Market Update & Important Indicators:
U.S. stocks rose intraday, a day ahead of the Federal Reserve's policy decision, though social media stocks continued to struggle. The Dow Jones Industrial Average climbed 116 points, or 0.5%, to 24727. The S&P 500 and the technology-heavy Nasdaq Composite each rose 0.1%, after the indexes on Monday logged their biggest daily losses since Feb. 8 as tech stocks led a broad downturn. The S&P 500's tech sector fell 0.2% as political leaders in the U.S. and Europe called for inquiries into whether Facebook failed to stop improper access and handling of user data and it was reported that the Federal Trade Commission was probing the company regarding the issue. Shares of Facebook were down 5.2%, after sliding 6.8% Monday and wiping out about $36 billion in market value. The US gold price fell overnight by 0.44% to 1310.80 US$/oz.
European stocks ended higher, aided by a pullback for the euro following a weak German business sentiment reading. As well, a drop in the pound after a slowdown in British inflation helped lift U.K. blue-chip stocks. The Stoxx Europe 600 index rose 0.5% to close at 375.57 after losing as much as 0.2% intraday. On Monday, the index slumped 1.1%. The export-heavy DAX 30 in Germany rose 0.7% to 12,307.33, and the U.K.'s FTSE 100 index gained 0.3% at 7,061.27. France's CAC 40 index ended 0.6% higher at 5,252.43. Stocks across the region seesawed during the early part of the session, but returned to positive territory as the euro fell below the $1.23.
Asia-Pacific stock markets pared early losses as investors took a more measured view of the overnight slump in tech shares sparked by concerns about whether Facebook did enough to stop improper access and handling of user data. Japan's Nikkei Stock Average shed 0.5% after losing as much as 1.2% earlier in the day, while Taiwan's Taiex fell 0.3%. Other markets, including Hong Kong's, clawed back to largely flat levels, while South Korea's Kospi and a number of Chinese benchmarks pushed up into positive territory as buying opportunities emerged. The Fed meeting, which could see policy makers predicting four instead of three rate increases this year, seemed to weigh most heavily on equities in the Philippines and Indonesia. The currencies of both countries could be buffeted if a faster pace of rate raising emerges. Stocks in the Philippines were down 2.6%. The tech sector turmoil set the scene for the day.
Although Asian equities improved as trading progressed, it wasn't enough for Australia's benchmark to notch a third-straight gain. The S&P/ASX 200 fell 0.4% to 5936.4, finishing near its best levels. The energy sector pulled back 0.9% after Monday's jump and health care declined 0.7%. But faring worst was materials, shedding 1.4% as both BHP Billiton and Rio Tinto lost nearly 2% amid broad weakness in commodities prices to start the week. Conversely, financials barely finished higher after recent declines, giving the broader market some support.
The London Metal Exchange’s 3-month copper contract traded lower overnight, falling 1.39% to close at $6,724.5/t. All the other base metals also finished lower overnight. Aluminium prices shed 0.6% to 2,053/t, whilst nickel prices lost 0.2% to finish at 13,408/t. Lead prices lost ground, falling 0.4% to 2,352/t, whilst tin prices dropped 0.5% to finish at 20,738/t. Zinc was the biggest loser overnight, falling more than 1.9% to 3,203/t.
Recent Contacts & Presentations:
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), Myanmar Metals Ltd (MYL), Primary Gold Ltd (PGO), Sino Gas & Energy Holdings Ltd (SEH), Australis Oil & Gas Ltd (ATS), Explaurum Ltd (EXU), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU)
Please read Argonaut's Important Disclaimers & disclosures
Log in to the client area below to download the full Morning Note PDF