Morning Notes

18/05/2017 Argonaut Morning Note

Turbulence in Washington jolted markets out of an extended period of calm Wednesday. Stocks slid as investors pulled back from bets on the swift passage of President Donald Trump's agenda. In one of the clearest signs of waning investor confidence, a closely watched measure of the dollar's value was on track to give back its postelection gains. Stocks fell around the world, with major U.S. stock indexes heading for their biggest declines in months. U.S. stocks remain close to record highs and few investors said they expect a major pullback, but many said they were increasingly worried about the implementation of proposed policies such as tax cuts, deregulation and infrastructure spending following a series of developments in Washington. Some traders said Wednesday's selling was sparked by reports that President Donald Trump had allegedly asked then-FBI Director James Comey to back off the investigation of former national security adviser Michael Flynn. Wednesday's moves upended weeks of stability. Among market sectors, bank stocks were hit hardest: Financials in the S&P 500 were down about 2.8%. On the contrary, the U.S. gold price rose strongly overnight, rising 2.0% to 1,260.90 US$/oz.

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17/05/2017 Argonaut Morning Note

The Nasdaq Composite headed toward a fresh record close intraday, as shares of technology companies climbed in an otherwise downbeat session. The tech-heavy index has outperformed both the S&P 500 and the Dow Jones Industrial Average in 2017 as investors have piled into the shares of companies thought to benefit from U.S. economic growth. That's left the Nasdaq up about 14% this year, while the S&P 500 has gained 7.2% and the Dow industrials have risen 6.2%. Still, some investors and analysts caution that technology stocks, which have risen double-digit percentages in the S&P 500 in 2017, may be vulnerable to a pullback. Global fund managers say the Nasdaq has become the most crowded trade, Bank of America Merrill Lynch found in a survey. The Nasdaq Composite rose 0.3%, on course for its 33rd record close of the year. The Dow Jones Industrial Average fell 1 point, or less than 0.1%, to 20982 and the S&P 500 lost less than 0.1%. The U.S. gold price rose again for the day, finishing 0.5% higher at 1,236.70 US$/oz.

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16/05/2017 Argonaut Morning Note

U.S. stocks rose Monday as a jump in commodities prices boosted shares of energy and mining companies. U.S. crude oil rose 2.1% to $48.85 a barrel after top energy officials in Saudi Arabia and Russia said they would back a nine-month extension to a production-cut deal led by the Organization of the Petroleum Exporting Countries. Saudi Arabia's Energy Minister Khalid al-Falih and Russian Energy Minister Alexander Novak said the pacts could continue until the end of March 2018. Energy stocks in the S&P 500 climbed 1%. Shares of mining companies also advanced on gains in base metals prices after Chinese President Xi Jinping pledged more than $100 billion in new financing as part of a mega-infrastructure project. The U.S. gold price also rose for the day, jumping 0.2% to 1,230.40 US$/oz.

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15/05/2017 Argonaut Morning Note

U.S. stocks edged lower Friday, as the latest batch of U.S. economic data fell short of expectations. The lacklustre readings follow a string of soft first-quarter data. Investors have largely brushed off signs of weak economic growth in 2017 on the rationale that the first few months of the year tend to be slow and corporate earnings have been stronger than expected. U.S. stocks are hovering close to record highs, while volatility has fallen to historical lows. The Dow Jones Industrial Average fell 23 points, or 0.1%, to 20897. The S&P 500 dropped 0.2%, and the Nasdaq Composite edged up 0.1%. The stocks that climbed were defensive plays. Utilities were the best performers in the S&P 500 on Friday, up 0.5%. The U.S. gold price rose 0.2% to 1,227.70 US$/oz. Earlier Friday, retail sales improved slightly less than anticipated in April, according to the Commerce Department, and a closely watched measure of underlying U.S. inflation came in soft, the Labor Department said. When excluding food and energy prices, the consumer-price index, rose 1.9% in April from the prior year, the first time it's been below 2% since October 2015.

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12/05/2017 Argonaut Morning Note

U.S. stock indexes pulled back intraday, as disappointing earnings reports put pressure on shares of consumer-discretionary companies. Major indexes initially headed toward one of their biggest declines of the month as retail stocks slid, then pared losses heading into the afternoon. Individual stocks have sold off following corporate earnings reports, but stock indexes have barely budged in recent sessions - a trend attributed to investor belief that the U.S. economy was on solid footing. The Dow Jones Industrial Average fell 31 points, or 0.2%, to 20912 intraday. The S&P 500 lost 0.3%, and the Nasdaq Composite shed 0.3%. Rising for the day, the U.S. gold price jumped 0.5% to 1,224.80 US$/oz.

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