Morning Notes

08/11/2018 Argonaut Morning Note

Global equities surged overnight as the markets moved past the hurdle of uncertainty surrounding the US mid-term elections. Investors can now look towards other economic news flow with the Fed’s decision on interest rates coming out tomorrow and a potential for a resolution to the US-China trade war at the end of the month; Last night marked the fourth best gain this year for the Dow, up 2.1%. The S&P and Nasdaq rose 2.1% and 2.6% respectively; Oil continued its downward trend, with WTI down nearly 1%, which is the eighth-daily loss in a row. Oil has now dropped $15/bbl since its four year high over a month ago; The expectations that the Democrats hold on the House will curtail Trump`s ability to shoot from the hip will be tested early as Attorney general Jeff Sessions was forced to resign, replaced by a Trump loyalist, in turn throwing into question the Russia investigation led by Robert Mueller;The fall in the US dollar and the DXY hitting its lowest for two weeks (96.18) will help support commodity prices. The VIX fell sharply -20% @ 16.36. Gold rose for the first time in 4 sessions.

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7/11/2018 Argonaut Morning Note

U.S. equity markets advanced through cautious trading in anticipation of US midterm election results, the Dow Jones lifted 0.7% to 25,635 whilst the S&P 500 added 0.6% to 2,755; The US midterm elections are underway with polls showing the Democrats are favoured in taking the House whilst the Republicans are in better shape to keep the Senate, according to Bloomberg; Oil fell to a 7month low as the IEA calls on OPEC to pump more crude and Iraq plans to boost its output and export capacity in 2019, according to Reuters; The RBA board met yesterday with its final decision to maintain its neutral stance leaving the official cash rate at 1.5%; The FOMC meets on Thursday with expectations for rates to be left on hold.

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06/11/2018 Argonaut Morning Note

US equities climbed for the fourth day in five amid mixed results with tech stocks falling (Apple down 2.9%), although a late surge from the Dow and the S&P saw the two close up 0.8% and 0.6% respectively; Copper and most other base metals fell overnight after a speech from China’s President Xi Jinping offered no signs of a resolution to the trade war with the US; Global oil prices were mixed on Monday. The US formally applied trade sanctions on Iran, although eight countries were granted temporary waivers allowing them to buy oil from the country. The US, Russia and Saudi Arabia are pumping more oil to offset the production lost by Iran; The RBA Board is set to meet this morning and the US mid-term elections are to be held in Washington. The Democrats are expected to take control of the House of Representatives but fall short of the Senate. Only four times in the past 150 years has the opposition not gained some seats.

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05/11/2018 Argonaut Morning Note

US Markets fell for the first time in four sessions on Friday with the DOW down 0.43%, the S&P 500 down 0.63% and the NASDAQ down 1.04% despite positive October employment results (60,000 more than expected) and news of the strongest wage growth the US has seen in almost a decade; Hopes of a trade deal between the US and China helped Asian markets end the week on a strong note with HK sharply higher on Friday, Hang Seng +4.2% and China CSI +3.6%. LME metal prices were stronger, Nickel up 1% while Copper surged over 3%; China President Xi opens a trade expo in Shanghai, as Trump suggests a deal possible at G20 in Argentina on November 30th; Markets are set to face major economic news over the coming days with the US sanctions on Iran commencing in the next 24 hours, the RBA’s board meeting tomorrow and the US mid-term elections also being held on Tuesday. Most polls are suggesting a 7-point lead for the Democrats; The US has granted waivers to 8 nations for oil purchases from Iran as part of their sanctions. The Oil price fell again with WTI at $63.14, the lowest since April.

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02/11/2018 - Argonaut Morning Note

US equities rose for a third day in a row as investor sentiment was positive following a good cohort of earnings results and signs of an easing trade war between the US and China. The Whitehouse indicating that the President had a ‘long and very good’ conversation with China’s President, Xi Jinping, particularly over the trade war ahead of the G20 summit in November; We received a further indication of how well the US employment market is doing after data on claims for unemployment benefits are at their lowest levels seen since 1973. Official US employment statistics will be released later tonight; Oil prices fell quite substantially overnight, closing at a seven-month low with Brent and WTI down 2.5% and 2.9% respectively; Oil moved downward after signs of US supply accelerating and on speculation that American sanctions against Iran will not succeed in reducing exports to zero;  The Bank of England left rates on hold, but Mark Carney gave a hawkish view with inflation running above 2%; One bad apple may spoil the sentiment. Apple fell after hours on disappointing forecasts, APPL -7%. 

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