Morning Notes

02/03/2017 Argonaut Morning Note

The Dow Jones Industrial Average surged above 21000 for the first time Wednesday, as investors embraced optimism from President Donald Trump and Federal Reserve officials. Stocks have soared since November, with the blue-chip index surpassing 19000, 20000, and now 21000, since Election Day. Enthusiasm for Mr. Trump's plans to cut taxes, loosen regulations and ramp up fiscal spending have bolstered shares alongside signs of improvement in the U.S. economy. The Dow rose 334 points, or 1.6%, to 21,147 on Wednesday. The last time it posted a gain of more than 300 points was the day before Mr. Trump's surprise win. If the gains hold through the closing bell, the Dow will tie its fastest thousand-point jump in history: It took 24 sessions from the first close above 10000 for the index to climb to 11000 in 1999. Investors scooped up shares broadly on Wednesday, sending nearly all 30 Dow components higher. Apple rose 2.2% and has been one of the biggest contributors to the Dow's point gain since the index first closed above 20000 on Jan. 25. The S&P 500 rose 1.5% Wednesday, and the Nasdaq Composite added 1.3%. The rally came after Mr. Trump struck an optimistic tone in a speech to Congress on Tuesday evening, although he offered few new details for his agenda. Investors were also focused on the likelihood of the Fed raising interest rates in March, following comments from a number of officials suggesting another quarter-point interest-rate increase could come at the central bank's next meeting.

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01/03/2017 Argonaut Morning Note

Investors sold off retail shares as major U.S. indexes slipped in intraday trading. The Dow Jones Industrial Average was off 37 points, or 0.2%, to 20800 after reaching a 12th consecutive record high Monday. The S&P 500 was off 0.3% and the Nasdaq Composite off 0.6%. Consumer discretionary stocks were among the biggest decliners in the S&P 500, falling 0.6%. Global defence shares rallied ahead of U.S. President Donald Trump's first formal address to the nation since Inauguration Day. In a speech to Congress after U.S. markets close, Mr. Trump is expected to outline his policy priorities, including a call for a $20 billion increase in current military spending. Investors were being cautious ahead of Mr. Trump's address, where he is expected to clarify some of his fiscal policy plans, some analysts said.

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28/02/2017 Argonaut Morning Note

Shares of utilities companies and other dividend stocks pulled back Monday, keeping gains in check for major U.S. indexes. The utilities sector of the S&P 500 shed 0.6%, while telecom and consumer-staples stocks also fell. Utilities led last week's gains, rallying alongside U.S. government bonds as investors pulled back on some popular post-election trades. "We're really trying to discern the magnitude of policy and timing," said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank. "We've had a lot of posturing from the new administration without getting the particulars." President Donald Trump is set to deliver a speech to Congress Tuesday, where he is expected to outline his policy priorities, including simplifying the tax code and dismantling the Affordable Care Act, White House officials said Sunday. The S&P 500 has risen more than 10% since the November election, while the Dow has risen over 13%, partly driven by hopes that Mr. Trump's policies will boost corporate earnings.

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27/02/2017 Argonaut Morning Note

Utility companies posted their best weekly performance since July as investors poured money into dividend-paying stocks. Major indexes spent most of Friday in the red before a buying spree in the last half hour of trading buoyed shares. The Dow Jones Industrial Average fell as much as 76 points before closing up 11 points, extending its streak of record highs to 11 consecutive days.

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24/02/2017 Argonaut Morning Note

Declines in biotechnology shares dragged down the Nasdaq Composite, pressuring an index that has soared so far this year. The Nasdaq fell 0.5% intraday but is up more than 8% in 2017, outperforming both the Dow Jones Industrial Average and the S&P 500, which are up more than 5%. The tech-heavy index has closed at a fresh high 19 times so far this year-its most records in a year since 1999, according to the WSJ Market Data Group. The Nasdaq Biotechnology Index shed 0.4% while technology shares also slipped, putting the Nasdaq Composite on course for a second straight day of declines. The S&P 500 rose less than 0.1% and the Dow industrials rose 0.2% intraday, on course to close at a fresh high. The U.S. gold price also rose overnight up 1.0% at 1,249.30 US$/oz. Stocks have climbed since Election Day, as corporate earnings have improved, data has shown growth in the U.S. economy and investors have bet the new U.S. administration will implement tax cuts and fiscal stimulus. Some investors remain cautious, however, noting stocks are getting expensive. Companies in the S&P 500 traded at about 22 times their past 12 months of earnings as of Wednesday, above their 10-year average of 15.8, according to FactSet.

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