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12 December 2018

12/12/2018

Market Chat & Market Data

Morning Chat 


What would Dr Doolittle do
: Another pushmi-pullyu day with the S&P index up 1.4% then down, up, then down to close near flat -0.04%.  Good news? China’s moving to cut tariffs on US-made cars by 15 to 40%. More, Chinese Vice Premier Liu told reporters he had positive discussions with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer over trade. The bad? 17 minutes of televised talks between President Trump, Representative Nancy Pelosi and Senate Minority leader Chuck Schumer where Trump said he’d shutter the government unless his wall was funded. More like talk to children than animals.

Zut, c'est regrettable:  President Emmanuel Macron promised much to get the Yellow Vest protestors to stop – about €8-€10 billion in promises.  Without any tax hikes, French Prime Minister Edouard Philippe noted the deficit will be impacted. It could rise to 3.5% breaching the EU’s 3% ceiling. Moreover, France’s debt-to-GDP is 97%, well over the 60% target threshold. The Italians are tweeting with glee as it makes it difficult for Brussels to pursue the excessive deficit procedure against Rome for only breaching the debt limit. Rome can even point to an electoral mandate. No wonder Italy’s 5Stars are Yellow Vest supporters.

Small change: Deutsche Bank shares had a minor boost, rising 0.31% to €7.37 in Frankfurt yesterday and €7.47 today though still trail the European Financials and Banking sectors. Moreover, the gain hardly counters the 34.1% decline from the July 31st high. The move was triggered by a German media report that Berlin may push for a potential merger with Commerzbank to help facilitate cost savings.  Given Deutsche’s $15 billion market capitalisation puts it far down the world banking league table – about 90th, down from 15th –  thanks to money laundering scandals and poor earnings, a merger might just recover some lost 

Market Data 


Selected Global Aggregates (Total returns, unhedged) 
MSCI AC World Equities (Local) up +2.18 (+0.19%) at 1,122 (YTD: -3.85%; 5YR: 48.1%)
MSCI AC World Equities (USD) up +7.76 (+0.10%) at 8,054 (YTD: -4.87%; 5YR: 39.3%)
Barclays Global Aggregate Bonds down -1.14 (-0.24%) at 472 (YTD: -2.63%; 5YR: 3.6%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -0.94 (-0.04%) at 2,637 (YTD: -1.38%; 5YR: 48.5%)
NASDAQ up +11.31 (+0.16%) at 7,032 (YTD: 1.86%; 5YR: 75.9%)
Euro STOXX 50 up +38.33 (+1.27%) at 3,055 (YTD: -12.80%; 5YR: 4.3%)
FTSE 100 up +85.40 (+1.27%) at 6,807 (YTD: -11.46%; 5YR: 5.6%)
CAC 40 up +63.82 (+1.35%) at 4,806 (YTD: -9.53%; 5YR: 18.1%)
DAX up +158.44 (+1.49%) at 10,781 (YTD: -16.54%; 5YR: 19.6%)
Nikkei 225  up +454.73 (+2.15%) at 21,603 (YTD: -5.11%; 5YR: 40.8%)
Hang Seng up +435.06 (+1.69%) at 26,207 (YTD: -12.41%; 5YR: 12.9%)
MSCI Emerging Markets up +2.02 (+0.21%) at 965 (YTD: -16.72%; 5YR: -2.7%)
 
Selected Government Bond Yields
US 10 Year up +0.01 at 2.89 (began the year at 2.41; 5 years ago it was 2.88)
US 2 Year up +0.01 at 2.78 (began the year at 1.88; 5 years ago it was 0.32)
UK 10 Year down -0.01 at 1.19 (began the year at 1.19; 5 years ago it was 2.90)
Germany 10 Year down -0.14 at 0.26 (began the year at 0.42; 5 years ago it was 1.84)
France 10 Year down -0.05 at 0.72 (began the year at 0.78; 5 years ago it was 2.44)
Italy 10 Year down -0.43 at 3.11 (began the year at 2.01; 5 years ago it was 4.10)
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 up +0.01 at 6.36 (began the year at 5.49; 5 years ago it was 5.78)
 
Selected Currencies
€/$ down +0.001 (+0.09%) at 1.133 (YTD: -5.76%; 5YR: -17.6%)
£/€ down +0.001 (-0.12%) at 1.104 (YTD: -1.87%; 5YR: -7.6%)
£/$ down -0.001 (-0.04%) at 1.251 (YTD: -7.49%; 5YR: -23.4%)
$/¥ up -0.18 (+0.16%) at 113.49 (YTD: 0.80%; 5YR: 9.1%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.29 (+0.49%) at 59.83 (YTD: -10.46%; 5YR: -44.8%)
WTI Crude ($/bbl) down +0.65 (+1.27%) at 51.65 (YTD: -14.52%; 5YR: -47.0%)
Gold ($/ozt) up -0.65 (-0.05%) at 1242.56 (YTD: -4.64%; 5YR: 1.4%)
Copper ($/mt) up +79.00 (+1.30%) at 6168.00 (YTD: -14.89%; 5YR: -14.6%)
 
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