Morning Notes

11/09/2017 Argonaut Morning Note

Market Update & Important Indicators
U.S. stocks notched weekly declines, with severe weather and ongoing tension between the U.S. and North Korea driving some of the biggest moves. Shares of financial companies rose Friday, but posted their worst week in months as banks and insurers tumbled. The Dow Jones Industrial Average edged up 13.01 points, or less than 0.1%, to 21797.79 on Friday. The S&P 500 slipped 3.67 points, or 0.1%, to 2461.43 and the Nasdaq Composite fell 37.68 points, or 0.6%, to 6360.19, weighed down by declines in tech shares. All three indexes notched weekly declines. Insurance companies have fallen as firms reckoned with the fallout from Hurricane Harvey and as Hurricane Irma has battered several Caribbean Islands, threatening further damage as it approaches Florida. The U.S. gold price pulled back slightly overnight, losing 0.2% to close at 1,346 US$/oz.

European stocks ended a choppy day slightly higher, but with gains capped by euro strength and worries North Korea will launch another missile over the weekend. The Stoxx Europe 600 index closed 0.2% higher at 375.51, trimming its weekly loss to 0.2%. After a frenetic week, activity ground to a halt as investors looked nervously towards a weekend that could see another North Korean provocation. Another worry is Hurricane Irma, which could make landfall in Florida over the weekend. The hurricane-the worst ever in the Atlantic Ocean-comes just two weeks after Harvey wreaked havoc along the Texas and Louisiana Gulf Coast, causing up to $190 billion in damage, according to an AccuWeather estimate. In addition, a powerful earthquake in Mexico ahead of the European trading session dampened investors' enthusiasm.

Stocks markets were mixed in the Asia-Pacific region Friday. Japan's Nikkei Stock Average closed down 0.6%, as Japanese electronics companies were hurt by the strong yen, which hit a 10-month high against the dollar overnight. South Korea's Kospi fell 0.1% and the S&P/ASX 200 closed 0.3% lower. Some other Asian markets recorded gains, with Hong Kong's Hang Seng Index rose 0.5%.

Australian stocks capped a 3rd-straight losing week in falling Friday, hit again by selling in major banks, as many investors in the region stepped back from taking aggressive positions into the weekend as worries over North Korea linger. The fall by financial stocks tracked losses on Wall Street overnight amid falling bond yields, and as CBA notched a 7th-straight weekly decline amid continued investor worries about legal issues. Despite a late bounce after bumping along at lows much of the afternoon, the S&P/ASX fell 0.3% to 5672.6. AGL led utilities higher with a 2.1% gain as Moody's pointed to benefits to coal-fired power generators from a narrowing supply-demand balance.

The London Metal Exchange’s 3-month copper contract traded lower overnight, dropping 2.98% to finish at $6,693/t. The other base metals also finished lower. Nickel prices fell 4.7% to 11,524/t, while aluminium prices dropped by 0.5% to close at 2,072/t. Lead prices lost 3.3% to close at 2,234/t, whilst Zinc prices fell by 3.1% to 3,029/t. Tin prices shed 1.0% to finish at 20,670/t.

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