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11 December 2018

11/12/2018

Market Chat & Market Data

Morning Chat

Now you see it, now you don’t: At 3:30 pm yesterday UK Prime Minister made today’s Parliamentary vote on her Brexit deal disappear. She also made 0.83% slip off the FTSE 100 and ¢1.6 vanish off the sterling-dollar exchange rate as it dropped to an 20-month low of 1.2562.  She delayed the vote recognising the vote would be lost.  Instead, she will go back to Brussels to seek “reassurances” as European Council President Donald Tusk reiterated that the EU would not renegotiate. They will however look at how they might facilitate ratification.  One wonders what could change so many minds?

The Rollercoaster ratchets up: After selling off nearly 1.5% during the trading day over the Brexit situation, the index climbed back to close at +0.23%.  Gains came as we twisted through a still robust JOLTS or Job Openings and Labor Turnover Survey, showing job holders continue to actively quit to move to better employment and that 7.079 million job openings remain – more than the 5.975 million unemployed.  Another cart on the tracks of recovery was Apple’s rebound after noting China’s Qualcomm ruling would only impact phones using the old operating system or about 10-15% of China sales, not all sales.

A recipe for humble pie: Peppered by four weekends of Yellow Vest disruption, a contrite President Emmanuel Macron conceded, noting the protestors reasons were “in may ways legitimate”.  His ingredients were an increase in the minimum wage of €100 per month, the cancelling of a pensioner surcharge & overtime tax and encouraging employers to give a tax-free year-end bonus.  He was stirred to act because of the movement’s significant economic impact.  The Banque De France estimated the heat of the economy will be dialled back from 0.4% to 0.2%, much cooler than the 0.8% needed to hit the government’s target.

Market Data 


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -6.27 (-0.56%) at 1,120 (YTD: -4.04%; 5YR: 47.0%)
MSCI AC World Equities (USD) down -51.05 (-0.63%) at 8,047 (YTD: -4.96%; 5YR: 38.2%)
Barclays Global Aggregate Bonds down -0.38 (-0.08%) at 473 (YTD: -2.39%; 5YR: 3.5%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +4.64 (+0.18%) at 2,638 (YTD: -1.34%; 5YR: 48.0%)
NASDAQ up +51.27 (+0.74%) at 7,021 (YTD: 1.70%; 5YR: 75.3%)
Euro STOXX 50 down -41.54 (-1.36%) at 3,017 (YTD: -13.90%; 5YR: 2.4%)
FTSE 100 down -56.57 (-0.83%) at 6,722 (YTD: -12.57%; 5YR: 3.3%)
CAC 40 down -70.75 (-1.47%) at 4,742 (YTD: -10.73%; 5YR: 16.0%) 
DAX down -166.02 (-1.54%) at 10,622 (YTD: -17.77%; 5YR: 17.0%)
Nikkei 225  down -71.48 (-0.34%) at 21,148 (YTD: -7.10%; 5YR: 36.3%)
Hang Seng up +38.29 (+0.15%) at 25,791 (YTD: -13.80%; 5YR: 10.5%)
MSCI Emerging Markets down -18.58 (-1.89%) at 963 (YTD: -16.89%; 5YR: -4.0%) 
 
Selected Government Bond Yields
US 10 Year up +0.01 at 2.87 (began the year at 2.41; 5 years ago it was 2.85)
US 2 Year up +0.01 at 2.74 (began the year at 1.88; 5 years ago it was 0.31)
UK 10 Year down -0.07 at 1.20 (began the year at 1.19; 5 years ago it was 2.86)
Germany 10 Year down -0.15 at 0.26 (began the year at 0.42; 5 years ago it was 1.81)
France 10 Year down -0.06 at 0.71 (began the year at 0.78; 5 years ago it was 2.41)
Italy 10 Year down -0.43 at 3.11 (began the year at 2.01; 5 years ago it was 4.06)
Japan 10 Year down -0.08 at 0.04 (began the year at 0.04; 5 years ago it was 0.65)
Barclays EM Basket down 0.00 at 6.36 (began the year at 5.49; 5 years ago it was 5.76)
 
Selected Currencies
€/$ down +0.001 (+0.12%) at 1.137 (YTD: -5.39%; 5YR: -17.6%)
£/€ down +0.001 (-0.09%) at 1.105 (YTD: -1.80%; 5YR: -7.5%)
£/$ down +0.001 (+0.06%) at 1.257 (YTD: -7.05%; 5YR: -23.3%)
$/¥ up 0.00 (0.00%) at 113.12 (YTD: 0.48%; 5YR: 9.5%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.14 (+0.24%) at 58.92 (YTD: -11.82%; 5YR: -46.1%)
WTI Crude ($/bbl) down -1.61 (-3.06%) at 51.00 (YTD: -15.59%; 5YR: -48.2%)
Gold ($/ozt) up +3.13 (+0.25%) at 1247.59 (YTD: -4.26%; 5YR: -0.4%)
Copper ($/mt) down -56.00 (-0.91%) at 6089.00 (YTD: -15.98%; 5YR: -14.9%)
  
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