Morning Notes

23/03/2017 Argonaut Morning Note

U.S. stocks alternated between slight gains and losses as weakness in the financials sector offset gains in technology shares. Technology stocks were providing a haven for bullish investors avoiding sectors such as financials Wednesday, some analysts said. Financial shares in the S&P 500 suffered their worst percentage decline since June on Tuesday as doubts mounted, ahead of Thursday's scheduled vote to dismantle the Affordable Care Act, about President Donald Trump's ability to enact corporate-friendly policies. Expectations for government stimulus had helped lift U.S. stocks to record highs earlier this year, and some were concerned about the new administration's ability to deliver on campaign promises such as tax cuts, deregulation and infrastructure investment as President Trump struggled to round up support for health-care legislation. Technology shares in the S&P 500 rose 0.7%, whilst financial shares fell 0.3%. The U.S. gold price continued its movement upwards rising 0.3% at 1,248.2 US$/oz.

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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.

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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.

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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.

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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.

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