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30 January 2019

30/01/2019

Morning Chat & Market Data

Morning Chat


So, tellmewhatyouwant, whatyoureally, reallywant: Parliament appears to have told us what they want … really.  Of last night’s numerous amendments only two were upheld. The “morally binding” Spelman/Dromey amendment passed 318 to 310 holding that the House does not want a no-deal. The second, Sir Graham Brady’s amendment, passed 317 to 301, effectively saying May’s old deal but with “alternative arrangements” to the backstop could be just fine. However, within minutes, European Parliament Brexit co-ordinator Paul Verhofstadt and French President Macron said don't go wasting my precious time, the Agreement is not re-negotiable.

More than a bottle or two of bubbly: French luxury goods maker LVMH popped the cork on sparkling earnings after European markets closed yesterday, reporting a 9% increase in fourth quarter sales.  Moreover, they noted the pace of demand was increasing with Chinese demand doing well.  Their Wines & Spirits division was in all-round good cheer, while Fashion & Leather Goods bagged a 17% increase. Last quarter’s 14% sales rise wasn’t enough for support, but this time around the news was better than expected prompting the US LVMH ADR rallied 4.78% and it should help boost other luxury names today.

SweetApple and a darling: The US markets were mixed. Dow up 0.2%, but with tech jittery anticipating Apple’s results, the Nasdaq was down 0.8%. The numbers came afterhours.  A beat, by a pip, earnings per share (eps) of $4.18 versus $4.17 expected. iPhone sales down, but after earlier declines Apple was too cheap.  Shares leapt 5.70% in the aftermarket (+4.64% net on the day). Meanwhile, AMD, the best S&P stock last year, but pounded in 2019, reported in line eps and revenues a bit light but with an expectation was for a strong 2019 lifting shares 9.09% (+4.48% net)

Market Data


Selected Global Aggregates (Total returns, unhedged) 
MSCI AC World Equities (Local) up +0.78 (+0.07%) at 1,142 (YTD: 5.44%; 5YR: 48.9%)
MSCI AC World Equities (USD) up +1.83 (+0.02%) at 8,215 (YTD: 5.71%; 5YR: 40.2%)
Barclays Global Aggregate Bonds up +0.15 (+0.03%) at 483 (YTD: 0.88%; 5YR: 5.4%)
 
Selected Equity Indices (Capital returns) 
S&P 500 down -3.85 (-0.15%) at 2,640 (YTD: 5.31%; 5YR: 47.1%)
NASDAQ down -57.39 (-0.81%) at 7,028 (YTD: 5.92%; 5YR: 70.5%)
Euro STOXX 50 up +16.15 (+0.51%) at 3,153 (YTD: 5.06%; 5YR: 4.2%)
FTSE 100 up +86.83 (+1.29%) at 6,834 (YTD: 1.57%; 5YR: 4.5%)
CAC 40 up +39.60 (+0.81%) at 4,928 (YTD: 4.17%; 5YR: 17.9%)
DAX up +8.52 (+0.08%) at 11,219 (YTD: 6.25%; 5YR: 19.7%)
Nikkei 225  down -108.10 (-0.52%) at 20,557 (YTD: 2.71%; 5YR: 37.0%)
Hang Seng up +28.83 (+0.10%) at 27,561 (YTD: 6.63%; 5YR: 25.1%)
MSCI Emerging Markets up +1.69 (+0.16%) at 1,030 (YTD: 6.62%; 5YR: 10.0%) 
 
Selected Government Bond Yields
US 10 Year up +0.00 at 2.71 (began the year at 2.68; 5 years ago it was 2.69)
US 2 Year unchanged at 2.57 (began the year at 2.49; 5 years ago it was 0.34)
UK 10 Year up +0.00 at 1.27 (began the year at 1.28; 5 years ago it was 2.75)
Germany 10 Year down -0.22 at 0.19 (began the year at 0.24; 5 years ago it was 1.71)
France 10 Year down -0.17 at 0.60 (began the year at 0.70; 5 years ago it was 2.31)
Italy 10 Year down -0.91 at 2.63 (began the year at 2.74; 5 years ago it was 3.82) 
Japan 10 Year down -0.13 at 0.00 (began the year at -0.01; 5 years ago it was 0.62)
Barclays EM Basket down 0.00 at 6.08 (began the year at 6.22; 5 years ago it was 5.92)
 
Selected Currencies
€/$ down +0.001 (+0.06%) at 1.144 (YTD: -0.15%; 5YR: -15.6%)
£/€ down +0.006 (-0.52%) at 1.144 (YTD: 2.67%; 5YR: -6.4%)
£/$ up -0.006 (-0.46%) at 1.308 (YTD: 2.60%; 5YR: -20.7%)
$/¥ down +0.10 (-0.09%) at 109.28 (YTD: -0.35%; 5YR: 5.9%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.15 (+0.25%) at 60.99 (YTD: 14.71%; 5YR: -43.8%)
WTI Crude ($/bbl) down +1.32 (+2.54%) at 53.31 (YTD: 17.40%; 5YR: -45.2%)
Gold ($/ozt) up +3.35 (+0.25%) at 1315.14 (YTD: 2.55%; 5YR: 5.7%)
Copper ($/mt) up +48.00 (+0.80%) at 6050.00 (YTD: 1.42%; 5YR: -15.1%) 
 
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).

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros