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18 December 2018

18/12/2018

Morning Chat & Market Data

Morning Chat


After Slaughtered Online Sales: London-listed online retailer ASOS closed down 37.6% yesterday after hemming back its 2019 guidance from 20-25% to 15%.  Their trading update led to other online retailers getting a good beating; Brown Group was tanned 16.5%, BooHoo.com sobbed over a 13.7% tumble and German shoe and clothing retailer Zalando was kicked 11.4%.  Although ASOS noted September and October were ok, November was “significantly behind expectations” thanks to substantial Black Friday discounting in the US and challenging conditions in Germany & France. What it also reveals is that online retailers aren’t immune to the woes of the brick & mortar names.

At least more banks for your buck: ASOS set the day’s demeanour with markets all red.  The weak retail outlook before Christmas, coupled with the looming rate decision from the US Federal Reserve on Wednesday left little cheer.  But there were positives.  UK miners dug up a 0.93% gain on the coat-tails of BHP’s shale assets sale (BHP was up 2.67%). US banks deposited a +0.36% move on lower rate expectations – enough to put financials positive overall. Meanwhile in Europe, Telecoms were also positive 0.27% thanks to Deutsche Telekom (+0.73%) hearing they were partially successful in their EU fines appeal.

Closed for the holidays? What President Donald Trump wants for Christmas is $5 billion in funding for his wall. Democrats are steadfastly playing the Grinch, and refusing to agree, thus a shutdown looks possible. The problem is Congress needs to pass a spending measure for various Federal departments by December 21st or else they close. Employees of the Departments of State, Justice, the Interior, Housing and Homeland Security will find themselves without pay although many including Customs officials and federal law enforcement will be required to work regardless. Best advice? If you are in the US over the holidays, behave.

Market Data

Selected Global Aggregates (Total returns, unhedged)

MSCI AC World Equities (Local) down -15.94 (-1.43%) at 1,102 (YTD: -5.62%; 5YR: 43.4%)
MSCI AC World Equities (USD) down -115.93 (-1.45%) at 7,890 (YTD: -6.80%; 5YR: 34.4%)
Barclays Global Aggregate Bonds up +1.23 (+0.26%) at 473 (YTD: -2.37%; 5YR: 3.8%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -54.01 (-2.08%) at 2,546 (YTD: -4.78%; 5YR: 40.6%)
NASDAQ down -156.93 (-2.27%) at 6,754 (YTD: -2.17%; 5YR: 65.9%)
Euro STOXX 50 down -28.95 (-0.94%) at 3,064 (YTD: -12.57%; 5YR: 3.0%)
FTSE 100 down -71.93 (-1.05%) at 6,773 (YTD: -11.90%; 5YR: 4.3%)
CAC 40 down -53.83 (-1.11%) at 4,800 (YTD: -9.65%; 5YR: 16.8%)
DAX down -93.57 (-0.86%) at 10,772 (YTD: -16.61%; 5YR: 17.3%)
Nikkei 225  down -391.43 (-1.82%) at 21,115 (YTD: -7.25%; 5YR: 35.5%)
Hang Seng down -291.44 (-1.12%) at 25,797 (YTD: -13.78%; 5YR: 11.5%)
MSCI Emerging Markets down -4.08 (-0.42%) at 968 (YTD: -16.46%; 5YR: -2.5%)
 
Selected Government Bond Yields
US 10 Year down -0.02 at 2.84 (began the year at 2.41; 5 years ago it was 2.89)
US 2 Year down -0.02 at 2.67 (began the year at 1.88; 5 years ago it was 0.33)
UK 10 Year up +0.03 at 1.27 (began the year at 1.19; 5 years ago it was 2.92)
Germany 10 Year down -0.14 at 0.26 (began the year at 0.42; 5 years ago it was 1.85)
France 10 Year down -0.05 at 0.72 (began the year at 0.78; 5 years ago it was 2.46)
Italy 10 Year down -0.43 at 3.11 (began the year at 2.01; 5 years ago it was 4.07)
Japan 10 Year down -0.08 at 0.04 (began the year at 0.04; 5 years ago it was 0.66)
Barclays EM Basket down -0.01 at 6.31 (began the year at 5.49; 5 years ago it was 5.78)
 
Selected Currencies
€/$ down -0.001 (-0.05%) at 1.135 (YTD: -5.63%; 5YR: -17.5%)
£/€ up -0.002 (+0.16%) at 1.113 (YTD: -1.06%; 5YR: -7.0%)
£/$ down +0.001 (+0.11%) at 1.263 (YTD: -6.62%; 5YR: -22.9%)
$/¥ down +0.22 (-0.20%) at 112.58 (YTD: 0.00%; 5YR: 8.4%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.10 (-0.17%) at 57.73 (YTD: -13.60%; 5YR: -47.2%)
WTI Crude ($/bbl) down -1.32 (-2.58%) at 49.88 (YTD: -17.44%; 5YR: -48.7%)
Gold ($/ozt) up +1.21 (+0.10%) at 1247.11 (YTD: -4.29%; 5YR: 2.3%)
Copper ($/mt) down -8.50 (-0.14%) at 6123.00 (YTD: -15.51%; 5YR: -15.9%)
 
Data sourced from Bloomberg as of the close of last trading day.
YTD = Year-to-date return; 5YR = five year return

SOURCES: BBC; The New York Times; FactSet; Al Jazeera; Financial Times; The Economist; Reuters; CNN; Wall Street Journal; CNBC; Google Finance; Seeking Alpha; The Idea Farm; Bloomberg, Twitter; Wikipedia; Investopedia; The Guardian; The Times of London; Google News; Numerous academic sources and journals; Trade bodies; Government institutions (e.g The Bank of England, The Federal Reserve).

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros