!css

10 December 2018

10/12/2018

Morning Chat & Market Data

Morning Chat

 
A dip in the rollercoaster:  Friday the S&P 500 rolled back 2.33%.  Based on the numbers, a likely strong factor was the November US non-farms employment data showing 155,000 jobs versus 198,000 expected.  The lower number further confirms Thursday’s slower pace ADP employment data.  Yet over the last year bar a couple anomalous months, US employment was running around 150-180,000 jobs per month so it’s less a surprise.  However, given many weaker stocks were high China sales names, the tariffs war emerges as another key factor and not helped by Reuters news that the Chinese were behind the Marriott hack. 

Trump’s going to be annoyed: US President Donald Trump initiated tariffs against China to tackle the US trade deficit.  So he’s unlikely to look kindly on news the US-China November trade deficit widened to 35.55 billion dollars - a new record – on exports to the US rising 9.8%.  At 44.74 billion dollars, the Chinese trade surplus expanded to its largest since last December.  Chinese exports rose 5.4% - about half as strong as expected – but aluminium shipments were up 41.1%. What helped the deficit was imports being up only 3% - quarter the expected pace – on a decline in copper imports.

Yellow is the new sans-culottes: Despite President Emmanuel Macron’s cancellation of the planned January diesel fuel tax hike, protesters again took to the streets of France this weekend. Their focus shifted to the President himself with calls for him to resign as they suffer worsening living standards and growing inequality.  A YouGov poll put his approval rating at only 18% - worse than President Hollande at the same period in his tenure - showing how far his support has fallen. French Revolutionary Jean-Paul Marat wrote “God has always been hard on the poor”, for the Yellow Vest protestors it’s Macron.

Market Data


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -12.96 (-1.14%) at 1,127 (YTD: -3.50%; 5YR: 46.6%)
MSCI AC World Equities (USD) down -104.60 (-1.28%) at 8,098 (YTD: -4.35%; 5YR: 37.9%)
Barclays Global Aggregate Bonds up +0.18 (+0.04%) at 474 (YTD: -2.31%; 5YR: 3.6%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -62.87 (-2.33%) at 2,633 (YTD: -1.52%; 5YR: 46.1%)
NASDAQ down -219.01 (-3.05%) at 6,969 (YTD: 0.95%; 5YR: 71.6%)
Euro STOXX 50 up +12.59 (+0.41%) at 3,059 (YTD: -12.71%; 5YR: 3.3%)
FTSE 100 up +74.06 (+1.10%) at 6,778 (YTD: -11.83%; 5YR: 3.9%)
CAC 40 up +32.67 (+0.68%) at 4,813 (YTD: -9.40%; 5YR: 17.6%)
DAX down -22.89 (-0.21%) at 10,788 (YTD: -16.49%; 5YR: 18.4%)
Nikkei 225  down -459.18 (-2.12%) at 21,220 (YTD: -6.79%; 5YR: 35.9%)
Hang Seng down -312.01 (-1.20%) at 25,752 (YTD: -13.93%; 5YR: 8.5%)
MSCI Emerging Markets up +2.44 (+0.25%) at 981 (YTD: -15.29%; 5YR: -3.1%)

Selected Government Bond Yields
US 10 Year up +0.01 at 2.85 (began the year at 2.41; 5 years ago it was 2.80)
US 2 Year up +0.00 at 2.71 (began the year at 1.88; 5 years ago it was 0.30)
UK 10 Year up +0.02 at 1.27 (began the year at 1.19; 5 years ago it was 2.88)
Germany 10 Year down -0.16 at 0.24 (began the year at 0.42; 5 years ago it was 1.83)
France 10 Year down -0.07 at 0.70 (began the year at 0.78; 5 years ago it was 2.43)
Italy 10 Year down -0.38 at 3.16 (began the year at 2.01; 5 years ago it was 4.06)
Japan 10 Year down -0.09 at 0.04 (began the year at 0.04; 5 years ago it was 0.66)
Barclays EM Basket up +0.03 at 6.36 (began the year at 5.49; 5 years ago it was 5.75)
 
Selected Currencies
€/$ down +0.004 (+0.31%) at 1.143 (YTD: -4.92%; 5YR: -17.0%)
£/€ down +0.003 (-0.31%) at 1.114 (YTD: -1.01%; 5YR: -7.2%)
£/$ down 0.000 (0.00%) at 1.273 (YTD: -5.86%; 5YR: -22.5%)
$/¥ down +0.13 (-0.12%) at 112.60 (YTD: 0.02%; 5YR: 8.7%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.58 (+0.96%) at 60.85 (YTD: -8.93%; 5YR: -44.3%)
WTI Crude ($/bbl) down +1.12 (+2.18%) at 52.61 (YTD: -12.93%; 5YR: -46.1%)
Gold ($/ozt) up -0.92 (-0.07%) at 1247.43 (YTD: -4.27%; 5YR: -1.2%)
Copper ($/mt) up +75.00 (+1.24%) at 6145.00 (YTD: -15.21%; 5YR: -13.7%)

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