Morning Notes

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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18/05/2018 Argonaut Morning Note

Shares of Cisco Systems, an index heavyweight that had been a major contributor to the S&P 500 this year, were punished after the networking giant offered earnings guidance late Wednesday that wasn't much better than analysts' expectations, despite the strong IT spending backdrop. Cisco has been having bigger impact on the market-cap weighted S&P 500 this year due to its size and because its stock has been among the best performers of the year. Prior to Thursday, the tech company had contributed more than 6% of the broad index's small gain for the year, according to S&P Dow Jones Indices. Shares fell 3.5% Thursday and dragged down shares of other communications equipment providers on a day when other popular tech stocks like Apple and Google parent Alphabet also edged lower. The Dow Jones Industrial Average fell 0.2%, while the S&P 500 slipped 0.1% and the Nasdaq Composite lost 0.2%.  Meanwhile, energy companies spiked higher, but not enough to overcome the broader market's weakness.  Energy companies in the S&P 500 have added 16% since the end of March, outperforming the 10 other sectors in the broad index, including shares of technology companies, which are up 4.5% over the same time. Energy stocks in the S&P 500 are yielding about 2.8% via dividends, up from 2.5% in 2016 and better than the 1.9% for the broader S&P 500, according to S&P Dow Jones Indices. The US gold price remained unchanged at 1,290.20 (US$/oz).

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17/05/2018 - Argonaut Morning Note

The Dow Jones Industrial Average rose 0.3%. The blue-chip index snapped an eight-session winning streak Tuesday and remains about 7% off its January all-time high. The S&P 500 added 0.4%, and the tech-heavy Nasdaq Composite climbed 0.8%. Macy's shares surged 11% after the department store exceeded same-store sales expectations in the most recent quarter and lifted its targets for the 2018 fiscal year. Other retailers such as Target and L Brands were also among the S&P 500's best performers. Cisco Systems is scheduled to report earnings after the market closes Wednesday, while Walmart and J.C. Penney are on tap for early Thursday. Rosy retail sales data Tuesday have also supported consumer stocks and expectations for robust growth in the U.S., though the figures also reignited worries about higher interest rates. The dollar has also climbed to fresh 2018 highs, stoking fears that it will become more expensive for foreign governments and companies to repay dollar-denominated debt. Still, some investors think markets can withstand higher rates as long as the Fed sticks with its current gradual pace of tightening.

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16/05/2018 - Argonaut Morning Note

U.S. stocks fell and bond yields rose intraday amid mixed data from key global economies and as trade negotiations between the U.S. and China continued. In the U.S., data have also been coming in somewhat below expectations in recent months.  The Dow Jones Industrial Average declined 220 points, or 0.9%, to 24679, on track to break an eight-session winning streak. The S&P 500 dropped 0.7%, and the Nasdaq Composite fell 1%.  Through Monday, the blue-chip index had risen 974 points, or 4.1%, since May 3 as stocks appeared to be regaining their footing after several months of rocky trading. But declines pushed the Dow industrials back into negative territory for the year. A number of factors, including trade concerns, geopolitical tensions, signs of a pickup in inflation and peaking corporate earnings, have kept some investors on the sidelines. 

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15/05/2018 - Argonaut Morning Notes

U.S. stocks rose Monday afternoon as investors digested signs of easing between the U.S. and China. The Dow Jones Industrial Average climbed 0.3%, putting it on track for its eighth consecutive session of gains -- its longest streak since September 2017, when it rose for nine straight sessions. The blue-chip index remains down about 6% from its Jan. 26 high.  The S&P 500 rose 0.1%, with six of 11 sectors trading higher, and the Nasdaq Composite added 0.2%.  Energy stocks were the biggest gainers in the S&P 500, rising 0.7%, as U.S. crude prices edged up 0.5% to $71.03 a barrel. Health-care stocks added 0.4% after President Donald Trump on Friday unveiled a raft of modest measures to curb high drug prices that left the pharmaceutical industry relieved and buoyed their stocks. And shares of gaming firms climbed following the decision by the U.S. Supreme Court to let states permit sports betting. Caesars Entertainment rose 6.7%, and Penn National Gaming climbed 4.3%. The US gold price finished 0.4% lower at 1313.00 US$/oz

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