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30 April 2019

30/04/2019

Morning Chat and Market Data

Morning Chat

Up, down, flying around: The FTSE100 ultimately closed +0.17%, but was all over the place yesterday – down 0.25% & up 0.35%. Initially, trading up, but the supporting news was thin. Spain’s Socialist’s win at the polls and travel stocks like TUI gliding up 2.3% on the sliding oil price. Yet, the oil price kept slipping, thanks to Trump’s tweets, and the oil majors lost their footing. However, the oil market shrugged off Trump’s remarks while the US Fed’s preferred inflation measure – Personal Income – came in at 0.1% (versus 0.3% expected) reducing US Fed hike expectations and lifting the UK index.

Gaining purchase: The S&P500 closed at 2,943.03 – a new record close – after hitting 2,949.34 – a new intra-day high. It wasn’t a barnstormer day, only a slim 0.11% gain, but enough. The big push came as the US Bureau of Economic Analysis announced better-than-expected personal consumption spending – which accounts for two thirds of the economy – increased 0.9% in March, the biggest single month spending increase in 9½ years. Spending increases were broad-based, though healthcare and cars & car parts were clear winners. It points to a still strong consumer, but with a below-expectation 0.1% increase in personal income, a non-inflationary one.

Alphabet gives more Y for the market: If consumer news was so good, why didn’t the S&P move more? Well, a google of reasons. Alphabet, Google’s parent didn’t have the numbers. Sales were $29.5billion missed the $30.0billion expected. Ad revenues, up 15% year-on-year, were slower than expected and last year’s 24%. Seems many are going straight to Amazon for shopping. Moreover, they have had to pay a not insignificant fine to the EU and ramp up spending for YouTube moderating and cloud development. All told, the numbers – which came out after the close – have knocked the aftermarket price by 7.3%

Japanese Emperor Akihito begins his abdication today stepping down in favour of his son.
China’s Manufacturing PMI at 50.1 – lower than predicted – starting markets on a negative tone
US Treasury Secretary Steve Mnuchin notes US-China trade talks “into the final laps”.
No way, eh! Canadian weather thwarted sales at Tim Horton’s searing Burger King earnings.
Spotify shares slightly off-key despite pretty much in-tune earnings

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +2.00 (+0.16%) at 1,263 (YTD: 16.56%; 5YR: 57.2%)
MSCI AC World Equities (USD) up +9.20 (+0.10%) at 9,056 (YTD: 16.53%; 5YR: 46.1%)
Barclays Global Aggregate Bonds down -0.50 (-0.10%) at 487 (YTD: 1.65%; 5YR: 3.6%)

Selected Equity Indices (Capital returns)
S&P 500 up +3.15 (+0.11%) at 2,943 (YTD: 17.40%; 5YR: 56.2%)
NASDAQ up +15.46 (+0.19%) at 8,162 (YTD: 23.01%; 5YR: 98.4%)
Euro STOXX 50 up +1.53 (+0.04%) at 3,502 (YTD: 16.68%; 5YR: 9.5%)
FTSE 100 up +12.47 (+0.17%) at 7,441 (YTD: 10.59%; 5YR: 9.7%)
CAC 40 up +11.62 (+0.21%) at 5,581 (YTD: 17.97%; 5YR: 24.4%)
DAX up +12.84 (+0.10%) at 12,328 (YTD: 16.75%; 5YR: 28.4%)
Nikkei 225 down -48.85 (-0.22%) at 22,259 (YTD: 11.21%; 5YR: 55.8%)
Hang Seng down -171.26 (-0.57%) at 29,722 (YTD: 15.00%; 5YR: 34.3%)
MSCI Emerging Markets up +4.85 (+0.45%) at 1,083 (YTD: 12.13%; 5YR: 8.8%)

Selected Government Bond Yields
US 10 Year down -0.02 at 2.51 (began the year at 2.68; 5 years ago it was 2.65)
US 2 Year down -0.02 at 2.27 (began the year at 2.49; 5 years ago it was 0.41)
UK 10 Year up +0.02 at 1.16 (began the year at 1.28; 5 years ago it was 2.66)
Germany 10 Year down -0.01 at -0.01 (began the year at 0.24; 5 years ago it was 1.47)
France 10 Year down -0.01 at 0.36 (began the year at 0.70; 5 years ago it was 1.95)
Italy 10 Year up +0.01 at 2.59 (began the year at 2.74; 5 years ago it was 3.07)
Japan 10 Year down -0.01 at -0.05 (began the year at -0.01; 5 years ago it was 0.62)
Barclays EM Basket up +0.01 at 6.02 (began the year at 6.22; 5 years ago it was 5.67)

Selected Currencies
$ strengthened +0.0001 versus € (+0.01%) at 1.1180 ($: YTD: 2.38%; 5YR: 19.4%)
€ weakened -0.0003 versus £ (+0.03%) at 1.1570 (€: YTD: -3.80%; 5YR: 5.2%)
$ weakened -0.0001 versus £ (-0.01%) at 1.2934 ($: YTD: -1.48%; 5YR: 23.3%)
¥ strengthened +0.4200 versus $ (+0.38%) at 111.3800 (¥: YTD: 1.54%; 5YR: -8.3%)

Selected Commodities
Brent Crude ($/bbl) down -0.10 (-0.14%) at 71.50 (YTD: 34.47%; 5YR: -34.2%)
WTI Crude ($/bbl) up +0.20 (+0.32%) at 63.50 (YTD: 39.84%; 5YR: -37.3%)
Gold ($/ozt) up +3.12 (+0.24%) at 1282.97 (YTD: 0.04%; 5YR: -0.7%)
Copper ($/mt) down -4.00 (-0.06%) at 6396.00 (YTD: 7.23%; 5YR: -4.8%)

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