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8 February 2019

08/02/2019

Morning Chat and Market Data

Morning Chat

Well, we still could get a positive week: Hopefully that doesn’t jinx it. The FTSE 100 has a decent 70 point buffer, but if the S&P 500 closes above 2706.53 – where it closed last night – it will rack up another positive week.  Why wouldn’t it? The European Commission reduced their 2019 EU and German GDP forecasts from 1.9% and 1.8% to 1.3% and 1.1% respectively while the Bank of England reduced their UK growth forecast from 1.7% to 1.2%. Moreover, markets didn't like reports of slow-going US-China trade. New day, let’s hope it’s a good one, though the futures are down.

Totally oil right: Given European markets had a rough day yesterday with the French CAC index off 1.84%, French oil major Total falling 1.51% on results is not so bad.  When considering the 4% plus share price gains by the likes of Exxon and BP after they reported though, Total bosses could rightly feel miffed.  Aided by higher oil prices (the annual average oil price was 31% higher in 2018) earnings were notably ahead of estimates, Q4 cash flow was up 24% and upstream volumes again came in at record levels.  Management also increased the dividend. All pretty slick really.

No right to Rome: Aside from Total, it wasn’t the best day for France.  Publicis shares dropped 14.8% on weak revenues which considering they added more business than any other global ad agency was painful (Omnicom and WPP also fell). The banks had a bad turn and so did auto firms like Valeo. Oh, and France recalled their ambassador from Italy over “repeated, baseless attacks” by the Italian government parties over the Yellow Vest dispute.  The French foreign ministry stated the actions of Italy’s populist parties was “unprecedented since the war”. Didn’t think you were supposed to mention the war.

Market Data 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -10.16 (-0.86%) at 1,166 (YTD: 7.60%; 5YR: 51.8%)
MSCI AC World Equities (USD) down -82.58 (-0.98%) at 8,375 (YTD: 7.76%; 5YR: 42.5%)
Barclays Global Aggregate Bonds up +0.24 (+0.05%) at 484 (YTD: 1.01%; 5YR: 5.0%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -25.56 (-0.94%) at 2,706 (YTD: 7.95%; 5YR: 50.6%)
NASDAQ down -86.93 (-1.18%) at 7,288 (YTD: 9.84%; 5YR: 76.7%)
Euro STOXX 50 down -61.99 (-1.93%) at 3,151 (YTD: 4.98%; 5YR: 3.7%)
FTSE 100 down -79.51 (-1.11%) at 7,094 (YTD: 5.43%; 5YR: 7.9%)
CAC 40 down -93.49 (-1.84%) at 4,986 (YTD: 5.39%; 5YR: 17.9%)
DAX down -302.70 (-2.67%) at 11,022 (YTD: 4.39%; 5YR: 18.5%)
Nikkei 225  down -418.11 (-2.01%) at 20,333 (YTD: 1.59%; 5YR: 40.6%)
Hang Seng down -28.26 (-0.10%) at 27,962 (YTD: 8.19%; 5YR: 31.5%)
MSCI Emerging Markets down -6.49 (-0.62%) at 1,042 (YTD: 7.89%; 5YR: 11.2%)
  
Selected Government Bond Yields
US 10 Year down -0.01 at 2.65 (began the year at 2.68; 5 years ago it was 2.68)
US 2 Year down 0.00 at 2.48 (began the year at 2.49; 5 years ago it was 0.30)
UK 10 Year down -0.04 at 1.18 (began the year at 1.28; 5 years ago it was 2.71)
Germany 10 Year down -0.01 at 0.11 (began the year at 0.24; 5 years ago it was 1.66)
France 10 Year down 0.00 at 0.55 (began the year at 0.70; 5 years ago it was 2.24)
Italy 10 Year up +0.00 at 2.95 (began the year at 2.74; 5 years ago it was 3.69)
Japan 10 Year down -0.02 at -0.03 (began the year at -0.01; 5 years ago it was 0.62)
Barclays EM Basket down -0.01 at 6.01 (began the year at 6.22; 5 years ago it was 5.88)
 
Selected Currencies
$ strengthened +0.0013 versus € (+0.11%) at 1.1336 ($: YTD: 1.01%; 5YR: 16.8%)
€ weakened -0.0002 versus £ (+0.02%) at 1.1423 (€: YTD: -2.57%; 5YR: 5.4%)
$ strengthened +0.0014 versus £ (+0.11%) at 1.2950 ($: YTD: -1.60%; 5YR: 21.0%)
¥ strengthened +0.0500 versus $ (+0.05%) at 109.7400 (¥: YTD: 0.07%; 5YR: -6.8%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.54 (-0.88%) at 61.01 (YTD: 14.75%; 5YR: -44.1%)
WTI Crude ($/bbl) down -1.37 (-2.54%) at 52.64 (YTD: 15.92%; 5YR: -47.3%)
Gold ($/ozt) down -1.64 (-0.13%) at 1308.45 (YTD: 2.03%; 5YR: 3.2%)
Copper ($/mt) down -33.00 (-0.53%) at 6246.00 (YTD: 4.71%; 5YR: -12.5%)
 
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; Bloomberg; Al Jazeera; Financial Times; The Economist; Reuters; CNN; Wall Street Journal; CNBC; Google Finance; Seeking Alpha; The Idea Farm; Politico, EurActiv, 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