Morning Notes

09/07/2018 Argonaut Morning Note

Market Update & Important Indicators:

U.S. stocks jumped Friday and posted weekly gains, as signs of a buoyant labor market helped investors look past escalating trade tensions between the world's two biggest economies. Investors contended with a confluence of forces heading into the end of the trading week. Labor Department data Friday showed the number of job seekers rising in June and U.S. employers adding to payrolls for the 93rd consecutive month-extending what has been the longest continuous jobs expansion on record. The unemployment rate ticked higher, but remained near an 18-year low. The upbeat report helped reassure many that the U.S. economy remains on strong footing, even as some worry that increasingly fractious trade policies around the world could weigh on global growth. The U.S. slapped levies on $34 billion of China's exports early Friday, while in response, China's State Council said it applied tariffs on 545 U.S. items ranging from agricultural products to vehicles. The Dow Jones Industrial Average rose 0.4%, to 24456.48. The S&P 500 added 0.8%, to 2759.82 and the Nasdaq Composite advanced 101.96 points, or 1.3%, to 7688.39. The gains came in a quiet session, with just 5.2 billion shares changing hands across exchanges owned by the New York Stock Exchange and Nasdaq--the lowest volume for a full trading day this year. For the week, the Dow industrials added 0.8%, while the S&P 500 notched a 1.5% gain and the Nasdaq posted a 2.4% advance, its biggest one-week rise since May.

The Stoxx Europe 600 index closed up 0.2% at 382.36 as traders brushed off trade war fears for now, while sentiment was helped by U.S. data revealing that more jobs were created but wage growth was weaker than expected. Germany's DAX ends up 0.3%, France's CAC 40 up 0.2%, and the U.K.'s FTSE 100 up 0.2%. Spain's IBEX 35 performs better, up 0.4%, while Italy's FTSE MIB ends marginally higher, up 0.05%.

Chinese stocks rebounded in late trading, with the Shanghai Composite up 0.5%. Japan's Nikkei 225 rose 1.1%, but both indexes were set to finish down for the week.

Australian shares showed little anxiety over U.S.-China trade tariffs, outperforming throughout the day while steadily building on early gains to notch another 10 1/2-year high. The S&P/ASX rose 0.8% to 6356, the best day in two weeks and put the week's gain at 1.3%. The heavily weighted bank majors rose as much as 2% today while energy rose 1.3% to hit another 3 1/2-year high even as oil fell overnight. Elsewhere, big telco Telstra carried its recovery for a fifth straight day, leaving it up 6.9% this week.

Base metal prices were mostly down on the London Metal Exchange. The 3-month copper contract lost 1% to 6,279/t while tin finished 0.5% lower at 19,393/t. The price of aluminium gained 0.4% to 2,110/t and nickel recorded a 1.8% decrease to 13,851/t. Zinc added 0.9% to end at 2,763/t

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