Morning Notes

25/05/2018 - Argonaut Morning Note

The Dow Jones Industrial Average fell more than 100 points intraday after President Donald Trump called off a summit with North Korea, hitting investors with a new wave of uncertainty. News of the cancelled summit came within 30 minutes of the stock market's open, pulling down major indexes that were already showing signs of weakness. Investors had hoped the summit, which was scheduled for June 12, would ease tensions between the two countries and bring some stability to the Korean Peninsula. Instead, talks ahead of the summit stumbled after Pyongyang refused demands to denuclearize. The Dow declined 75 points, or 0.3%, to 24812 in recent trading, paring its earlier decline of more than 200 points, while the S&P 500 fell 0.2%. The Nasdaq Composite slipped 0.2%. The US gold price gained 0.9% to 1,304.10 (US$/oz).

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24/05/2018 - Argonaut Morning Note

The Dow Jones Industrial Average and S&P 500 erased their losses Wednesday after minutes from the Federal Reserve's latest meeting showed the central bank plans to stay on a gradual path of rate increases even if inflation meets its target. The Dow industrials was up 0.2%, after earlier falling as much as 0.7%. The S&P 500 gained 0.3%, and the Nasdaq Composite added 0.2%. Worries about the Fed raising rates faster than expected have buoyed Treasury yields and the dollar lately and contributed to swings in stocks. Some analysts worry that higher borrowing costs will crimp future profit growth and a continued rise in bond yields will make stocks less attractive. Wednesday's minutes showed the Fed remains on track to raise rates in June as expected, but that the central bank plans to stay on its moderate path as it boosts rates to historically normal levels and unwinds its balance sheet. Stocks opened lower Wednesday as investors continued to assess a range of trade tensions and a drop in commodity prices. Investors were also parsing reports that President Donald Trump is weighing measures to cut European Union steel and aluminium exports to the U.S. by about 10%. The US gold price gained 0.2% to 1,293.00 (US$/oz).

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23/05/2018 - Argonaut Morning Note

U.S. stocks bounced between small gains and losses intraday, a day after waning concerns about trade tensions between the U.S. and China helped send major global indexes to their highest close in months. The Dow Jones Industrial Average fell 179 points, or 0.7%, to 24834, after rising Monday above 25,000 for the first time since March. The S&P 500 fell 0.3%, and the Nasdaq Composite added less than 0.1%. Six of the 11 sectors in the S&P 500 rose, led by shares in financials and telecom companies, which both rose 1.1%. The mixed tone in markets came after industrial companies rallied on Wall Street on Monday after Treasury Secretary Steven Mnuchin said the U.S. would suspend its efforts to apply tariffs to $150 billion in Chinese imports. The US gold price retreated 0.1% to 1,290.60 (US$/oz).

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22/05/2018 - Argonaut Morning Note

U.S. stocks surged Monday, powered by shares of industrial companies, as concerns about a trade war between the U.S. and China eased. The Dow Jones Industrial Average jumped 1.2%, topping 25013 for the first time since March 16. The S&P 500 and Nasdaq Composite advanced 0.7% and 0.6%, respectively. Money managers said discussions between the U.S. and China this weekend have helped avert a trade war. Treasury Secretary Steven Mnuchin said the U.S. will suspend its efforts to apply tariffs to $150 billion in Chinese imports to the U.S., and that China would hold its threat to retaliate with tariffs on $50 billion in U.S. goods. To many investors, tariff threats stoked concerns that more countries world-wide would erect larger gates on trade. Stocks have rallied several times on the belief that trade tensions were easing, only to fall back down as investors took the opposite view. While the global economy remains robust and first-quarter earnings have been strong, stock markets have mostly traded sideways this year because many investors have started to fear that the pace of the expansion has already peaked. The US gold price was largely unchanged at 1,292.20 (US$/oz).

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21/05/2018 - Argonaut Morning Note

U.S. stocks stalled Friday, posting weekly losses as bubbling uncertainty around global trade policies and interest rates limited investors' appetite for risk. Stocks struggled for traction as investors grappled with geopolitical tensions spurred by new government proposals in Italy, doubts about a coming meeting between the U.S. and North Korea and continuing trade talks with China. The Dow Jones Industrial Average edged up 1 point, or less than 0.1%, to 24715. The S&P 500 declined 7 points, or 0.3%, to 2713 while the Nasdaq Composite lost 28.13 points, or 0.4%, to 7354.34. For the week, the Dow industrials fell 0.5%, while the S&P 500 lost 0.5% and the Nasdaq shed 0.7%--snapping a two-week winning streak. Bond like sectors of the stock market took a hit as rising crude-oil prices and interest rates stoked fresh investor bets on inflation. Shares of utilities and real-estate companies in the S&P 500, which are considered bond proxies because of their relatively hefty dividend payouts, both posted weekly losses of more than 3%. One factor that has helped keep many investors optimistic: the fact that data continues to suggest the U.S. economy is expanding at a slow and steady pace, even as reports have pointed to some loss of momentum in Europe and Japan. The US gold price rose by 0.13% to 1,291.90 (US$/oz).

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