Morning Notes

13/04/2018 Argonaut Morning Note

Market Update & Important Indicators

Bank shares surged intraday, helping major U.S. indexes rebound, as a momentary cool-down in geopolitical tensions helped investors reset their focus on the start of earnings season. The Dow Jones Industrial Average rose more than 200 points, recouping Wednesday's losses that were triggered by concerns of possible U.S. military intervention in Syria, as well as simmering fears around whether global synchronized growth will be disrupted by a trade war. Some of those fears eased after President Donald Trump appeared to tone down the rhetoric on Syria. Without any significant update on how the U.S. plans to proceed with its trade tariffs, investors turned their attention toward the optimistic profit projections analysts have set for first-quarter results. The US gold Price is currently down 1.40% at 1334.30 $USD.

European shares close higher as concerns about the possibility of U.S. military actioning Syria eased and as the euro fell after European Central Bank minutes. The Stoxx Europe 600 index ended up 0.7% at 378.81, with technology stocks broadly higher The U.K.'s Man Group was the top pan-European riser, up 8% after a trading statement, while Micro Focus rose 7.6% on reports that Elliott Management acquired a stake in the company. U.K. stocks underperformed as a whole, however, as the pound rose to a multi-month high against the euro, with the FTSE 100 ending up just 0.02% at 7258.34. Germany's DAX ended up 1%, France's CAC 40 up 0.6%, Spain's IBEX 35 up 0.1% and Italy's FTSE MIB up 1.3%.

Asian stocks fell due to Syria and US tensions. Shares in Tokyo, Shanghai, Sydney and Taipei edged down in choppy trading, though the declines didn't match the 0.9% slide in the Dow Jones Industrial Average overnight. The Shanghai Composite Index and Taiwan's Taiex were each down 0.3%, with a 1% drop in Taiwan Semiconductor Manufacturing the main drag on the island's stocks. The Nikkei Stock Average slipped 0.1%, led by manufacturing, materials and technology stocks. Fanuc, a maker of industrial robots, fell 1.7%. The U.S. dollar was recently trading around Y106.81, near session lows reached during the past three days after minutes from the Fed's policy meeting last month showed officials had expressed greater confidence that inflation would rise to their 2% target over the coming year. Both Hong Kong's Hang Seng Index and South Korea's Kospi were up 0.2%, bucking the regional trend. Samsung Electronics buoyed the Korean index with gains of 0.6%. Korea's central bank kept rates on hold, in line with market expectations.

Australian stocks fell for a second day as the market declined with most others in the region. In a narrow range through the afternoon, the S&P/ASX 200 ended down 0.2% at 5815.5 with the country's major banks falling again. They added to weakness in industrials and property trusts. But commodity names continued to climb, thanks to fresh overnight gains in oil and metals prices. Also, the consumer-discretionary companies rose 0.5%.

The London Metal Exchange’s 3-month copper contract declined on Tuesday night by 1.8% to 6,787/t. The other base metals were mainly lower overnight. Lead prices fell by 3.2% to 2,330/t, whilst zinc prices declined 0.3% to 3,087/t. Nickel finished 1.1% lower at 13,671/t, continuing its upward trend was aluminium which rose 5.2% at 2,337/t. Tin Prices declined 0.3% to 20,980/t

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