Market Update & Important Indicators
The Dow Jones Industrial Average briefly dropped more than 400 points intraday, a second straight day of double-digit declines, as worries over rising bond yields and a slide in the health-care shares pushed investors to the sidelines. The blue-chip index declined 385 points, or 1.5%, to 26054, on track for its worst day since May, after earlier falling as much as 404 points. The S&P 500 dropped 1.1% and is set for its first daily decline of more than 1% since August. A decline would mark the first time this year that the indexes have fallen for two consecutive days. Before this week's slide, the S&P 500 was off to its best start to a year since 1987, buoyed by strong corporate earnings, improving economic growth and the new U.S. tax law. The S&P 500 has notched 14 record closes so far this month, the most records in a single month since June 1955, compared with 11 records for the Dow. The U.S. gold price also traded lower overnight, falling 0.1% to finish at 1,338.10 US$/oz.
European stocks fell, tracking losses across global markets, as investors grew increasingly concerned about a sharp rise in U.S. bond yields and its impact on the cost of borrowing. Heavily-weighted oil companies led the decliners, as crude-oil prices came under pressure. The Stoxx Europe 600 index fell 0.9% to close at 396.12, posting its biggest one-day percentage loss since Nov. 9, according to FactSet data. Germany's DAX 30 index dropped 1% to 13,197.71, while France's CAC 40 index dropped 0.9% to 5,473.78. The U.K.'s FTSE 100 index fell 1.1% to 7,587.98.
Investors continued to sell stocks and commodities in Asian trading following declines in the U.S., as markets turned cautious after recent big gains. Stock benchmarks in Japan and Taiwan fell more than 1% to log their biggest declines since broad selloff in the region on Dec. 6. For the Nikkei, it logged its first five-day losing streak since November as the dollar declined further versus the yen. Taiwan, where many Apple suppliers are based, weakened after the tech giant's shares fell 2.1% Monday amid fresh speculation about potential iPhone production cuts. Indexes in Hong Kong and South Korea were also down about 1%.
A broad selling across the region pushed Australia's stock benchmark into negative territory for the month with one trading day left. The S&P/ASX 200 fell 0.9% to 6022.8, led lower by commodity names amid a further drop in Chinese iron-ore futures and oil futures. BHP Billiton declined 1.3% and Woodside Petroleum shed 2.2%. The index ended 2017 with three-straight monthly gains.
The London Metal Exchange’s 3-month copper contract traded lower overnight, finishing 0.5% weaker at $7,050/t. The other base metals all finished lower. Aluminium prices fell 0.8% to 2,202/t, while lead prices slid 0.5% to close at 2,589/t. Zinc prices pulled back 1.5% to 3,546/t after making a 10 year high yesterday, whilst Tin prices pared 1.4% to 21,788/t. Nickel prices were weakest, slipping 3.3% to close at 13,317/t.
In this issue
Botanix (BOT) | Successful Acne Patient Study | SPEC BUY
Market Cap $87m | Current Price $0.16 | Valuation $0.20
BOT has successfully completed a Phase 1b acne patient study achieving all the Company’s BTX 1503 program goals. This provides significant value uplift by de-risking both the BTX 1503 acne program as well as BOT’s wider portfolio of cannabidiol-based dermatological products (for the treatment of atopic dermatitis and psoriasis). BOT’s ability to maintain a strict development timeline along with targeting large markets, that have seen little innovation over the last 20 years, underpin our positive view. We maintain our speculative buy call on a revised $0.20 per share valuation (previously $0.095 per share).
Threat Protect (TPS) | Been busy buying lines | SPEC BUY
Market Cap $19m | Current Price $0.17 | Valuation $0.26
Revenue picked up in the December Q and M&A activity saw TPS’s direct monitored lines grow by over 50% to ~8,200 connections. TPS is evaluating additional funding options to maintain the acquisition strategy that should result in operational and financial benefits as utilisation increases. We maintain a Speculative Buy call on a valuation of $0.26 (lower than the prior $0.28 largely due to the increased net debt position).
Recent Contacts & Presentations
Proteomics International Laboratories Ltd (PIQ), Ramelius Resources Ltd (RMS), MOD Resources Ltd (MOD), Greenland Minerals & Energy Ltd (GGG), Walkabout Resources Ltd (WKT), Marindi Metals Ltd (MZN), Volt Power Group Ltd (VPR), PharmAust Ltd (PAA), Alice Queen Ltd (AQX), Jervois Mining Ltd (JRV), St George Mining Ltd (SGQ), Overland Resources Ltd (OVR), Metro Mining Ltd (MMI), Botanix Pharmaceuticals Ltd (BOT), Xanadu Mines Ltd (XAM), Orthocell Ltd (OCC), Whitebark Energy Ltd (WBE), Atrum Coal Ltd (ATU), Minotaur Exploration Ltd (MEP), Panoramic Resources Ltd (PAN), Sino Gas & Energy Holdings Ltd (SEH), Great Boulder Resources Ltd (GBR), Metallum Ltd (MNE)
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