Morning Notes

09/02/2017 Argonaut Morning Note

Losses in financial shares weighed on the Dow Jones Industrial Average Wednesday, a pause in a post-election surge that had helped lift major U.S. indexes to records. Stock moves have been muted this month. The S&P 500 has yet to drop more than 1% in a trading day since the November election, the longest stretch of the sort since 2006, according to Bespoke Investment Group. Investors say they have been weighing recent improvements in earnings and economic data against elevated valuations and an uncertain political landscape on both sides of the Atlantic. That has left major stocks stalled in recent weeks as many await policy moves before extending bets on tax cuts and regulatory rollbacks that have helped send major indexes to fresh highs after the election. Financial shares were among the biggest decliners in the S&P 500 Wednesday, falling 1%. Corporate earnings gains remained a factor keeping stocks level despite volatility elsewhere in financial markets, some analysts said.

read more...

08/02/2017 Argonaut Morning Note

The Dow Jones Industrial Average was inching higher in intraday trading, as gains in shares of technology companies offset declines in energy companies. Recent earnings results have largely been supportive for U.S. stocks. Fourth-quarter earnings for S&P 500 companies are expected to grow 4.7% from the year-earlier period, according to FactSet, more than the 3.2% growth rate analysts had expected at the end of 2016. Many investors say they are cautiously optimistic for U.S. stocks' path forward, especially if companies can sustain earnings growth through the rest of the year and the White House is able to push through initiatives like fiscal stimulus and tax cuts. Energy shares were lagging, as U.S. crude oil prices pulled back 2% to $51.94 a barrel. Shares of energy companies in the S&P 500 lost 1.6% and were the worst performers in the broad index around midday.

read more...

07/02/2017 Argonaut Morning Note

U.S. stocks slipped Monday, with corporate earnings driving some of the biggest moves. Energy was the worst-performing sector in the S&P 500. U.S. crude oil was down following a report that U.S. rig counts rose last week. Market participants said investors appeared to be awaiting further policy moves from Washington, in the wake of a post-election rally driven by expectations of tax cuts and deregulation. Analysts in January lowered earnings estimates for companies in the S&P 500 for the first quarter of this year by 1.5%, compared with an average decline of 2.5% over the past year, according to FactSet. "We're coming out of the earnings recession, but margins are still shrinking if you take out banks," said James Swanson, a strategist and fund manager at MFS Investment Management.

read more...

06/02/2017 Argonaut Morning Note

The potential for regulatory rollbacks injected new enthusiasm for financial stocks, sending major indexes higher Friday. The Dow Jones Industrial Average rose 187 points, or 0.9%, to 20071, its biggest one-day gain in nearly two months. The S&P 500 climbed 0.7%, while the Nasdaq Composite gained 0.5%. Both indexes ended the week in positive territory, while the Dow fell slightly. After rallying into the end of 2016, the blue-chip index's gains have stalled in recent weeks as hopes for increased government spending, corporate tax cuts and loosened regulation waned. On Friday President Donald Trump took action on rolling back financial regulation, boosting bank stocks. He signed executive actions to scale back the 2010 Dodd-Frank financial-overhaul law and to roll back a retirement-savings rule that would hold brokers and financial advisers who work with tax-advantaged retirement savings to a fiduciary standard. A pickup in hiring in January also fuelled stocks' gains on Friday. Jobs outside of farms increased 227,000 in January, the best gain since September, the Labor Department reported Friday. The unemployment rate ticked up to 4.8% from 4.7% a month earlier, and workers' wages rose only modestly.

read more...

03/02/2017 Argonaut Morning Note

U.S. stocks edged lower, as declines in financial shares offset gains in shares of consumer staples companies. U.S. indexes have pulled back in recent sessions as investors have tried to weigh President Donald Trump's protectionist policies against the possibility of tax cuts and fiscal stimulus. The Dow industrials, S&P 500 and Nasdaq Composite are on course for weekly losses. Still, many investors see reason to be optimistic about U.S. stocks' path over the next year, citing improvement in corporate earnings and a strengthening economy. "We've pretty much decided to ride it through, because it's not all about Washington," said David Donabedian, chief investment officer at Atlantic Trust Private Wealth Management. "We've had a good run, and now we're seeing a major shift in sentiment where we have doubt creeping in," said Barry James, chief investment officer at James Investment Research.

read more...