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6 December 2018

06/12/2018

Morning Chat & Market Data

Morning Chat 

A slow boat to China: After Wall Street tumbled Tuesday over sketchy details of the US-China trade deal, Europe and Asia were expected to follow.  They did, but it was not a rout, with the DAX -1.19%, the CAC -1.36% and the FTSE 100 -1.44%; S&P futures had pointed to a positive US turn today with China’s Commerce Ministry finally breaking their silence (their delay, according to Trump, due to the long journey home). However, Canada’s arrest of the Huawei’s CFO Wanzhou Meng at the US’s request for breaching Iran sanctions has outraged China turning the day – and futures – sour.

 Okay, so no change, eh? Although the US closed for a day of mourning, one North American market beavered away as the Toronto stock exchange closed up 0.79%, 3.13% up from the October 29th low. The rally was a positive reaction to China’s comments and the Bank of Canada’s (BOC) decision keeping the benchmark rate static at 1.75%.  The BOC noted – in contrast to the US Fed – future hikes are likely as “inflation has been evolving as expected” consistent with an “economy … operating close to capacity” and with business investment “expected to strengthen”. Nothing to be sorry about there.

Top Trumps: Four ex-Presidents and President Donald Trump attended the memorial for President George Bush sr. yesterday – who was your favourite when in office? After 685 days (that long!), Trump carries a surprisingly steady 42.4% approval rating. But is he Top Trump? At the same point in their tenure, Obama was 45.5%, George W was 62.2% (drifting down from a post-9/11 high), Clinton 43.6%, Carter 50.2% with Ronald Reagan, Gerald Ford and Truman pretty similar too. Moreover, they all had a lower approval than Trump’s at some point but 5 had a second term! Could be 2237 days to go.

Market Data 


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -4.40 (-0.38%) at 1,152 (YTD: -1.33%; 5YR: 49.9%)
MSCI AC World Equities (USD) down -33.98 (-0.41%) at 8,274 (YTD: -2.27%; 5YR: 41.1%)
Barclays Global Aggregate Bonds down -0.40 (-0.08%) at 472 (YTD: -2.67%; 5YR: 3.7%)
 
Selected Equity Indices
S&P 500 down -90.31 (-3.24%) at 2,700 (YTD: 0.99%; 5YR: 51.3%)
NASDAQ down -283.09 (-3.80%) at 7,158 (YTD: 3.69%; 5YR: 77.5%)
Euro STOXX 50 down -38.98 (-1.22%) at 3,150 (YTD: -10.09%; 5YR: 5.7%)
FTSE 100 down -100.92 (-1.44%) at 6,922 (YTD: -9.96%; 5YR: 5.6%)
CAC 40 down -68.29 (-1.36%) at 4,944 (YTD: -6.93%; 5YR: 19.7%)
DAX down -135.08 (-1.19%) at 11,200 (YTD: -13.29%; 5YR: 22.1%)
Nikkei 225  down -417.71 (-1.91%) at 21,502 (YTD: -5.55%; 5YR: 40.5%)
Hang Seng down -692.29 (-2.58%) at 26,127 (YTD: -12.67%; 5YR: 10.0%)
MSCI Emerging Markets down -12.34 (-1.22%) at 1,002 (YTD: -13.51%; 5YR: 0.0%)
 
Selected Government Bond Yields
US 10 Year down -0.01 at 2.91 (began the year at 2.41; 5 years ago it was 2.86)
US 2 Year down -0.01 at 2.78 (began the year at 1.88; 5 years ago it was 0.30)
UK 10 Year up +0.03 at 1.32 (began the year at 1.19; 5 years ago it was 2.90)
Germany 10 Year down -0.14 at 0.27 (began the year at 0.42; 5 years ago it was 1.84)
France 10 Year down -0.10 at 0.67 (began the year at 0.78; 5 years ago it was 2.44)
Italy 10 Year down -0.49 at 3.05 (began the year at 2.01; 5 years ago it was 4.17)
Japan 10 Year down -0.07 at 0.06 (began the year at 0.04; 5 years ago it was 0.66)
Barclays EM Basket up +0.01 at 6.34 (began the year at 5.49; 5 years ago it was 5.81)
 
Selected Currencies
€/$ down -0.002 (-0.16%) at 1.133 (YTD: -5.74%; 5YR: -17.3%)
£/€ down +0.002 (-0.14%) at 1.122 (YTD: -0.29%; 5YR: -6.4%)
£/$ down -0.004 (-0.30%) at 1.271 (YTD: -6.01%; 5YR: -22.2%)
$/¥ up +0.08 (-0.07%) at 113.07 (YTD: 0.43%; 5YR: 9.0%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.16 (-0.26%) at 60.42 (YTD: -9.58%; 5YR: -45.9%)
WTI Crude ($/bbl) down -0.36 (-0.68%) at 52.89 (YTD: -12.46%; 5YR: -45.7%)
Gold ($/ozt) up -1.84 (-0.15%) at 1235.42 (YTD: -5.19%; 5YR: 0.5%)
Copper ($/mt) down -34.00 (-0.55%) at 6175.00 (YTD: -14.79%; 5YR: -12.6%)
 
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