!css

9 August 2019

09/08/2019

Market Data and Morning Chat

Morning Chat

Well, that’s a welcome turn-up for the books: Markets have been all over the place this week, albeit mostly running through negative territory. Yesterday, though was the turn of positive territory. The global bond yields that had been in steep decline rose. The European indices scampered up (though they’re still down on the week) and the US indices rallied to a positive gain on last Friday’s close. The trigger was little more than the positive export data out of China – up 3.3% year-on-year – and news of a new German government bond issue to provide a war-chest to tackle climate change.

Nickeling worries: Just when the Chinese devalued their currency, the US currency became a bit more expensive – well, coins anyway. A US nickel (which is mostly copper) contains 1.25 grams of nickel; at today’s price that’s ¢2 worth, 12.7% more than Wednesday – the biggest one-day jump in a decade – as nickel prices raced up yesterday. Nickel has gone from around $12,800 per tonne (rough level for most of 2019) to $16,690 – a level it hasn’t touched since late 2014. Why? Indonesia – the world’s second largest producer – is considering bringing forward its ore export ban to ensure refining happens in Indonesia

We could see a host of elections soon: There’s obvious speculation about a possible UK election, especially considering Boris Johnson’s Tories are leading 31.2% to Labour’s 24.6%, Lib-Dem’s 18.8% and Brexit’s 13.0% (average of last 5 polls). On those numbers, ElectoralCalculus.co.uk forecasts a 22-seat Tory majority. Then there’s the Italians; Matteo Salvini, leader of the Lega Nord, effectively collapsed the coalition by voting against their 5Star partners yesterday. Spain’s Socialist leader, Pedro Sanchez, has until September 23rdto form a government or will face a new ballot. Finally, Justin Trudeau has his Liberals back in contention for Canada’s October vote.

Rolls Royce powers back up 6.0% after shares air-pocket takes 14.3% off the price in last week.
KraftHeinz (-6.1%) in the soup as they declare they’re delaying their quarterly earnings release.
Broadcom (+0.3%) hopes to secure Symantec with $10.7billion bid in major diversifying move.
Few hailed Uber’s $5.2billion Q2 loss on capital expenditure spiked, though shares were net up.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +19.20 (+1.57%) at 1,245 (YTD: 14.92%; 5YR: 51.6%)
MSCI AC World Equities (USD) up +142.09 (+1.60%) at 9,006 (YTD: 15.88%; 5YR: 43.9%)
Barclays Global Aggregate Bonds down -1.33 (-0.26%) at 511 (YTD: 6.73%; 5YR: 7.7%)

Selected Equity Indices (Capital returns)
S&P 500 up +54.11 (+1.88%) at 2,938 (YTD: 17.20%; 5YR: 52.1%)
NASDAQ up +176.33 (+2.24%) at 8,039 (YTD: 21.16%; 5YR: 83.9%)
Euro STOXX 50 up +65.39 (+1.98%) at 3,375 (YTD: 12.46%; 5YR: 12.3%)
FTSE 100 up +87.20 (+1.21%) at 7,286 (YTD: 8.29%; 5YR: 10.9%)
CAC up +121.45 (+2.31%) at 5,388 (YTD: 13.89%; 5YR: 29.9%)
DAX up +195.26 (+1.68%) at 11,845 (YTD: 12.18%; 5YR: 31.5%)
Nikkei 225 up +91.47 (+0.44%) at 20,685 (YTD: 3.35%; 5YR: 40.0%)
Hang Seng down -55.34 (-0.21%) at 26,065 (YTD: 0.85%; 5YR: 7.1%)
MSCI Emerging Markets up +11.64 (+1.20%) at 984 (YTD: 1.92%; 5YR: -5.9%)

Selected Government Bond Yields
US 10 Year down -0.02 at 1.70 (began the year at 2.68; 5 years ago it was 2.42)
US 2 Year down -0.02 at 1.59 (began the year at 2.49; 5 years ago it was 0.44)
UK 10 Year up +0.04 at 0.52 (began the year at 1.28; 5 years ago it was 2.46)
Germany 10 Year up +0.05 at -0.51 (began the year at 0.24; 5 years ago it was 1.05)
France 10 Year up +0.04 at -0.25 (began the year at 0.70; 5 years ago it was 1.46)
Italy 10 Year up +0.01 at 1.55 (began the year at 2.74; 5 years ago it was 2.81)
Japan 10 Year down 0.00 at -0.20 (began the year at -0.01; 5 years ago it was 0.50)
Barclays EM Basket down -0.03 at 5.64 (began the year at 6.22; 5 years ago it was 5.44)

Selected Currencies
$ strengthened +0.0012 versus € (+0.11%) at 1.1193 ($: YTD: 2.26%; 5YR: 16.6%)
€ weakened -0.0014 versus £ (+0.13%) at 1.0848 (€: YTD: 2.60%; 5YR: 15.3%)
$ weakened -0.0003 versus £ (-0.02%) at 1.2141 ($: YTD: 4.75%; 5YR: 27.6%)
¥ strengthened +0.3200 versus $ (+0.30%) at 105.9000 (¥: YTD: -3.55%; 5YR: -3.8%)

Selected Commodities
Brent Crude ($/bbl) down -0.21 (-0.37%) at 57.30 (YTD: 7.77%; 5YR: -44.8%)
WTI Crude ($/bbl) up +1.45 (+2.84%) at 52.54 (YTD: 15.70%; 5YR: -46.2%)
Gold ($/ozt) up +3.50 (+0.23%) at 1504.46 (YTD: 17.31%; 5YR: 14.8%)
Copper ($/mt) up +93.00 (+1.63%) at 5798.00 (YTD: -2.80%; 5YR: -17.1%)

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