Market Update & Important Indicators
U.S. stocks climbed toward new closing highs Monday, building on the previous week's gains, as investors extended bets on lawmakers pushing through a major tax overhaul. Stock prices recently have been moving in line with the likelihood of a Republican tax plan being signed into law. Deals with wavering lawmakers late last week left Republicans ready to pass their bill as soon as Tuesday and send it to President Donald Trump's desk for his signature. A corporate tax cut could help boost profits and keep the long U.S. stock rally going, investors and analysts say, even as some have expressed concerns about valuations looking stretched. The Dow Jones Industrial Average was up 0.6% in the last half-hour of trading, heading toward its 70th record close of the year. The S&P 500 rose 0.6%, and the Nasdaq Composite added 0.8%. Shares of companies thought to be among the biggest beneficiaries of a corporate tax cut jumped Monday, lifting major indexes. Bank stocks climbed, with shares of Goldman Sachs Group, Bank of America and Citigroup each adding more than 1%. The U.S. gold price traded slightly higher overnight, gaining 0.5% to close at 1,261.90 US$/oz.
European stocks rose for the first time in four sessions, with banks leading the charge on hopes the highly anticipated tax reform in the U.S. will get passed this week and provide a boon for the financial sector. The Stoxx Europe 600 index rallied 1.2% to close at 392.66, marking its highest close since Nov. 8, according to FactSet data. Among regional benchmarks, Germany's DAX 30 index jumped 1.6%, while France's CAC 40 index added 1.3%. The U.K.'s FTSE 100 index climbed 0.6%.
Financials helped drive stocks higher in Japan and Hong Kong, but the big story may well have been India. Trading in India's stock market was volatile after some reports hinted that Prime Minister Narendra Modi's party may have fallen short in two state elections. The Sensex stock benchmark in India initially fell as much as 2.6%, before recovering to end up 0.4% after local media reported Mr. Modi's party had in fact won. Meanwhile, Japan's Nikkei Stock Average broke its four-day losing streak to close 1.6% higher–just shy of a fresh 26-year peak. Hong Kong's Hang Seng added 0.7%.
Australian stocks finished near session highs Monday, helped by strength in commodities names and buyback news from ANZ. The S&P/ASX 200 climbed 0.7% to 6038.9, a 5 1/2-week closing high. ANZ's 2.1% rally led the major banks and Aconex soared 44% on a buyout deal. Miners were also strong, but Aurizon slumped 5.9% as Queensland state's competition regulator issued a draft report on maximum allowable revenue.
The London Metal Exchange’s 3-month copper contract traded higher overnight, gaining 0.3% to finish at $6,905/t. The other base metals also finished mostly higher. Aluminium prices added 0.3% to close at 2,057/t, whilst Lead prices gained 1.5% to close at 2,585/t. Tin prices rose 1.0% to close at 19,370/t, whilst Nickel prices jumped 2.2% to 11,778/t. Tin prices bucked the trend, slipping 0.5% to close at 19,370/t.
In this issue
Orbital (OEC) | Firm focus on UAV’s | SPEC BUY
Market Cap $35m | Current Price $0.45 | Valuation $0.75
With the establishment of a leased (as opposed to owned) facility in the US and the sale of REMSAFE, OEC has been able to firm the focus on the UAV division while maintaining balance sheet strength. We caution that we still expect very weak earnings in 1H18 before a recovery in the 2H, but believe forecasting risk is more than factored into the current share price. We maintain our speculative buy call on an unchanged valuation.
Sino Gas and Energy (SEH) | Price increases and a strong finish to 2017 | BUY
Market Cap $275m | Current Price $0.14 | Target Price $0.24
Sino Gas and Energy (SEH) announced it has agreed a gas price increase with its Sanjiaobei (SJB) Production Sharing Contract (PSC) Partner, PetroChina CBM (PCCBM). The current Gas Sales Agreement (GSA) has also been extended by one year to December 2018. For the Winter period from January to March 2018, prices will be US$7.55/Mscf for the first 4MMscf/d and US$7.81/Mscf for the second 4MMscf/d delivered. For the off-peak Summer period from April to October 2018, prices will moderate to US$7.00/Mscf. The Winter prices reflect a 17% increase on the 2017 average of US$6.55/Mscf (US$6.40/Mscf for the September Q).
Recent Contacts & Presentations
Greenland Energy Ltd (GGG), Walkabout Resources Ltd (WKT), Marindi Metals Ltd (MZN), Volt Power Group Ltd (VPR), PharmAust Ltd (PAA), Alice Queen Ltd (AQX), Jervois Mining Ltd (JRV), St George Mining Ltd (SGQ), Overland Resources Ltd (OVR), Metro Mining Ltd (MMI), 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)