27/08/2018 – Argonaut Morning Note

Market Update & Important Indicators:

The S&P 500 rose to a fresh high, bringing to an end its longest streak without a record in two years and affirming the bull market's longevity. Major indexes had drifted between small gains and losses over the course of the week, with the S&P 500 quietly notching the milestone of the longest-ever U.S. bull market Wednesday but finishing just shy of setting a new record close. The Nasdaq Composite and Russell 2000 also finished the week at fresh highs. The Dow Jones Industrial Average added 133.37 points, or 0.5%, to 25790. The S&P 500 rose 18 points, or 0.6%, to 2875 and the NASDAQ advanced 67.52 points, or 0.9%, to 7945.98. For the week, the Dow industrials were up 0.5%, while the S&P 500 was up 0.9% and the NASDAQ rose 1.7%. Corporate earnings drove swings in individual stocks throughout the week. The US gold price gained 1.7% to 1205.30 US$/oz.

Italian shares lifted on unconfirmed reports that President Trump offered to buy the country's debt. The Stoxx Europe 600 Index rose less than 0.1% to close at 383.56, leaving it with a gain of 0.7% for the week and marking the first weekly rise in three weeks. The U.K.'s FTSE 100 rose 0.2% to finish at 7,577.49, ahead of a three-day weekend, leaving it with a 0.3% weekly rise. Germany's DAX finished 0.2% higher at 12,394.52, leaving it up 1.5% for the week. Italy's FTSEMIB Italy Index ended 0.6% higher at 20,741.96, while the CAC 40 Index finished with a gain of 0.2% at 5,432.50.

Chinese indexes turned in mixed results after two days of midlevel trade talks between the U.S. and China failed to yield any breakthroughs. The Shanghai Composite Index rose 0.2% Friday, bringing its gains for the week to 2.3%, while the Shenzhen A Share index dropped 0.2%. Representatives of the two governments largely repeated talking points during the discussions in Washington, according to people closely tracking the talks. China's Commerce Ministry called the meeting "constructive and frank" in a statement. Early this week, the two countries imposed tariffs on an additional $16 billion of each other's imports, bringing the total amount of goods under each country's levies to $50 billion.

Amid the week's political strife which led to a new prime minister, Australian stocks logged slight gains after three-straight days of declines and a fade into the close. The S&P/ASX 200 finished up 2.9 points at 6247.3, capping a 1.4% drop for the week. The market got a midday bounce on Treasurer Morrison's selection to lead the government into the upcoming elections. The gain came even as financials fell further, another 0.5% to put the week's skid at 4.5%. But unlike recent days, the rest of the market was able to more than offset that. Health care jumped 2.1%, hitting record highs again, and consumer names rose more than 1%. That as the Aussie dollar bounced on the PM change, trimming some of this week's drop versus some major currencies.

Base metal prices were mostly up on the London Metal Exchange. Zinc was the biggest gainer rising 2.7% to 2,541/t, whilst aluminium jumped 1% to 2,073/t. Lead gained 1.3% to 2,069/t. Tin fell 0.6% to 19,040/t whilst nickel prices gained 1.1% to 13,338/t. The 3-month copper price gained 2.1% 6,092/t.