Morgans AM: Thursday 8 February 2018

Morgans Financial Limited

US markets finished in the red after a choppy session ended with a weak close as a fresh spike in bond yields weighed on investors' minds - Dow slipped -19-points or -0.08% and The broader S&P500 shed -0.50%, with the Energy and Technology sectors leading the decline. Both the Dow and S&P500 relinquished their biggest intra-session points gains in ~3-years overnight, with the Dow up ~381-points at its session peak and the S&P500 ~33-points. The technology-centric NASDAQ fell -0.90%. News that Congressional leaders reached an agreement on a two-year budget pact that would increase fiscal spending by US$300B on the back of a big increase in military spending is likely to put to rest fears of another government shutdown. The deal still needs to be approved by the Congress. Separately, President Trump described the stockmarket's recent fall in the face of good news about the economy as a "big mistake". Also interesting was a Bloomberg report that the world's largest exchange traded fund (ETF) suffered record outflows this week, with money managers pulling US$17.4B from the SPDR S&P500 ETF over the past four trading sessions. The US$8B reportedly withdrawn on Tuesday alone was the third-largest daily withdrawal in the post-GFC era.