Morning Notes

22/03/2017 Argonaut Morning Note

U.S. stocks, the dollar and government-bond yields pulled back intraday, as major indexes headed toward one of their steepest declines of the year. The Dow Jones Industrial Average fell 238 points, or 1.1%, to 20,668, for its worst day since October. The S&P 500 fell 1.2% and the Nasdaq Composite was down 1.6%. On the contrary, the U.S. gold price rose once again jumping 0.8% at 1,244.2 $US/oz. Bets that President Donald Trump would prioritize business-friendly policies led investors to pile into stocks and the U.S. dollar following the election while selling government bonds. But lately, some investors and analysts have expressed concerns that popular trades are getting overbought, making them vulnerable to a sharp pullback. Many also say the prospect that House Republicans will be unable to gather the votes they need this week to dismantle the Affordable Care Act is adding to doubts that Mr. Trump will be able to push through tax cuts. That could put further pressure on stocks that have been trading near records and at historically high valuations. "People are nervous that if the health-care bill doesn't pass - and right now it doesn't look like it will - what it means for other policies," said Ian Winer, head of equities trading at Wedbush Securities.

read more...

21/03/2017 Argonaut Morning Note

Energy stocks fell Monday, dragging U.S. stocks lower. Shares of energy companies in the S&P 500 slipped 0.7% as oil prices extended losses today, trading near a four-month low. Stock moves were muted Monday as investors analysed developments from a meeting of the Group of 20 industrialized and developing nations over the weekend.. Many investors have been concerned in recent months that changes to U.S. trade policy under the new administration could hamper growth and hurt major U.S. trading partners. Still, stock markets globally showed limited reactions to the developments on Monday. Political uncertainty has been breeding a "wait-and-see approach" in equity markets, said Yana Barton, a portfolio manager at Eaton Vance. "The geopolitical backdrop is going to be driving a lot of the market for the rest of the year." The U.S. administration's plans for trade and broader policy agenda have been a major source of focus for investors this year. Mr. Trump's first major priority – replacing the Affordable Care Act with a new health system -- is on a bumpy path, while progress on a major tax bill also has dragged. Many expect the new administration to unveil policies that will ultimately boost corporate profits, keeping stock markets calm. On a positive note, the U.S. gold price continued its movement upwards increasing 0.4% to 1,233.9 US$/oz.

read more...

20/03/2017 Argonaut Morning Note

Investors poured money into dividend-paying stocks Friday, pushing major indexes to weekly gains. Utilities stocks in the S&P 500 rose 0.6% on Friday, and were the best performers in the index, whilst the real-estate sector climbed 0.2%, respectively. This week marked the 16th-consecutive week of inflows into exchange-traded funds that invest primarily in companies that dole out dividends, according to EPFR Global data through Wednesday. During that time, $6.9 billion have flowed into these funds. The inflows come even as the Federal Reserve has raised interest rates twice and is on pace to raise rates an additional two times in 2017. Leading up to the central bank meeting, many Fed officials spoke about how the case for raising rates had strengthened due to improving economic data. Their tone sparked worries among some investors that the central bank may be more aggressive and raise rates four times in 2017. The Dow Jones Industrial Average slipped about 20 points, or 0.1%, to 20914 on Friday, while the S&P 500 fell 0.1% and the Nasdaq Composite added a fraction of a point, or less than 0.1%. The U.S. gold price also finished the week strongly rising 0.2% at 1,228.8 US$/oz.

read more...

17/03/2017 Argonaut Morning Note

Stocks retreated intraday, weighed down by declines in shares of health-care and energy companies. The pullback left all but two of the S&P 500's 11 sectors in negative territory for the day. Some investors said it wasn't surprising to see a pause with stocks trading near all-time highs and at higher-than-average valuations. "The markets have priced in a lot of very good news-better economic growth, a big fiscal package, deregulation and lower taxes," said Michael Arone, chief investment strategist at State Street Global Advisors. The Dow Jones Industrial Average lost 40 points, or 0.2%, to 20910. The S&P 500 edged down 0.3%, and the Nasdaq Composite fell 0.1%. The U.S. gold price bucked the trend rising 0.5% at 1,225.80 US$/oz. Shares of health-care companies were the worst performers in the S&P 500. Earlier, the House Republican health plan, the main element in the effort by Republicans to replace most of the Affordable Care Act, advanced in Congress by a narrow vote.

read more...

16/03/2017 Argonaut Morning Note

U.S. stocks extended gains after the Federal Reserve decided to raise interest rates. Stock gains were broad, with all but one of the S&P 500 sectors up after Fed officials indicated they still expect to raise short-term interest rates three times this year. With investors already anticipating Wednesday's rise, several said they were analysing the central bank's plans for future rate increases, its assessment of the economy and any hints about its balance sheet plans. Stock investors had been calm in the lead-up to the meeting, even as ultralow interest rates have underpinned stock markets in recent years. Many have viewed rising rates as a sign of economic strength, amid fresh hopes for tax cuts and increased government spending under the Trump administration. Remarks by central bank officials in the weeks leading up to the Fed meeting largely centred on how the case for raising rates had become more compelling in light of economic strength. That had sparked concern among some investors who worried the Fed may be more aggressive and raise rates four times in 2017. Gold prices rose to a one-week high after the Federal Reserve raised short-term interest rates and kept the outlook for additional rate increases this year unchanged. The U.S. gold price finished up 1.8% at 1,219.70 US$/oz.

read more...