Market Update & Important Indicators:
U.S. stocks, the dollar and government-bond yields pulled back intraday, as major indexes headed toward one of their steepest declines of the year. The Dow Jones Industrial Average fell 238 points, or 1.1%, to 20,668, for its worst day since October. The S&P 500 fell 1.2% and the Nasdaq Composite was down 1.6%. On the contrary, the U.S. gold price rose once again jumping 0.8% at 1,244.2 $US/oz. Bets that President Donald Trump would prioritize business-friendly policies led investors to pile into stocks and the U.S. dollar following the election while selling government bonds. But lately, some investors and analysts have expressed concerns that popular trades are getting overbought, making them vulnerable to a sharp pullback. Many also say the prospect that House Republicans will be unable to gather the votes they need this week to dismantle the Affordable Care Act is adding to doubts that Mr. Trump will be able to push through tax cuts. That could put further pressure on stocks that have been trading near records and at historically high valuations. "People are nervous that if the health-care bill doesn't pass – and right now it doesn't look like it will – what it means for other policies," said Ian Winer, head of equities trading at Wedbush Securities.
European stocks finished with losses, with French equities surrendering gains that came after respondents in a poll viewed centre-right politician Emmanuel Macron as the winner of the first presidential debate ahead of this spring's elections. France's CAC 40 fell 0.2% to end at 5,002.43. That still was better than the Stoxx Europe 600's drop of 0.5% to 375.67. The French stock benchmark had gained in morning action, but then a broad selloff took hold, with the major European and U.S. equity gauges all down solidly as Europe's trading session came to an end.
Global stocks advanced, pushing markets in Asia to their highest levels since 2015. Stock indexes in Korea, Taiwan and Hong Kong hit their highest levels since 2015, bolstered by a strengthening global economy and an improving earnings picture. Hong Kong's Hang Seng Index rose 0.4% to its highest since July 2015, while the Shanghai Composite added 0.3%. South Korea's Kospi index gained 1% to its highest close since 2011 on hopes that improved sentiment would continue when a new government takes charge following the impeachment and removal of Park Geun-hye. In Japan, however, the yen's recent strength weighed on stocks, with the Nikkei Stock Average down 0.3% following a holiday Monday. Since stock trading there wrapped Friday, the yen has gained more than 1% against the dollar, while bond yields have fallen, hurting financial firms and exporters such as auto-parts makers.
Australian shares followed Wall Street by trading flat, as economists debated whether slack wage growth and subdued inflation will prompt the Reserve Bank of Australia to move on interest rates. The S&P/ASX 200 index closed down 0.1%, or 4.3 points, at 5774.6, with declines by major diversified miners offsetting gains in the health-care sector and among power companies.
The London Metal Exchange's three-month copper contract closed down 1.77% at $5,776/t. The other base metals finished mixed on Tuesday. Aluminium prices rose 0.2% at 1,914/t, lead prices rose 0.2% at 2,270/t, whilst tin prices finished the day flat at 20,495/t. Falling for the day, nickel prices shed 0.1% at 10,097/t whilst zinc prices dropped 1.2% at 2,809/t.
In this Issue:
MZI Resources (MZI) | Operations turning the corner | HOLD
Market Cap $50m | Current Price $0.24 | Target Price $0.43
After a challenging ramp-up, MZI Resources is on the cusp of achieving design parameters at its 100% owned Keysbrook Mineral Sands Project in Western Australia. The new bank of spirals installed in the Wet Concentrator Plant (WCP) have been commissioned successfully improving heavy mineral (HM) recoveries. In addition, the troublesome mining field unit (MFU) is being replaced this week. However, delays to meet full production rates have stretched the Company’s balance sheet with a number of short term debt facilities due in the current and coming months (detailed below). Argonaut downgrades MZI to a HOLD (from BUY) with a $0.43/sh target price.
Recent Contacts & Presentations:
Sovereign Metals Ltd (SVM), Kin Mining (KIN), Vital Metals Ltd (VML), Mincor Resources (MCR), Dacian Gold (DCN), Leaf Resources Ltd (LER), Alchemy Resources Ltd (ALY), MZI Resources Ltd (MZI), Seafarms Group Ltd (SFG), Marindi Metals Ltd (MZN), Rift Valley Resources Ltd (RVY), Botanix Pharmaceuticals Ltd (BOT), Thundelarra Ltd (THX), DTI Group Ltd (DTI) OpenDNA Limited (OPN), Metro Mining Ltd (MMI), Tox Free Solutions Ltd (TOX), St George Mining Ltd (SGQ), Venturex Resources Ltd (VXR), Creso Pharma Limited (CPH), Sino Gas & Energy Holdings Ltd (SEH), Orecorp Limited (ORR) Doray Minerals Limited (DRM), Capricorn Metals Ltd (CMM)
Please read Argonaut's Important Disclaimers & disclosures
