Morning Notes

13/10/2017 Argonaut Morning Note

Market Update & Important Indicators
U.S. stock indexes retreated from records intraday, weighed down by declines in bank stocks. The latest earnings season kicked off in earnest this week, with several large lenders scheduled to report quarterly results through Friday. Investors are watching the reports to gauge not just the health of the U.S. financial system but the outlook from top executives for the final quarter of the year. Strong earnings growth has supported major stock indexes this year, helping the S&P 500 notch 44 record closes and the Dow Jones Industrial Average hit 48 closing highs so far in 2017. Solid results should help U.S. stocks keep climbing, some analysts said, even as many raise concerns about valuations that look pricey. The Dow Jones Industrial Average was up 31 points, or 0.1%, intraday to 22840 after finishing at a record Wednesday. The S&P 500 edged down 0.1%, while the Nasdaq Composite fell 0.1%. The U.S. gold price traded higher once more overnight, gaining 0.2% to finish at 1,293.10 US$/oz.

Spanish stocks closed fractionally lower, catching their breath after the prior day's rally that was sparked by worries abating over Catalonia's independence push, while Europe's main equity benchmark also struggled for direction. Spain's IBEX 35 index fell less than 0.1% to finish at 10,275.90, pausing after Wednesday's 1.3% gain. The Spanish benchmark is up 0.9% for the week, but down 1% for October. The pan-European Stoxx Europe 600 index closed less than 0.1% higher at 390.28. Germany's DAX 30 index edged up 0.1% to finish at 12,982.89 for another record close, while France's CAC 40 index inched down by less than 0.1% to 5,360.81. The U.K.'s FTSE 100 index showed more life than its peer benchmarks, rising by 0.3% to end at a record at 7,556.24, according to FactSet data. It was helped by a drop in the pound that came on news of a stalemate in Brexit talks.

Asian stock markets extended gains, taking cues from records set on Wall Street Wednesday and a robust earnings outlook for the region. Japan's Nikkei Stock Average gained 0.4%, building on Wednesday's rise to a 21-year closing high. Korea's Kospi added 0.6% to Wednesday's record close. In Hong Kong, the Hang Seng Index reversed early losses to trade up 0.4% amid gains in financials and property stocks. The Shanghai Composite Index edged up 0.1% ahead of new policy initiatives from the Communist Party Congress, which starts next week. Singapore’s Straits Times Index closed 0.6% higher at 3301.31, the highest since mid-August.

Australian shares logged their fourth gain in the past five sessions as the global push higher continues. Settling at the day's high, the S&P/ASX 200 advanced 0.4% to 5794.5, with only the materials sector in the red thanks to further declines in iron-ore prices. After falling for five straight months, the longest losing streak in six years and the last four each being less than 0.6%, the index has rebounded 2% so far this month to get back to the upper end of the narrow range that's held since May. The big banks added more than six of the 22.4 points of index gains. Energy stocks rose on further oil gains overnight.

The London Metal Exchange’s 3-month copper contract again traded higher overnight, adding another 1.3% to finish at $6,887/t. The other base metals finished mostly higher. Aluminium prices rose 0.8% to 2,122/t, whilst tin prices fell 0.6% to 20,865/t. Zinc prices gained 1.4% to 3,341/t. Nickel prices traded firmly higher again, posting a 2.5% gain to finish at 11,338/t. Lead prices pulled back, falling 0.2% to 2,547/t.

Recent Contacts & Presentations
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