09/03/2017 Argonaut Morning Note
Stocks hovered around the flat line ahead of key signals on monetary policy. Stock moves have been muted in recent days after climbing to record highs last week. Many investors are focused on upcoming meetings of the European Central Bank on Thursday and the Federal Reserve on March 14-15, when the Fed is widely expected to nudge borrowing costs higher. Ultra-loose monetary policy has underpinned years of stock market gains, but stocks have been relatively resilient to recent signals that the Fed may be moving faster than previously expected. "The Fed is hiking for the right reasons: growth is accelerating and inflation is approaching the central bank's target," said Valentijn Van Nieuwenhuijzen, head of multi-asset at NN Investment Partners. The ADP National Employment Report on Wednesday pointed to continued strength in the labor market ahead of Friday's monthly jobs report -- the last major piece of economic data the Fed will consider before making a call on interest rates next week. The jobs report showed 298,000 jobs were added in February, beating consensus estimates of around 189,000. Most investors believe the figure would have to come in dramatically below expectations to knock the Fed off course.
08/03/2017 Argonaut Morning Note
U.S. stocks ticked lower intraday as major indexes have been stuck in a holding pattern over the past few sessions. The Dow Jones Industrial Average slipped 19 points, or less than 0.1%, to 20,935 intraday. The S&P 500 edged down 0.1% while the Nasdaq Composite fell less than 0.1%. Continuing the downtrend was the U.S. gold price which also fell 0.8% to 1,215 US$/oz. The Federal Reserve is slated to meet March 14-15 and is widely expected to raise short-term borrowing costs. Fed-fund futures tracked by CME Group suggest an 84% chance of a rate rise next week. The Labor Department will release U.S. employment figures for the month of February on Friday, the last major piece of economic data the Fed will consider ahead of its meeting.
07/03/2017 Argonaut Morning Note
Stocks fell Monday, with financial shares leading a retreat from last week's highs. The Dow Jones Industrial Average has shed nearly 150 points since Wednesday, when investors' optimism about the U.S. economy powered the blue-chip index past 21000 for the first time. Financials were the worst-performing sector in the S&P 500, losing 0.7%. Bank stocks have been among the biggest winners in the post-election rally, which has been bolstered by President Donald Trump's promises to enact pro-business policies. Compounding the fall in the Dow Jones Industrial Average overnight was the U.S. gold price which also shed 0.7% to finish at 1,225 US$/oz. The S&P 500 has notched six consecutive weeks of gains. U.S. government bonds slipped as investors anticipated a rate increase, which Fed officials have signalled in recent days. The yield on the benchmark 10-year Treasury note rose to 2.494%, according to Tradeweb, from 2.492% Friday. Energy companies were among the few gainers Monday, rising 0.1% in the S&P 500 despite a slip in the price of oil.
06/03/2017 Argonaut Morning Note
The S&P 500 notched its sixth consecutive week of gains on growing optimism about the U.S. economy. Friday's muted moves capped an eventful week for markets. The Dow Jones Industrial Average soared above 21,000 for the first time Wednesday, and government bonds yields jumped in recent days as investors bet that the Fed was gearing up to raise rates. The Dow industrials rose about 3 points, or less than 0.1%, to 21,006 on Friday. The S&P 500 added about 0.1% and the Nasdaq Composite gained 0.2%. Investors' confidence in the U.S. economic outlook started building late Tuesday following President Donald Trump's speech to Congress and continued into Wednesday when data on the Fed's preferred inflation gauge showed firming price pressures. On Friday, Federal Reserve Chairwoman Janet Yellen signalled the central bank was likely to raise short-term rates at its March meeting, echoing a week of similar statements from Fed decision makers suggesting they were leaning toward lifting rates. Federal-funds futures, put the chances of an interest-rate increase this month at 80%, up from 78% Thursday and 27% at the end of last week, according to CME Group.
03/03/2017 Argonaut Morning Note
U.S. stocks fell intraday following their biggest daily advance this year, while expectations for higher interest rates boosted the dollar and government bond yields. The Dow Jones Industrial Average fell 64 points, or 0.3%, to 21051 intraday after reaching the 21,000 mark for the first time Wednesday. The S&P 500 declined 0.4%, the Nasdaq Composite slid 0.5% and the U.S. gold price overnight fell 1.2% at 1,234 US$/oz. Some traders welcomed the slight pullback after a string of records over the past two weeks. Stocks have drawn support this week from signs that the Federal Reserve is increasingly optimistic about the U.S. economy, and hopes that President Donald Trump will deliver on pro-growth policies. Investors have dumped government bonds while sending major U.S. stock indexes to records, plowing into shares viewed as most likely to benefit from a rising rate environment.