Morning Notes

25/10/2018 Argonaut Morning Note

The selloff of US Equities accelerated overnight, wiping out gains for the year in both the S&P 500 Index and the Dow, as mixed corporate earnings and weak housing data see investors concerned over rising prices and its implications on economic growth; The S&P extended its October rout to 8.8%, making it the worst month since February 2009; Oil rebounded from a two-month low as refiners started to wind down seasonal repairs, a signal of an imminent demand hike; Base metals fell, with nickel posting the lowest closing price this year, with the Bloomberg Industrials Metals Subindex, tracking aluminium, copper, nickel and zinc, falling for a second straight day; Despite US GDP growth slowing over the third quarter, figures still remain near their best pace since mid-2015 according to forecasts ahead of Friday’s official release; The Bank of Canada raised rates to 1.75%, the 3rd hike this year and said for the first time in more than a decade that it expects to completely remove monetary stimulus.

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24/10/2018 Argonaut Morning Note

US equities closed down 150 points, amid investor concerns over lower than expected earning’s results (Industrial Giant Caterpillar down 7.5%) and global concerns over China’s economic growth; Crude slid more than 5% in Tuesday’s session as Saudi Arabia pledged to meet any supply shortfalls and a risk averse sentiment spread throughout global markets. Saudi Energy Minister said OPEC and its allies are in “produce as much as you can mode” to meet demand and replace any looming shortages due to Iranian sanctions; Trump has deferred to Congress on US response to Kashoggi killing with Turkey rejecting the Saudi account of the killing; Copper and nickel declined (0.8% and 1.3%) amid persistent concerns about the outlook for the Chinese Economy, despite LME Copper Inventories falling to their lowest levels since April 2016.

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23/10/2018 Argonaut Morning Note

Poor earnings results and falling oil prices pulled back the S & P 500 by 0.4% to 2,756; AUD reaches 2018 low as Scott Morrison faces prospect of minority government; Euro under pressure as the U.K. and E.U disagree on Brexit conditions; Gold $1222, AUD Gold $1727, HUI -1.35%, GDXJ -1.21%, Silver $14.57, Plat $823; Iron Fe 62% $74.40, Fe 58% $49.30, Rebar 4168, BHP adrs +0.72% disc A$33.34; WTI $69.36, Brent $79.83, U.S. producers have been pumping more than 10.5m barrels a day since April, and U.S. crude stockpiles rose by 3m barrels last week, according to Bloomberg; Turkish government is due to publish their findings post an investigation into the death of Jamal Khashoggi.

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22/10/2018 Argonaut Morning Note

US equity markets were mixed on Friday night, the S&P was flat, with the Dow up 64 points, the biggest contributor was Proctor & Gamble which rose 9% on surprisingly strong sales. 84 of the S&P have reported earnings with positive earnings surprises running at 86%; The fallout from the death of journalist Khashoggi continued with the Saudi`s arresting 18 people, while Turkey has promised to give full details of their investigation on Tuesday. The US Government was wary of the blame game with Treasury Secretary emphasising the importance of US economic ties to Saudi, though his own Republicans urge Trump, ‘not to look the other way’; Australia under pressure as Scott Morrison seems likely to have a minority Government as polls suggested the Liberals would lose a Sydney by-election at Wentworth, though the final count may take a few days; Copper futures in New York declined for a fourth straight session, the longest slump in more than six weeks, as energy prices dropped on the outlook for greater supply of the fuel. 

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19/10/2018 - Argonaut Morning Note

US equity markets fell sharply again on Thursday, with the Dow down 327 points; the 5th move over 1% in 8 sessions; A large number of US company earnings last night gave mixed readings – two economic bellwethers disappointed with United Rentals falling 15% and Snap on Tools down 10% US 10 year bonds were yielding 3.17%, as the US dollar hardened to 95.90 for the DXY;  US 10 year bonds were yielding 3.17%, as the US dollar hardened to 95.90 for the DXY; Interest rate expectations have risen post the FOMC minutes. St Louis President James Bullard however gave a move dovish stance as he proposed a new policy rule that concluded there is no need to raise interest rates further; The incident involving Saudi journalist Khashoggi continues to strain relations with Saudi allies, with a number of countries boycotting an upcoming investment conference in Riyadh.

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