Morning Notes

04/05/2017 Argonaut Morning Note

U.S. stocks were little changed after the Federal Reserve held interest rates steady Wednesday. Some analysts said the Fed's statement showed officials looking past recent signs of slow economic growth and holding course toward raising rates again in June. "This is showing the Fed is dismissing the weak data -- it hasn't altered any of their plans," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. Materials shares in the S&P 500 fell 1.1%, weighed down by a sharp decline in copper prices that came as growing inventories coincided with fears about slowing demand from China. The U.S. gold price was a big decliner overnight dropping 1.5% to 1,237.70 US$/oz.

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03/05/2017 Argonaut Morning Note

U.S. stock indexes wavered intraday as investors assessed a mixed batch of corporate earnings. The Dow Jones Industrial Average added 8 points, or less than 0.1%, to 20922 intraday. The S&P 500 and the Nasdaq Composite both fell 0.1%. Major stock indexes have mostly climbed over the past two weeks, supported by reports pointing to corporate strength. With more than two-thirds of S&P 500 companies having reported results, firms are on track to post their best results since the third quarter of 2011, according to FactSet. Still, some investors caution that stocks in the U.S. look expensive relative to their historical averages, making them vulnerable to a pullback.

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02/05/2017 Argonaut Morning Note

A climb in technology shares helped push U.S. stocks higher Monday ahead of another busy week of corporate earnings. Technology stocks in the S&P 500 rose 0.9%, adding to a roughly 16% yearly gain. The U.S. gold price declined 0.9% for the day finishing at 1,256.10 US$/oz. The gains in technology heavyweights come as investors are analysing signs of lethargic domestic growth. U.S. factory activity decelerated in April, the Institute for Supply Management said Monday, while Americans' spending was flat in March for the second consecutive month, according to the Commerce Department. Friday's gross domestic product figures, a general measure of national output, showed the slowest pace of expansion in three years. While U.S. earnings have pleased investors, there have been "pockets of weakness" in some hard data, said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. Investors found some relief Sunday night as U.S. lawmakers averted a government shutdown. Federal Reserve officials, meanwhile, are likely to keep interest rates steady at their policy meeting this week and drill down into details about when and how to reduce their large holdings of mortgage and Treasury securities. The Federal Reserve's preferred measure of inflation, the personal-consumption expenditures price index, is expected later in the global day, and was expected to show little change in consumer costs in March.

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01/05/2017 Argonaut Morning Note

U.S. stocks ended the month higher, boosted by strong corporate earnings. The S&P 500 now sits about half a percentage point from all-time highs. With nearly 60% of the companies in the S&P 500 having reported, first-quarter earnings are on track to rise 12.5% from the year prior, according to FactSet. That's above the first-quarter earnings growth of 9.1% that analysts estimated as of March 31. On Friday, shares of Chevron and Exxon Mobil climbed after the companies posted encouraging results. The S&P 500 ended the week up 1.5%, putting its April gains at 0.9%. The index slipped 4.57 points, or 0.2%, to 2384.20 Friday. The Dow Jones Industrial Average edged down 40.82 points, or 0.2%, to 20940.51 Friday. Friday's declines followed data showing the U.S. economy stumbled in the first quarter. The U.S. gold price bucked the trend Friday, rising 0.3% to 1,267.70 US$/oz. Gross domestic product rose 0.7% at a seasonally adjusted annual rate, the Commerce Department said, falling short of the 1% growth expected by economists surveyed by The Wall Street Journal. There were other positive signals in the data. U.S. wages and benefits rose at the fastest pace since 2007 during the first quarter, signalling a tightening labour market. The Fed's preferred inflation gauge also rose at a rate of 2.4% in the first quarter, its biggest jump since spring 2011.

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27/04/2017 Argonaut Morning Note

U.S. stocks retreated after the White House briefing on its tax plan revealed few new details other than what was previously leaked to the press. Stocks initially edged higher on the White House's proposal for what it says will be big tax cuts, sending the S&P 500 up 0.4% from 0.3%. But by the end of the press conference the gains faded and the index was up 0.2%. The U.S. gold price bucked the trend rising 0.4% to 1,269 US$/oz. Financial stocks in the S&P 500 initially climbed to 0.9% in the early moments of the briefing, up from 0.6% previously, but in recent trading those gains had disappeared and the sector was up 0.4%. Expectations for lower taxes under the new administration have helped U.S. stocks climb since November. Improving corporate earnings have also supported shares.

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