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4 February 2019

04/02/2019

Morning Chat and Market Data

Morning Chat


What have we got to look forward to: Last week US equities racked up a sixth consecutive positive week (S&P +1.57%, Nasdaq +2.51%) which it hasn’t done since 2017.  Unfortunately, Germany and Italy didn’t (DAX -0.90%, MIB -1.18%) though the UK and France did (FTSE 100 +3.10%, CAC +1.90%), as did Japan (just) and China. What might help this week? Various PMIs for Europe –Germany’s should improve although France’s are expected to slide further – and the US.  The US also publishes Q4 GDP data and factory orders while the UK gets GDP data and the Bank of England rate decision. 

They offered me the office, offered me the shop: Career opportunities abounded in the US as the non-farm payrolls number rattled along at 304,000, the highest monthly total for nearly a year, and nearly double the 165,000 forecast.  Leading the charge the 75,000 new hires in the leisure and hospitality sectors with construction, healthcare and transportation / warehousing also strong. Clashing with the January data was the significant downward revision to December from +312,000 to only +222,000. The unemployment rate did rise to 4.0% though as the furloughed government employees counted as temporary layoffs. Still, can’t knock the good news.

Not the most co-ordinated wardrobe: France continues experiencing Gilet Jaunes protests – this weekend’s were the 12thweek in a row and focused on the police use of rubber bullets after many protestors suffered significant injuries. There have also been protests now by the “red scarves” and “blue vests” wanting an end to the violence. President Macron is also eager to see an end to the disruption, and since the focus of the anti-establishment yellow vests is social change in France he is thought to be planning a national referendum – possibly May 26th– to give the people say over numerous reforms.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +1.79 (+0.15%) at 1,164 (YTD: 7.43%; 5YR: 55.3%)
MSCI AC World Equities (USD) up +5.04 (+0.06%) at 8,384 (YTD: 7.88%; 5YR: 46.5%)
Barclays Global Aggregate Bonds down -1.22 (-0.25%) at 485 (YTD: 1.27%; 5YR: 5.5%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +2.43 (+0.09%) at 2,707 (YTD: 7.97%; 5YR: 54.2%)
NASDAQ down -17.87 (-0.25%) at 7,264 (YTD: 9.47%; 5YR: 80.2%)
Euro STOXX 50 up +11.69 (+0.37%) at 3,171 (YTD: 5.65%; 5YR: 7.0%)
FTSE 100 up +51.37 (+0.74%) at 7,020 (YTD: 4.34%; 5YR: 8.9%)
CAC 40 up +26.54 (+0.53%) at 5,019 (YTD: 6.10%; 5YR: 21.9%)
DAX up +7.56 (+0.07%) at 11,181 (YTD: 5.89%; 5YR: 22.5%)
Nikkei 225  up +95.38 (+0.46%) at 20,884 (YTD: 4.34%; 5YR: 49.1%)
Hang Seng up +59.47 (+0.21%) at 27,990 (YTD: 8.30%; 5YR: 30.8%)
MSCI Emerging Markets up +0.27 (+0.03%) at 1,050 (YTD: 8.74%; 5YR: 14.4%) 

Selected Government Bond Yields
US 10 Year up +0.01 at 2.69 (began the year at 2.68; 5 years ago it was 2.63)
US 2 Year up +0.01 at 2.51 (began the year at 2.49; 5 years ago it was 0.31)
UK 10 Year up +0.03 at 1.25 (began the year at 1.28; 5 years ago it was 2.70)
Germany 10 Year up +0.00 at 0.17 (began the year at 0.24; 5 years ago it was 1.65)
France 10 Year down 0.00 at 0.57 (began the year at 0.70; 5 years ago it was 2.23)
Italy 10 Year up +0.02 at 2.76 (began the year at 2.74; 5 years ago it was 3.78 
Japan 10 Year up +0.01 at -0.01 (began the year at -0.01; 5 years ago it was 0.61)
Barclays EM Basket up +0.01 at 6.04 (began the year at 6.22; 5 years ago it was 5.94)
 
Selected Currencies
€/$ down -0.003 (-0.24%) at 1.144 (YTD: -0.09%; 5YR: -15.4%)
£/€ up -0.002 (+0.15%) at 1.143 (YTD: 2.59%; 5YR: -5.7%)
£/$ up -0.001 (-0.08%) at 1.307 (YTD: 2.57%; 5YR: -19.9%)
$/¥ down -0.23 (+0.21%) at 109.79 (YTD: 0.12%; 5YR: 7.4%)

Selected Commodities
Brent Crude ($/bbl) down +0.16 (+0.26%) at 62.70 (YTD: 17.92%; 5YR: -40.9%)
WTI Crude ($/bbl) down +1.47 (+2.73%) at 55.26 (YTD: 21.69%; 5YR: -43.3%) 
Gold ($/ozt) up -4.33 (-0.33%) at 1313.32 (YTD: 2.41%; 5YR: 4.7%)
Copper ($/mt) down -30.00 (-0.49%) at 6139.00 (YTD: 2.92%; 5YR: -13.1%)
 
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).XX

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros