%. Meanwhile, the Dow Jones Industrial Average rose 24 points, or 0.1%, to 21384. Tech remains the best-performing S&P 500 sector in the index in 2017, up 17% year-to-date. But some recent sessions have been rough for the group. Since June 8, declines in stocks including Apple and Google parent Alphabet have dragged the sector down nearly 4% as investors pulled back from one of the most profitable trades of the year so far. The sector notched its third consecutive session of declines Friday. The U.S. gold price was largely unchanged finishing at 1,253.40 US$/oz on Friday.
Stocks across Europe finished higher Friday, but shares of some supermarket chains were hit hard after Amazon.com unexpectedly said it's scooping up Whole Foods Market in a nearly $14 billion deal. The only sector ending lower was consumer services, as food and drug retailers collectively fell nearly 4%, according to FactSet data. But the Stoxx Europe 600 closed up 0.7% at 388.60 after two sessions of losses. The Stoxx Europe 600 still closed lower for the week, down by 0.5%, a second consecutive weekly fall. On Sunday, the final round of voting in France's parliamentary election will be held, and the upstart party led by newly elected French President Emmanuel Macron is expected to win a large amount of seats.
Markets in Asia largely brushed off a weak finish on Wall Street. Japanese stocks closed higher after the Bank of Japan kept its policy unchanged. Markets in Asia also benefited from a recent climb in the dollar, higher oil prices and news of a long-sought Greek bailout deal, analysts said. Japan's Nikkei Stock Average climbed 0.6% after the Bank of Japan said it would maintain its aggressive monetary stimulus as expected. Bank of Japan Governor Haruhiko Kuroda pushed back against calls for details on how the bank might unwind its easing policy. Gains Friday came as shares in Asia largely ignored another tech-induced selloff in the U.S. on Thursday. The Shanghai Composite Index was down 0.3%, meanwhile even as China's central bank boosted market liquidity by making the largest single-day cash injection into the financial system since mid-January.
A further modest advance by Australian shares Friday capped the strongest week for the local market since late March, buoyed in large part by a rebound by the banks that more than offset the drag of mining stocks. The S&P/ASX 200 finished up 10.8 points, or 0.2%, at 5774.0. That left the index 1.7% higher over a holiday-shortened week, taking back the bulk of last week's slump. The five banks have been under pressure for much of the last month as worries have built over lacklustre earnings, capital requirements and a surprise tax on the liabilities introduced in the federal budget.
The London Metal Exchange's three-month copper contract closed 0.04% higher on Friday at $5,663/t. The other base metals finished mostly higher. Lead prices rose 0.9% to 2,091/t, nickel prices rose 1.1% to 8,883/t, tin prices jumped 0.9% to 19,795/t whilst zinc prices rose 0.9% to 2,512/t. Aluminium prices bucked the trend falling 0.3% to 1,856/t.
In this Issue:
Tox Free Solutions (TOX) | FY17 guidance | BUY
Market Cap $452m | Current Price $2.33 | Valuation $2.50
TOX’s segment expectations are largely positive aside from the ongoing challenging conditions in the Pilbara. Revised guidance for underlying FY17 EBITDA of $82-83m is slightly below our prior forecast, but importantly, we believe TOX will emerge from the current financial year with a strong, diversified base off which to grow. We are not expecting large acquisitions in the near term and FY18 will provide cleaner, easier to analyse, numbers. Our $2.50 blended valuation and buy call are maintained
Recent Contacts & Presentations:
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), Dacian Gold (DCN), Egan Street Resources Ltd (EGA), Alice Queen Ltd (AQX), Paringa Resources Ltd (PNL), AWE Limited (AWE), Saracen Mineral Holdings Ltd (SAR), Red River Resources Ltd (RVR), Vital Metals Ltd (VML), Prairie Mining Ltd (PDZ), Hotcopper Holdings Ltd (HOT), Resolute Mining Ltd (RSG), Botanix Pharmaceuticals Ltd (BOT), Pantoro Ltd (PNR), Beadell Resources Ltd (BDR), Investigator Resources Ltd (IVR)
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