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24 April 2019

24/04/2019

Morning Chat and Market Data

Morning chat

Nothing like a little embargo to rally the majors: When 2019 started, Brent Crude was $53.20 a barrel. At the start of April, it was $67.50 a barrel – nearly 27% higher. Now, on the back of the US announcement to cease Iran sanction waivers after May 2, oil leapt again, with Brent closing at $73.88 – another 10%! Not surprisingly, BP and Shell gushed up 2.61% and 2.26% respectively adding 29.88 of the 63.19 points gained by the FTSE100 yesterday. When you consider Glaxo, AstraZeneca and Diageo added another 19.99 points between them, the rest of the market was fairly idle!

Boo! The S&P500’s intra-day high is 2940.91 set September 21 last year. Yesterday hit an intra-day high of 2936.31 – so close! The key drivers were various strong earnings surprises by the likes of toy-maker Hasbro, F35-maker Lockheed Martin and Trump noise-maker Twitter. Hasbro leapt 14.2%, their best day since 1996, as they turned play-doh into real dough pushing a 10¢ per share loss to a 21¢ profit. Lockheed Martin flew 5.7% as Q1 sales beat estimates by nearly $1.8billion on better F-35 sales. Twitter also chirped in with better-than-expected earnings and 15.7% gain – probably fuelled by Trump’s usage and replies!

Playing the medians: Yesterday US March New Home Sales data saw 672,000 homes sold, a decent 3% uplift on the previous year. Big contributing factors were the recent 0.80% fall in mortgage rates and the lower $302,700 median selling price. Putting the latter in context, consider the $46,644 per annum US Bureau of Labor Statistics estimate for Q4 2018 median annual income, roughly 5% more than the $44,562 estimate for Q4 2017. As a result, the current median house price is only 6.39 times the median wage versus the 7.53 times median wage last year. That’s a pretty decent improvement.

Euro-zone consumer confidence slipped more than expected last month slipping to just below the longer run average, and about par for this century.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +8.31 (+0.66%) at 1,261 (YTD: 16.41%; 5YR: 57.2%)
MSCI AC World Equities (USD) up +54.83 (+0.61%) at 9,046 (YTD: 16.40%; 5YR: 46.6%)
Barclays Global Aggregate Bonds down -0.53 (-0.11%) at 486 (YTD: 1.50%; 5YR: 3.8%)

Selected Equity Indices (Capital returns)
S&P 500 up +25.71 (+0.88%) at 2,934 (YTD: 17.03%; 5YR: 56.2%)
NASDAQ up +105.56 (+1.32%) at 8,121 (YTD: 22.39%; 5YR: 95.8%)
Euro STOXX 50 up +4.62 (+0.13%) at 3,504 (YTD: 16.74%; 5YR: 9.8%)
FTSE 100 up +63.19 (+0.85%) at 7,523 (YTD: 11.82%; 5YR: 12.2%)
CAC 40 up +11.31 (+0.20%) at 5,592 (YTD: 18.20%; 5YR: 24.8%)
DAX up +13.12 (+0.11%) at 12,236 (YTD: 15.88%; 5YR: 28.1%)
Nikkei 225 down -59.74 (-0.27%) at 22,200 (YTD: 10.92%; 5YR: 54.1%)
Hang Seng down -157.59 (-0.53%) at 29,806 (YTD: 15.32%; 5YR: 32.1%)
MSCI Emerging Markets up +0.74 (+0.07%) at 1,090 (YTD: 12.84%; 5YR: 8.5%)

Selected Government Bond Yields
US 10 Year down -0.02 at 2.55 (began the year at 2.68; 5 years ago it was 2.68)
US 2 Year down -0.02 at 2.34 (began the year at 2.49; 5 years ago it was 0.44)
UK 10 Year up +0.03 at 1.23 (began the year at 1.28; 5 years ago it was 2.69)
Germany 10 Year down -0.02 at 0.02 (began the year at 0.24; 5 years ago it was 1.53)
France 10 Year down -0.01 at 0.38 (began the year at 0.70; 5 years ago it was 2.01)
Italy 10 Year down 0.00 at 2.67 (began the year at 2.74; 5 years ago it was 3.12)
Japan 10 Year down -0.01 at -0.05 (began the year at -0.01; 5 years ago it was 0.61)
Barclays EM Basket up +0.01 at 6.02 (began the year at 6.22; 5 years ago it was 5.70)

Selected Currencies
$ strengthened +0.0003 versus € (+0.03%) at 1.1211 ($: YTD: 2.10%; 5YR: 18.9%)
€ strengthened +0.0019 versus £ (-0.16%) at 1.1527 (€: YTD: -3.44%; 5YR: 5.4%)
$ strengthened +0.0024 versus £ (+0.19%) at 1.2923 ($: YTD: -1.39%; 5YR: 23.0%)
¥ weakened -0.0200 versus $ (-0.02%) at 111.8100 (¥: YTD: 1.92%; 5YR: -8.5%)

Selected Commodities
Brent Crude ($/bbl) down -0.22 (-0.30%) at 73.62 (YTD: 38.46%; 5YR: -33.2%)
WTI Crude ($/bbl) up +0.70 (+1.07%) at 66.40 (YTD: 46.22%; 5YR: -34.7%)
Gold ($/ozt) down -2.01 (-0.16%) at 1270.43 (YTD: -0.94%; 5YR: -1.8%)
Copper ($/mt) down -69.00 (-1.07%) at 6407.00 (YTD: 7.41%; 5YR: -3.9%)

Data sourced from Bloomberg as of the close of last trading day.
YTD = Year-to-date return; 5YR = five year return

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros