Morning Notes

27/07/2018 Argonaut Morning Note

Tumbling shares of Facebook pulled the S&P 500 lower intraday after disappointing earnings results rocked investor confidence in one of Wall Street's most popular trades. The social-media giant fell 19% in recent trading, putting it on pace for its steepest decline since its shares started trading six years earlier. The selloff started after Facebook said late Wednesday that revenue grew slower than expected in the second quarter and warned that it expected growth to decline over the rest of the year. Investors say the lackluster results have renewed concerns that the massive growth in revenue and profits among some of tech's stalwarts may not be sustainable-and that could put another hurdle in front of a stock market already grappling with trade tensions and concerns of a possible policy misstep by the Federal Reserve. The US gold price lost 0.7% to record 1224.40 US$/oz.

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26/07/2018 Argonaut Morning Note

U.S. stocks jumped to session highs in the last half hour of trading after a European Union official said President Donald Trump had secured concessions to avoid a trade war. As part of the negotiations, the EU is set to agree on lowering industrial tariffs and work on more LNG exports from the U.S. The Dow Jones Industrial Average rose 0.7%, while the S&P 500 was up 0.9% and the Nasdaq Composite added 0.9%. Investors are balancing uncertainty over trade conflicts with what is shaping up to be a strong corporate-earnings season. About 28% of companies in the S&P 500 have reported results for the latest quarter, and earnings are up 20% so far for companies in the index that have reported. Coca-Cola and United Parcel Service both posted stronger-than-expected revenue growth, pushing their shares up 1.9% and 6%, respectively. But Boeing shares slumped 2.3% as its results weren't as strong as some analysts and investors expected. The aerospace giant, though, raised its revenue outlook for 2018 despite the trade tensions the company has said will affect its input costs. AT&T, meanwhile, reported lower revenue in its latest quarter as its satellite-TV business suffered major losses. Its shares dropped 4.5%. The technology sector rose 1% ahead of Facebook's earnings report after the closing bell. Investors will be looking for signs the questions over the social media giant's handling of user data have affected its business. The US gold price gained 0.6% to record 1231.40 US$/oz.

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25/07/2018 Argonaut Morning Note

U.S. stocks rose intraday as investors cheered what is shaping up to be a strong corporate-earnings season. The Dow Jones Industrial Average rose or 0.8%. The S&P 500 rose 0.5%, and the tech-heavy Nasdaq Composite was roughly unchanged, giving up its earlier gains. With the earnings-reporting season about a fifth of the way through, the vast majority of S&P 500 companies have posted stronger-than-expected earnings and revenue, according to FactSet. Earnings from U.S. companies have been "unparalleled" elsewhere, said Michael Scanlon, portfolio manager at Manulife Asset Management. Shares of Google parent Alphabet jumped 3.1% after the search giant reported revenue and adjusted earnings that beat analysts' estimates. The US Gold price remained unchanged at 1224 US$/Oz.

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24/07/2018 Argonaut Morning Note

U.S. stocks rose intraday Monday, driven by shares of financial companies as investors dumped government bonds, pushing Treasury yields higher. Major indexes erased earlier losses, with the Dow Jones falling 0.1% to 25044. The S&P 500 added 0.2%, led higher by shares of financial companies. The Nasdaq Composite climbed 0.2%. Treasury prices remained under pressure Monday amid concerns that international appetite for U.S. debt could wane, after White House comments on monetary policy sent the dollar and government bond prices sliding last week. That gave ammunition to the financial sector in the S&P 500, which was the biggest gainer, advancing 1.4%. Shares of banks like Wells Fargo, JPMorgan Chase and Bank of America led the way. Bank stocks tend to benefit when Treasury yields rise because higher interest rates lift banks' net interest margins, a key measure of their lending profitability. Stock investors have been cautiously optimistic in recent days amid strong earnings results and economic data. Though the U.S. continues to spar with other countries on trade, the back-and-forth hasn't weighed broadly on domestic stock indexes. The S&P 500 is up about 5% this year. Corporate earnings so far have come in above expectations, with 87% of companies posting stronger-than-expected profits and 77% beating revenue expectations, according to FactSet. The US gold price fell 0.6% to 1224.0 US$/Oz

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23/07/2018 Argonaut Morning Note

U.S. stocks inched lower Friday, ending the week little changed, as White House comments on monetary policy sent the dollar and government bond prices sliding. Major indexes struggled to break higher throughout the week as investors parsed dozens of earnings reports and rebukes from President Donald Trump on Federal Reserve policy. The Dow Jones Industrial Average fell less than 0.1% on Friday, rising 0.2% for the week. The S&P 500 fell 0.1% on the day and added less than 0.1% for the week, while the Nasdaq Composite edged down less than 0.1% on the day and advanced less than 0.1% for the week. Even as uncertainty around trade and monetary policy has weighed on the markets this year, analysts and investors say upbeat earnings and economic data are helping them remain cautiously optimistic. S&P 500 firms are on track to report their second fastest pace of earnings growth since 2010 for the second quarter, according to FactSet, pointing to sustained momentum in the U.S. even as growth elsewhere around the world has faltered. The US gold price gained 0.8% to record 1231.5 US$/oz.

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