Morning Notes

31/05/2017 Argonaut Morning Note

Declines in shares of banks pulled the Dow Jones Industrial Average lower intraday. The blue-chip index fell 50 points, or 0.2%, to 21030.71. The S&P 500 slipped less than 0.1% and the Nasdaq Composite edged down less than 0.1%. Major stock indexes have climbed with few large swings through the first half of the year, bolstered by strength in corporate earnings and the U.S. economy. Many investors say they are now trying to gauge how long favourable economic data and relatively low market volatility can last. U.S. stocks look expensive relative to their historical averages, investors and analysts say, especially as many have trimmed their expectations for deregulation and cuts from the Trump administration. Falling for the day, the U.S. gold price shed 0.3% to finish at 1,262.80 US$/oz.

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30/05/2017 Argonaut Morning Note

U.S. equity markets were closed overnight for the Memorial Day public holiday. European and Asian stocks had a muted start to the week, with holidays slowing activity world-wide Monday, as investors shrugged off political concerns emerging after a meeting of world leaders over the weekend and another missile launch in North Korea. After the annual summit of the Group of Seven industrialized countries, German Chancellor Angela Merkel said Europe can no longer completely rely on other countries, underlining her frustration with U.S. President Donald Trump. At the G-7 summit in Italy over the weekend, Ms. Merkel and five other world leaders sought to convince Mr. Trump to keep the U.S. in the Paris climate agreement. Mr. Trump didn't commit one way or the other. Later in the day, European Central Bank President Mario Draghi warned that it is too early to start winding down the bank's large monetary stimulus, striking a cautious note in his last public comments before the ECB's June policy meeting. After Mr. Draghi's comments, the euro currency weakened slightly against the dollar.

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29/05/2017 Argonaut Morning Note

The S&P 500 snapped a two-week losing streak as the index climbed to another record Friday. Stocks were little changed overall in a quiet session Friday ahead of the long holiday weekend. It was the slowest trading day of the year, as measured by number of shares changing hands on major U.S. exchanges. The S&P 500 edged higher to its 20th record of the year and notched a weekly gain of 1.4%, its biggest since the end of April. The Nasdaq Composite also closed at a record. Stocks have risen on stronger-than-expected first-quarter earnings, continued signs of a steady economy and expectations that the Federal Reserve will only raise rates gradually. The Dow Jones Industrial Average edged down 2.67 points, or less than 0.1%, to 21080.28 on Friday. The S&P 500 added 0.75 points, or less than 0.1%, to 2415.82 and the Nasdaq Composite rose 4.94 points, or less than 0.1%, to 6210.19. The U.S. gold price rose strongly on Friday, jumping 0.9% to 1,266.70 US$/oz.

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26/05/2017 Argonaut Morning Note

Consumer-discretionary shares lifted U.S. stock indexes intraday while oil prices slid. The Dow Jones Industrial Average added 71 points, or 0.3%, to 21083. The S&P 500 rose 0.4% and the Nasdaq Composite climbed 0.6% - both heading toward fresh closing records. Strong first-quarter earnings and broadly upbeat U.S. economic data have pushed stocks higher this year despite waning expectations for tax cuts and fiscal stimulus from the Trump administration. Still, some investors say they remain wary of the stock run. The S&P 500 traded as of Wednesday at roughly 22 times its last 12 months of earnings, according to FactSet, above its 10-year average of 17 times trailing earnings. Consumer-discretionary stocks rose, among the biggest gainers in the S&P 500 for the day. Falling for the day, the U.S. gold price shed 0.3% to finish at 1,255.40 US$/oz.

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25/05/2017 Argonaut Morning Note

Gains in real estate and utilities shares pushed U.S. stocks slightly higher Wednesday as minutes from the Federal Reserve signalled interest rates could rise in June. Real-estate and utilities stocks in the S&P 500 rose 0.7%. Shares of basic materials producers in the S&P 500 rose 0.5%. Dow component DuPont gained 1.1%. U.S. stocks have climbed in recent sessions as corporate earnings growth helped outweigh concerns over the ability of the Trump administration to push through its policy agenda, including tax cuts. Many investors are now focusing on central bank policy ahead of pivotal meetings next month for the Federal Reserve and the European Central Bank. Wednesday's minutes from the Fed's meeting earlier this month showed officials expected that it would "soon be appropriate" to raise short-term rates again, a signal the central bank could act in June. The Fed's stimulus policies have helped buoy stocks and bond markets in recent years. But many investors view rate increases as a vote of confidence in the U.S. economy that shouldn't derail financial markets, particularly if the Fed continues to move at a gradual pace. The U.S. gold price rebounded overnight, rising 0.6% at 1,258.60 US$/oz.

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