Market Update & Important Indicators
Global stocks bounced back Tuesday, as a relatively muted decline in Chinese shares allowed investors to focus on upbeat corporate earnings and the Federal Reserve's monetary-policy meeting. Tuesday's gains in the U.S. and Europe afforded traders a break from a global selloff that had dragged the Dow Jones Industrial Average to its lowest level in nearly six months. Investors are now looking ahead to Wednesday's statement from the Federal Reserve after a two-day meeting that began Tuesday, seeking clues on the timing of an interest-rate increase that some expect as early as September. U.S. home price growth continued, according to the S&P/Case-Shiller Home Price Index. The index covering the nation rose 4.4% in the 12 months ended in May, slightly higher than the 4.3% April increase.
A sharp slump in Chinese markets piled further pressure on global stocks Monday after patchy economic data and corporate earnings spurred declines last week. Earnings were again in focus in Europe on Monday. Swiss bank UBS AG declined despite second-quarter profit that exceeded forecasts. Airline Ryanair Holdings PLC also fell after it didn't raise its full-year profit guidance. Consumer products giant Reckitt Benckiser Group PLC climbed after reporting a rise in earnings.
China's shares fell for a third-straight day Tuesday, in a second wave of heavy selling this month, raising questions as to whether Beijing will roll out new rescue measures to prop up the stock market. Government measures to step up purchases of stocks, announced late Monday, appeared to reassure some investors shaken earlier by the steep losses the day before, when the Shanghai benchmark fell 8.5%. That marked its worst one-day percentage decline since 2007. The amount of outstanding margin loans, while sharply lower than during the peak of the rally, remains a concern. The level was at 1.4 trillion yuan ($225.48 billion) Monday, slightly down from 1.5 trillion last Friday, according to the latest data by Wind Information Co.
Copper prices rebounded along with other base metals on the London Metal Exchange Tuesday as global markets steadied. Crude oil was lower, with Brent down 1.0% to $52.93/bbl and WTI was up 1.2% at $47.98/bbl. Gold inched higher to $1,095/oz, with iron ore climbing 2.1% to $53.45/t. The AUD is buying US$0.734.
In This Issue
Renaissance (RNS) | SPEC BUY
Renaissance Minerals (RNS) released a Pre-Feasibility Study (PFS) on its Okvau project, located in Cambodia. Key project parameters and changes (v Scoping Study) are summarised in Table 1, Page 2. Given grades, concentration of ounces (in a single pit) and a modest stripping ratio in the early years, Okvau remains a promising, undeveloped gold project. Amid a depressed gold price environment, Argonaut recognises that further exploration success (e.g. delineating satellite deposits) will enhance project economics and deliver more compelling financial metrics. This is possible, but will demand time and exploration funding. Argonaut maintains a SPEC BUY recommendation.
Recent Contacts & Presentations
Resolute (RSG), Rift Valley (RVY), Pacifico (PMY), Kingsgate (KCN), Troy (TRY), Northern Star (NST), Sandfire (SFR), Regis (RRL), Saracen (SAR), Sino Gas & Energy (SEH), Dacian (DCN), Buru Energy (BRU), Carnarvon Petroleum (CVN), Otto Energy (OEL), Empire Oil & Gas (EGO), Pura Vida Energy NL (PVD), High Peak Royalties (HPR), Karoon Gas (KAR), Austex Oil (AOK), UIL Energy (UIL), Tlou Energy (TOU), FAR Limited (FAR), Cooper Energy (COE), Central Petroleum (CTP), Senex Energy (SXY)