Market Update & Important Indicators
Stocks sank Tuesday after a mixed bag of U.S. economic data underscored investor unease with the recent pace of economic growth. Shares of small companies, typically seen as more sensitive to the U.S. economy, posted sharp losses. The pullback follows a raft of economic data Tuesday–including an early report showing demand for big-ticket manufactured goods in the U.S. in April fell 0.5% from a month earlier. Economists had expected a more modest decline of 0.1%, though business investment showed signs of picking up. Other data showed home prices continued to climb in March, but less than expected, while new home sales and consumer confidence rose. The week ahead will bring an updated reading on first-quarter gross domestic product expected to show a 1% decline.
European stocks fell Tuesday, souring as investors returned from a break to assess financial and political developments in Greece and Spain. The Stoxx Europe 600 lost 0.7% to 403.61, with no sectors ending higher. Energy shares and the basic materials group on Tuesday logged the biggest losses, hurting as dollar-denominated metal and oil prices were crunched by a climb in the dollar. The drop in commodity stocks weighed on the U.K.'s FTSE 100, which fell 1.2% to 6,948.99. On the country indexes, Germany's DAX 30 fell 1.6% to 11,625.13, Spain's IBEX 35 lost 0.7% to 11,240.30 and France's CAC 40 fell 0.7% 5,083.54.
Hong Kong stocks–led by the shares of mutual-fund providers–played catch-up with their rallying mainland counterparts, while in Japan the yen fell to its weakest point in nearly eight years. Chinese companies trading in Hong Kong jumped 2.6%, leading the Hang Seng Index up 0.9% at 28249.86. In combination with cross-border programs already in place, the new link–which will open in July–will increase the total capacity for flows from China to Hong Kong to $180 billion, according to the firm. That would represent more than 6% of Hong Kong's free-float market capitalization. Elsewhere in Asia, shares were mixed. The Nikkei Stock Average was up for an eight straight day, rising 0.1% to 20437.48 to fresh 15-year highs.
LME metals closed lower on Tuesday, as the dollar remained firm against a range of currencies and concerns increased over the Chinese economy. Brent crude was down marginally to US$63.88/bbl, while gold was lower at US$1,187/oz. The AUD is buying US$0.774.
In This Issue
Argonaut’s Stock Coverage & Recommendations
Recent Contacts & Presentations
Gold Road (GOR), Saracen (SAR), Kibaran (KNL), Sino Gas & Energy (SEH), Rewardle (RXH), Alexium (AJX), Ausdrill (ASL), Tox Free (TOX), OBJ Limited (OBJ), Cash Converters (CCV), Decmil (DCG), TFS Corporation (TFC), Mobile Embrace (MBE), Dacian (DCN), Fertoz (FTZ), Atrum (ATU), Buru Energy (BRU), Carnarvon Energy (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), MZI Resources (MZI), High Peak Royalties (HPR), Spookfish (SFI)