23/02/2017 Argonaut Morning Note
U.S. stocks bounced around the flat line Wednesday as a pullback in the price of oil weighed on shares of energy companies. Energy companies in the S&P 500 were the worst performers in the index Wednesday, falling 1.1%, as the price of U.S.-traded crude oil declined. On Tuesday, oil rose to its highest settlement since December. The S&P 500 and the Nasdaq Composite slipped 0.1% in recent trading, while the Dow Jones Industrial Average rose 0.1%. The U.S. gold price was up slightly overnight finishing at 1,237.30 US$/oz. The pause follows a strong day of gains on Tuesday when all three indexes closed at new records. Small daily moves, most of which are minor gains, have been a theme for the stock market in recent months. The S&P 500 has not posted a 1% or more decline in 90 trading days, the longest stretch since 2006, according to WSJ Market Data Group. Similarly, the index has failed to post a 1% or more gain since Dec. 7, the longest such stretch since 2014. Even without big moves, since Dec. 7 the S&P 500 has risen about 5.5%. Federal Reserve officials said they anticipated raising short-term interest rates "fairly soon" and some officials said it might be appropriate to move "potentially at an upcoming meeting," according to minutes from the Fed's latest meeting published Wednesday.
22/02/2017 Argonaut Morning Note
U.S. stocks intraday climbed toward fresh records, lifted by gains in shares of energy and consumer-staples companies. The Dow Jones Industrial Average had added 67 points, or 0.3%, to 20691, heading toward its eighth consecutive closing high. The S&P 600 had gained 0.4% and the Nasdaq Composite had risen 0.3%, after the three indexes closed at records Friday. Investors have been betting that potential tax cuts and fiscal stimulus will boost corporate profits and keep stocks moving higher, as interest rates rise from ultralow levels. Some analysts have warned that stocks have become pricey relative to their historical averages. The 12-month forward price-to-earnings ratio for the S&P 500 rose Friday to its highest level since 2004, according to FactSet. Shares of consumer-staples companies in the S&P 500 rose 0.7% intraday and were among the best performers in the broad index. The U.S. gold price finished slightly lower at 1,236.2 US$/oz.
21/02/2017 Argonaut Morning Note
U.S. markets closed were closed overnight for the President’s day public holiday. Global stocks continued their slow climb higher Monday, even as political jitters drove steep swings in the European government bond markets. In European stock markets, the basic resources sector led Monday's gains amid a recovery in copper and oil prices. The Stoxx Europe 600 added 0.2% in its ninth advance in 10 sessions after Asian shares ended a touch firmer, drawing encouragement from Friday's late advance on Wall Street. "If [President Donald] Trump can actually execute spending in infrastructure and lower tax rates in U.S., it'll have a profound knock-on effect in the world, and that is why I'm generally positive about stock markets," said Michelle McGrade, chief investment officer at TD Direct Investing in London. Recent gains in Europe have come despite escalating concerns over Greece's bailout and coming elections in France, Germany and the Netherlands, which have rattled the region's sovereign bond markets.
20/02/2017 Argonaut Morning Note
The Dow Jones Industrial Average turned slightly positive at the 4 p.m. close Friday, by fewer than five points, continuing its streak of record closes. The blue-chip index added 4 points to 20,624, marking its seventh straight close at a new high. The S&P 500 added 3.9 points, and the Nasdaq Composite added 24 points. For the week, the Dow industrials and S&P 500 recorded gains that exceeded 1%. Some investors said Friday's lacklustre performance marked a pause after signs of economic expansion, improving corporate profits and the potential for tax cuts and deregulation helped push stocks to multiple highs in recent sessions. Energy shares in the S&P 500 slipped as the price of U.S. crude oil edged down 0.5% to $53.47 a barrel. A record surplus of gasoline, brought on by a decline in U.S. consumption, is emerging as a threat to the yearlong rally in crude prices, some analysts said. Some investors said Friday that with stocks at records, questions remain about the prospects for policies such as increased government spending and corporate tax adjustments that have fuelled stocks' rally and prompted selling in government debt since the U.S. election.
17/02/2017 Argonaut Morning Note
The stock market rally stalled intraday, putting the S&P 500 on course to snap its longest winning streak since 2013. Investors sold shares of financial companies, which had been among the best performers earlier in the week, while pushing government bonds and their stock-market proxies higher. The day's moves put the S&P 500 on track for its first pullback since last Monday. Some investors and analysts said it wasn't unusual for stocks to pause after posting a series of records. Before Thursday, the S&P 500, Nasdaq Composite and Dow Jones Industrial Average had closed at new highs together for five consecutive sessions, buoyed by corporate earnings and fresh optimism around the U.S. economy. "The market might have just gotten a bit ahead of itself," said Mike Baele, managing director of the U.S. Bank Private Client Reserve in Portland, Ore. Still, continued growth in the economy and the possibility of tax cuts and fiscal stimulus from the administration should lead stocks higher yet, Mr. Baele said.