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05 August 2019 06:50 AM
Overseas Market ReportCurrent
PreviousChangeDaily %
Monthly %
Dow Jones Industrial Average26,48526,583-98.00-0.37-1.62
S&P 5002,9322,954-22.00-0.73-1.95
FTSE 100 Index7,4077,585-178.00-2.34-1.93
DAX 3011,8720-381.00-3.11-5.54
CAC 40 Index5,3595,557-198.00-3.57-4.20
Nikkei 225 (Japan)21,08721,541-454.00-2.11-3.03
SSE Composite Index2,8682,909-41.00-1.41-4.76
S&P/TSX Composite Index16,27216,377-105.00-0.64-1.63
NZ 5010,82610,864-38.00-0.351.98
US Volatility (Vix)18
Overseas Market Report

US sharemarkets fell again on Friday as investors focussed on the US-China trade war. Tech stocks were hard hit with the Philadelphia Semiconductor index down 1.6%. Eight of 11 S&P 500 sectors fell. Shares in Exxon and Chevron fell slightly after earnings announcements. The Dow Jones lost 98 points or 0.4% with the S&P500 down 0.7%, while the Nasdaq fell by 107 points or 1.3%. Over the week the Dow fell by 2.6% with the S&P 500 index down by 3.1% and the Nasdaq lost 3.9%. 

Global oil prices rebounded on Friday after falling 7-8% on Thursday in response to the US tariff news. Supporting prices was data showing that the number of oil rigs in operation in the US fell by 6 to 770 in the latest week. Data also showed that China resumed purchases of US oil. The Brent crude price rose by US$1.39 or 2.3% to US$61.89 a barrel. And the US Nymex price rose by US$1.71 or 3.2% to US$55.66 a barrel. Over the week Brent fell by 2.5% and Nymex lost 1.0%.

Base metal prices fell by between 0.7-2.9% on the London Metal Exchange on Friday. Aluminium fell the least with copper down the most. Over the week lead fell by 5.4% and zinc lost 4.4% but nickel rose 2.7%.

The gold futures price rose by US$24.70 or 1.7% to US$1,445.60 an ounce. The spot gold price was trading near US$1,440 an ounce in late US trade. Over the week gold rose by US$26.30 or 1.9%. Iron ore fell by US$5.45 or 4.8% to US$108.45 a tonne. Over the week iron ore fell by US$10.30 or 8.7%.

PreviousChangeDaily %
Monthly %
Oil Brent61.3161.89-0.58-0.94-4.55
Oil - West Texas crude55.3355.66-0.33-0.59-3.79
Gold Spot $/OZ1,438.001,441.00-3.00-0.212.74
Silver Spot $/OZ16.2016.200.00-0.057.98
Iron Ore115.40117.00-1.60-1.38-0.80
Thermal Coal Newcastle69.2069.50-0.30-0.43-1.21
APAC Hard Coking Coal FOB158.00158.000.000.00-14.59
Aluminium ($US/t)1,7411,753-12.00-0.68-0.87
Copper Mar-18 ($US/lb)2.572.570.100.02-3.25
Lead ($US/t)1,9461,978-32.00-1.623.51
Nickel ($US/t)14,44814,578-130.00-0.8920.35
Zinc ($US/t)2,3412,397-56.00-2.34-7.73
Tin ($US/t)16,97117,320-349.00-2.02-3.92
Uranium ($US/lb)25.0025.000.00-0.203.47
Australian Market ReportCurrent
PreviousChangeDaily %
Monthly %
ASX All Ords6,8466,872-26.00-0.380.21
S&P/ASX 2006,7696,789-20.00-0.300.26
ASX 24 Futures6,708
Australian Market Report

Friday 2 August - close. US President Donald Trump has done it again, sending markets around the world into turmoil, tweeting threats to raise tariffs further on China - although Australia's share market emerged less scathed than others. The benchmark S&P/ASX200 index closed down 20.3 points, or 0.3 per cent, to 6,768.6 at 1615 AEST on Friday, while the broader All Ordinaries was down 25.8 points, or 0.38 per cent, to 6,846.1.

Ashanti Headlines

Rare Earths Stocks Jump as Trump Threat Reboots Tit-For-Tat Bets

China’s rare-earth companies rallied after U.S President Donald Trump triggered a fresh escalation in trade tensions, rekindling bets that the critical materials could get drawn into a tit-for-tat between the world’s top two economies. Trump’s plan to impose 10% tariffs on a further $300 billion of goods from China reignited speculation that China could weaponize its dominance over rare earths supply to hit back at the U.S on trade. Makers of rare-earth magnets including Chengdu Galaxy Magnets Co. and JL Mag Rare Earth Co. surged by their daily limit, as traders bet on China pushing for supply curbs that could push up prices. “Basically since Trump has escalated the trade tensions, this might make China try to figure out what to do in order to retaliate,” Helen Lau, analyst at Argonaut Securities Asia, said by phone from Hong Kong. Rare-earths companies have swung this year amid trade frictions, with stocks surging in May after an earlier rupture in trade talks. Rare-earths stock moves on Friday: 

* China Northern Rare Earth Group High-Tech Co. +7% in Shanghai * China Minmetals Rare Earth Co. +8.9% in Shenzhen * China Rare Earth Holdings +16% in Hong Kong China has a stranglehold over the global supply of rare earths, which are vital materials in components used in everything from cars to consumers electronics and military hardware. The U.S. has only one existing mine, while China produces more than two thirds of the world’s raw material, and an even bigger proportion of so-called permanent rare earths magnets, a key product. China had readied a plan to restrict supplies if needed, people familiar with the matter said in May, when state media delivered several hints of such a move. On the U.S. side, Trump last month ordered the Pentagon to spur production of rare-earth magnets, saying the products were “essential to national defense.”

By Bloomberg News

Our preferred exposures to playing Rare Earth's on the ASX remain GGG, PM8 and LYC. Please call your adviser or the desk on +61 8 6319 7807 should you wish to discuss further.

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