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26 April 2019

26/04/2019

Morning Chat and Market Data

Morning Chat

No deal!! (no, not Brexit): For months there’s been strong speculation evolving into full-fledged talks to merge Germany’s Deutsche Bank with Commerzbank. The trigger was the weakness of Deutsche Bank – once the big powerhouse of Germany and now struggling from turnaround plan to turnaround plan. The Government was in favour as were the two banks, but unions were not happy about potential job losses. Not to mention, Commerzbank doesn’t really address the weaknesses of Deutsche – the merger would have also needed a big injection of market capital. Interestingly Commerzbank fell nearly 3% yet it appears to have more international suitors.

Joe’s been Biden his time as Bernie Sanders by: The list of Democratic nomination hopefuls now appears complete with a score of candidates. Joe Biden finally declared he would stand. Based on polling, He’s the big name on the ballot and seen as the best chance for the Democrats to oust Trump, but he’s also suffered from bad press over his tactile nature. Moreover, his delay in announcing – possibly to let the negative news die down – has let left-winger Bernie Sanders raise significant funds and close within single digits of Joe’s polling and let other candidates boost their name recognition.

Counting the pennies: US earnings season continues; Amazon – the headline act – reporting late last night UK-time. The company’s move to slower growth / bigger profits continues and booking earnings-per-share of $7.09 easily surpassed the $4.72 expected oh, and Amazon Web Services revenue was up 41%. Guidance wasn’t a best-seller though leaving shares little moved aftermarket. Intel’s shares did move though … down. 1.9% pre-close, 7.1% after as their revenue forecast was $2billion below expectations. UPS fell 8.3% all told as they couldn’t deliver on earnings and 3M fell 12.7% as their earnings hopes were scotched. Somewhat disappointing, but then consider …

UBS banked a better-than-expected profit to see shares up 1.23%.
Ford drove home an upbeat quarter and solid guidance to rise 7.1% in the aftermarket.
Comcast broadcast a strong profit number, albeit with light revenues, to rally 2.6% aftermarket. 
Starbucks got a caffeine kick from US coffee sales with revenues, profits and the shares up.
Barbie-maker Mattel didn’t play around. Sales beat forecasts and shares leapt 12.5% after the close.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -1.25 (-0.10%) at 1,257 (YTD: 16.02%; 5YR: 57.8%)
MSCI AC World Equities (USD) down -12.98 (-0.14%) at 9,011 (YTD: 15.94%; 5YR: 46.9%)
Barclays Global Aggregate Bonds down -0.91 (-0.19%) at 486 (YTD: 1.54%; 5YR: 3.7%)

Selected Equity Indices (Capital returns)
S&P 500 down -1.08 (-0.04%) at 2,926 (YTD: 16.73%; 5YR: 57.0%)
NASDAQ up +16.67 (+0.21%) at 8,119 (YTD: 22.36%; 5YR: 99.2%)
Euro STOXX 50 down -10.71 (-0.31%) at 3,492 (YTD: 16.34%; 5YR: 10.9%)
FTSE 100 down -37.62 (-0.50%) at 7,434 (YTD: 10.49%; 5YR: 11.2%)
CAC 40 down -18.39 (-0.33%) at 5,558 (YTD: 17.48%; 5YR: 25.1%)
DAX down -30.56 (-0.25%) at 12,283 (YTD: 16.32%; 5YR: 30.6%)
Nikkei 225 down -48.85 (-0.22%) at 22,259 (YTD: 11.21%; 5YR: 54.3%)
Hang Seng up +16.58 (+0.06%) at 29,566 (YTD: 14.40%; 5YR: 33.0%)
MSCI Emerging Markets down -7.80 (-0.72%) at 1,077 (YTD: 11.49%; 5YR: 8.4%)

Selected Government Bond Yields
US 10 Year up +0.01 at 2.54 (began the year at 2.69; 5 years ago it was 2.68)
US 2 Year up +0.00 at 2.31 (began the year at 2.50; 5 years ago it was 0.43)
UK 10 Year down -0.01 at 1.16 (began the year at 1.27; 5 years ago it was 2.64)
Germany 10 Year up +0.01 at -0.01 (began the year at 0.24; 5 years ago it was 1.49)
France 10 Year up +0.02 at 0.36 (began the year at 0.71; 5 years ago it was 1.98)
Italy 10 Year up +0.05 at 2.69 (began the year at 2.75; 5 years ago it was 3.12)
Japan 10 Year up +0.01 at -0.04 (began the year at -0.01; 5 years ago it was 0.62)
Barclays EM Basket up +0.03 at 5.29 (began the year at 5.98; 5 years ago it was 5.06)

Selected Currencies
$ weakened -0.0005 versus € (-0.04%) at 1.1142 ($: YTD: 2.71%; 5YR: 19.5%)
€ weakened -0.0005 versus £ (+0.04%) at 1.1587 (€: YTD: -3.94%; 5YR: 4.8%)
$ weakened -0.0008 versus £ (-0.06%) at 1.2910 ($: YTD: -1.29%; 5YR: 23.1%)
¥ weakened -0.1100 versus $ (-0.10%) at 111.6900 (¥: YTD: 1.82%; 5YR: -8.5%)

Selected Commodities
Brent Crude ($/bbl) down -0.19 (-0.26%) at 73.62 (YTD: 38.46%; 5YR: -32.7%)
WTI Crude ($/bbl) down -0.70 (-1.06%) at 65.14 (YTD: 43.45%; 5YR: -35.4%)
Gold ($/ozt) up +4.32 (+0.34%) at 1281.47 (YTD: -0.08%; 5YR: -1.7%)
Copper ($/mt) down -83.00 (-1.29%) at 6365.00 (YTD: 6.71%; 5YR: -5.9%)

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