Morning Notes

15/03/2017 Argonaut Morning Note

U.S. stocks fell with government bond yields intraday as a selloff in the oil market deepened. The Dow Jones Industrial Average slipped 52 points, or 0.3%, to 20829. The S&P 500 lost 0.4% and the Nasdaq Composite fell 0.4%. Losses in shares of energy companies pressured major indexes as U.S.-traded crude oil, which tumbled below $50 a barrel last week, extended recent declines. The S&P 500 energy sector dropped 1.2%. U.S.-traded crude oil fell 1.2% to $47.80 a barrel. The U.S. gold price also continued to decline falling 0.4% at 1,198.60US$/oz. Investors worrying that a ramp-up in U.S. production could offset efforts to reduce a supply glut have sent oil prices sliding for six consecutive sessions through Monday. Recent declines in oil prices have already started to weigh on pockets of high-yield bonds and drag down oil and gas companies shares, according to Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

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14/03/2017 Argonaut Morning Note

U.S. stocks slipped Monday as investors prepared for a busy week set to include a meeting of the Federal Reserve and key political tests in Europe. The Fed is widely expected to raise borrowing costs Wednesday for the first time this year, with Fed-fund futures tracked by CME Group pointing to a roughly 95% chance of a rate rise. Analysts said they would be focused on signals from the Fed on how aggressively it would move to hike rates later this year. "It's the calm before the storm," said David Lafferty, chief market strategist at Natixis Global Asset Management. "The market is still coalesced around three tightening’s this year, but there's certainly room for four," he said. Healthcare was the worst-performing sector of the S&P 500, slipping 0.4% as investors awaited the release of a Congressional Budget Office analysis of the Republican bill to replace Obamacare. The U.S. gold price was also slightly lower for the day finishing down 0.1% at 1,203.70US$/oz.

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13/03/2017 Argonaut Morning Note

The S&P 500 rose Friday after the February jobs report showed robust hiring, but the index notched its first weekly decline since January. The Dow Jones Industrial Average rose 45 points Friday, or 0.2%, to 20903. The S&P 500 added 0.3%, and the Nasdaq Composite gained 0.4%. All three posted weekly declines. The U.S. gold price also rose on Friday, jumping 0.3% to 1,205US$/oz. U.S. government bond yields and the dollar climbed during the week as investors anticipated an interest-rate increase at the Federal Reserve's next meeting. Friday's jobs report bolstered those expectations. The Labor Department's report showed non-farm payrolls rose by a seasonally adjusted 235,000 in February from the prior month, more than the 197,000 that economists surveyed by The Wall Street Journal had expected. The unemployment rate also ticked down to 4.7%. The monthly jobs report was the last major piece of economic data the Fed will consider before it makes its decision on interest rates at its policy meeting on March 14-15. Federal-funds futures, used by investors to bet on the Fed's policy outlook, showed the odds of a rate increase in March at 93%, according to CME Group.

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10/03/2017 Argonaut Morning Note

U.S. stocks slipped intraday as falling oil prices pressured shares of energy companies. The Dow Jones Industrial Average fell 20 points, or 0.1%, to 20,836 intraday. The S&P 500 and the Nasdaq Composite both lost less than 0.1%. U.S. crude oil was down 2.7% at $48.92 a barrel intraday, building on a drop of more than 5% in the previous session - its largest one-day decline in more than a year. The U.S. gold price also finished lower overnight, dropping 0.5% to 1,200US$/oz. U.S. oil inventories are now at their highest levels since weekly stockpile data started being recorded in 1982, raising doubts over whether cuts from OPEC will be enough to reduce a global glut of supply. Energy stocks in the S&P 500 fell the most, and were recently down 0.5%. On Thursday, bank stocks were some of the best performers, with the index up 0.3% as bond yields climbed. Thursday also marks the eight-year anniversary of major stock indexes' financial-crisis lows. On March 9, 2009, the Dow industrials closed at 6547.05. The blue-chip index has since more than tripled from that level.

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09/03/2017 Argonaut Morning Note

Stocks hovered around the flat line ahead of key signals on monetary policy. Stock moves have been muted in recent days after climbing to record highs last week. Many investors are focused on upcoming meetings of the European Central Bank on Thursday and the Federal Reserve on March 14-15, when the Fed is widely expected to nudge borrowing costs higher. Ultra-loose monetary policy has underpinned years of stock market gains, but stocks have been relatively resilient to recent signals that the Fed may be moving faster than previously expected. "The Fed is hiking for the right reasons: growth is accelerating and inflation is approaching the central bank's target," said Valentijn Van Nieuwenhuijzen, head of multi-asset at NN Investment Partners. The ADP National Employment Report on Wednesday pointed to continued strength in the labor market ahead of Friday's monthly jobs report -- the last major piece of economic data the Fed will consider before making a call on interest rates next week. The jobs report showed 298,000 jobs were added in February, beating consensus estimates of around 189,000. Most investors believe the figure would have to come in dramatically below expectations to knock the Fed off course.

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