Morning Notes

09/11/2018 Argonaut Morning Note

US markets were a lot quieter overnight after Wednesday’s rally, with the Dow lifting only 11 points and the S&P down 0.25%; The US Federal Reserve left the federal funds rate at 2.00% - 2.25% as expected, and is still on track to lift rates next month. The Fed reiterated, “Household spending has continued to grow strongly, while growth of business fixed investment has moderated from its rapid pace earlier in the year”; Oil continued to fall for its ninth consecutive day (Brent down 1.5%), as we enter a bear market having dropped nearly 20% from its peak five weeks ago. Supply concerns continue to ease as the US is named the largest global oil producer with output at record highs of 11.6 million barrels per day realised over the past week; Base metals mostly increased on the LME overnight with lead rising as much as 4.2% and zinc up 3.4%; The world’s largest lithium producer, Albemarle has opted to halt plans to expand its lithium carbonate production in Chile, after announcing yesterday it would focus on its Western Australian lithium hydroxide operations. The department of mines highlighted this view for LiOH, announcing that in FY18, WA produced $1.5bn worth of revenue from spodumene concentrate.

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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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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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