Morning Notes

10/08/2018 Argonaut Morning Note

Market Update & Important Indicators

The S&P 500 drifted between small gains and losses intraday, as the latest round of corporate earnings reports offered some support to a stock market reckoning with yet another trade volley. The broad index struggled to move higher most of the morning, even after shares of several companies, including telecommunications firm CenturyLink and energy drink maker Monster Beverage, gained following upbeat earnings results. Investors said renewed trade tensions sapped some of the market's enthusiasm after China threatened Wednesday to slap new tariffs various chemicals and medical equipment, among other goods. Beijing released the list of items as part of its promise to keep pace with the U.S.'s trade threats, which caused stocks to sputter Wednesday, snapping a four-session streak of gains for the S&P 500 and Dow industrials. The US Gold price decreased 0.1% to 1212.10 US$/oz.

European stock mostly struggled, as investors attempted to dispel trade-war angst between the U.S. and China and as shares of financials and the pharmaceutical companies weighed on the broader market. The Stoxx Europe 600 erased losses and moved to unchanged at 390.05, after finishing 0.2% lower on Wednesday at 389.69. The day's moves come after Tuesday marked the index's best close since late July. The pan-European gauge is on pace for a rise of about 0.1% so far this week, having pushed into positive territory for the year this week. Germany's DAX 30 rose 0.3% to 12,671.09, while France's CAC 40 was flat at 5,500.63. The U.K.'s FTSE 100 slid 0.4% to 7,742, as the British pound was flat at $1.2880. Meanwhile, the FTSE MIB Italy index declined by 0.6% to 21,634.13, while Spain's IBEX 35 was little changed at 9,738.90.

In Asia, stock markets were all over the map, with local factors dominating amid a lack of overseas trading cues. Potential government interventions in tech sent the sector higher in China, fueling gains of more than 2% for major indexes. That also helped Hong Kong. A stronger currency capped Japan's stocks. Japan's Nikkei edged lower 0.2% and Hong Kong's Hang Sang rose 0.9%. The Philippines fell 0.4%, well off session lows, after a weak gross domestic product report and ahead of the imminent central-bank policy statement. The moves came as India's Sensex continued to hit more record highs. Indian shares were led by bank stocks. The S&P BSE Sensex closed at a fresh high of 38,024.37, up 0.4%, taking this year's gain to nearly 12%. Investors remain upbeat on bank stocks on hopes of lower bad loan provisions.

As earnings season again dominated Australian stock action, good news helped push the country’s benchmark to a fresh 10 1/2-year intraday high. Easing a bit into the close, the ASX all Ords finished up 0.5% at 6384 Earnings-driven rallies from Suncorp, Magellan Financial and Crown Resorts helped the financial and consumer-discretionary sectors dominate. But AGL fell 4.1% as new-year earnings guidance fell short of expectations and energy stocks fell -- as elsewhere in the region -- following oil's Wednesday slump.

Base metal prices were mostly down on the London Metal Exchange. Nickel recorded a 1.2% decrease to 13,804/t whilst tin gained 0.8%% to 19,611/t. The 3-month copper contract added 0.9% to 6,199/t, Zinc decreased 0.8% to close at 2,632/t. Aluminium recorded a 1.1% decrease to 2,061/t.

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