Market Update & Important Indicators:
The Dow Jones Industrial Average pulled back from a record intraday, as a drop by Home Depot took more than 45 points off the blue-chip index. The Dow industrials recently fell 29 points, or 0.1%, to 21612, whilst the S&P 500 finished flat and Nasdaq Composite rose 0.1%. All three indexes, along with the Russell 2000, rose to record closing highs on Wednesday. Earlier, stocks briefly dropped sharply after a Bloomberg report that the investigation into ties between President Donald Trump's campaign and Russia in last year's election are extending to Trump's businesses. The report cited a person familiar with the probe. The U.S. gold price gained slightly overnight, rising 0.2% to 1,244.00 US$/oz.
European stocks reversed course and closed lower as investors weighed the possibility the European Central Bank is moving closer to reducing monetary stimulus for the Eurozone economy that has helped pushed equities to record highs. German, French, Spanish and Italian shares flipped down at the same time the euro leapt to its highest in more than a year against the U.S. dollar. Those moves were made on the prospect that the ECB will soon say it's time to start winding down its massive program of bond purchases. The Stoxx Europe 600 finished with a 0.4% loss at 384.07, retreating from an intraday rise of 0.5%. Meanwhile, the euro rallied to a high of $1.1657, the first time the euro could buy more than $1.16 since May 2016. The ECB held interest rates steady, as expected.
In Asia, the Nikkei led stock markets higher after the Bank of Japan raised its economic growth forecasts at its policy meeting but once again pushed back its inflation target. The BOJ now expects inflation to reach around 2% in the year ending March 2020, a year later than its previous projection, raising investors' expectations for an extended period of stimulus. The Nikkei Stock Average was up 0.6%, also helped by robust export data in June, and a weaker yen. Elsewhere in the region, Hong Kong's Hang Seng Index was up 0.3%, whilst the Shanghai Composite Index rose 0.3% and Korea's Kospi added 0.5%.
Australia's big banks again drove the local stock market higher, aided by gains in energy companies as production reports continue to roll out and after crude prices hit a six-week high. The four major banks rallied for a second straight day, following a report by the prudential regulator that set out a target on capital that marked only a moderate increase from current levels and gave the lenders until 2020 to adopt the changes. Worries the capital benchmark might prove more onerous had weighed on bank shares in recent weeks, and the regulator's report sparked a shift in sentiment as that weight was removed and after several investment banks lifted their target prices for the banks' shares. Rising a second day, the S&P/ASX 200 rose 29.4 points, or 0.5%, to finish at 5761.5. The Big Four banks, which are among the largest stocks in the index, collectively added about 25 points to offset pockets of weakness among materials, consumer and property stocks.
The London Metal Exchange's three-month copper contract lost 0.13% overnight to close at $5,959/t. All other base metals finished lower. Aluminium prices shed 0.1% to 1,892/t, nickel prices dropped 1.6% at 9,445/t, zinc prices fell 0.7% to 2,718/t, tin prices shed 0.1% at 20,225/t, whilst lead prices fell 0.1% to 2,185/t.
In this Issue:
Evolution Mining | A standout year | Buy
Market Cap $3,600m | Current Price $2.16
Evolution Mining (EVN) delivered June Q production of 218koz (Mar Q 202koz +8%) slightly above Argonaut’s estimate 215koz. All-in sustaining costs (AISC) of A$825/oz were 2% lower qoq (A$840/oz in Mar Q) as a result of improved costs at Cowal, Edna May and Cracow. Standout performance came from the Ernest Henry (EH) asset with June Q production of 24koz (+7% qoq) at an all-in sustaining cost of negative -$432/oz (-$447/oz in March Q). EVN repaid a further $125m in debt ($40m in March Q), with no further debt obligations required until October 2017 and remaining net debt of $399m. June Q net mine cashflow of $137.1m (+24% vs March Q 110.7m) was higher largely as a result of the strong performance of Ernest Henry which represented ~35% of the group net cashflow generation for the Q. Argonaut maintains a BUY Recommendation with a A$2.49ps target price (prior $2.57).
Recent Contacts & Presentations:
Pharmaust Limited (PAA), 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)