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6 August 2019

06/08/2019

Market Data and Morning Chat

Morning Chat

Hey, Donald, duck – the Chinese have chucked the toys back: Last week, US President Donald Trump, exasperated by the trade talks, announced new 10% tariffs on $300billion of Chinese goods. Equity markets sold down on this ratcheting up of the tensions. Yesterday though saw China’s retaliatory moves as they allowed the yuan to drop below 7 to the US dollar and ceased new agri-product purchases. The equity markets were not happy, posting their worst one-day decline of 2019 falling 2-3% depending on index with many of the big international tech names like Apple, IBM and Intel falling 4% or more.

Bragging rights go to Italy and the UK: Services constitute two-thirds to three-quarters of the major European economies and nearly four-fifths of the British economy, so it’s no wonder the Services Purchasing Manager Surveys are so influential. Monday saw the release of the July survey data from Markit and the reading was not too bad. Ok, the data for Germany, France and Spain was lower than the prior month, but not by much. Moreover, the results all remained over the 50 expansion mark and France beat the estimates. Meanwhile, the UK and Italy both improved and scored better than expected.

Not quite cricket: Pakistan and India have fought 59 test matches, but they have also fought over Jammu and Kashmir, the only Muslim-majority state in India. When India and Pakistan were partitioned, Kashmir, angling for independence, opted to join India. Their rights in the union protected by Article 370 of the 1950 Indian Constitution. However, thanks to his strong majority in the Lok Sabha (lower house of commons), Indian PM Narendra Modi and his nationalist party batted aside Article 370, citing a desire to promote integration and thwart terrorism. Pakistan PM Imran Khan said the illegal act harms Pakistani-Indian relations.

China this morning acted to limit the Yuan decline after being called out for currency manipulation
German factory orders for June something to make of rising 2.5% when the forecast was for +0.5%
HSBC announces 4,000 job cuts starting with the CEO as shares down 1.3% in Hong Kong trading

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -32.15 (-2.57%) at 1,217 (YTD: 12.36%; 5YR: 47.8%)
MSCI AC World Equities (USD) down -220.22 (-2.44%) at 8,793 (YTD: 13.14%; 5YR: 40.3%)
Barclays Global Aggregate Bonds up +2.89 (+0.57%) at 510 (YTD: 6.51%; 5YR: 7.9%)

Selected Equity Indices (Capital returns)
S&P 500 down -87.31 (-2.98%) at 2,845 (YTD: 13.48%; 5YR: 48.1%)
NASDAQ down -278.03 (-3.47%) at 7,726 (YTD: 16.44%; 5YR: 77.4%)
Euro STOXX 50 down -65.19 (-1.93%) at 3,311 (YTD: 10.31%; 5YR: 8.5%)
FTSE 100 down -183.21 (-2.47%) at 7,224 (YTD: 7.37%; 5YR: 8.9%)
CAC down -117.45 (-2.19%) at 5,242 (YTD: 10.80%; 5YR: 24.6%)
DAX down -213.93 (-1.80%) at 11,659 (YTD: 10.41%; 5YR: 27.7%)
Nikkei 225 down -134.98 (-0.65%) at 20,585 (YTD: 2.85%; 5YR: 35.8%)
Hang Seng down -266.72 (-1.02%) at 25,885 (YTD: 0.15%; 5YR: 5.3%)
MSCI Emerging Markets down -30.76 (-3.06%) at 973 (YTD: 0.75%; 5YR: -7.9%)

Selected Government Bond Yields
US 10 Year up +0.03 at 1.74 (began the year at 2.68; 5 years ago it was 2.47)
US 2 Year up +0.01 at 1.58 (began the year at 2.49; 5 years ago it was 0.46)
UK 10 Year down -0.04 at 0.51 (began the year at 1.28; 5 years ago it was 2.51)
Germany 10 Year up +0.00 at -0.51 (began the year at 0.24; 5 years ago it was 1.10)
France 10 Year down -0.01 at -0.25 (began the year at 0.70; 5 years ago it was 1.52)
Italy 10 Year down -0.02 at 1.55 (began the year at 2.74; 5 years ago it was 2.81)
Japan 10 Year unchanged at -0.20 (began the year at -0.01; 5 years ago it was 0.52)
Barclays EM Basket down -0.03 at 5.74 (began the year at 6.22; 5 years ago it was 5.48)

Selected Currencies
$ strengthened +0.0005 versus € (+0.04%) at 1.1206 ($: YTD: 2.15%; 5YR: 16.2%)
€ weakened -0.0014 versus £ (+0.13%) at 1.0857 (€: YTD: 2.51%; 5YR: 16.1%)
$ weakened -0.0011 versus £ (-0.09%) at 1.2166 ($: YTD: 4.55%; 5YR: 27.8%)
¥ weakened -0.5300 versus $ (-0.50%) at 106.4300 (¥: YTD: -3.03%; 5YR: -4.0%)

Selected Commodities
Brent Crude ($/bbl) up +0.26 (+0.43%) at 60.36 (YTD: 13.52%; 5YR: -41.8%)
WTI Crude ($/bbl) down -0.97 (-1.74%) at 54.69 (YTD: 20.44%; 5YR: -43.8%)
Gold ($/ozt) down -0.69 (-0.05%) at 1463.09 (YTD: 14.09%; 5YR: 12.0%)
Copper ($/mt) down -44.50 (-0.78%) at 5685.00 (YTD: -4.69%; 5YR: -19.4%)

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