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23 January 2019

23/01/2019

Morning Chat & Market Data

Morning Chat


So is it on?
The US markets slid Tuesday after being closed Monday. The S&P was off 1.35% and the Nasdaq 1.93% though they remain in positive territory for 2019.  One report would appear to have had a big impact on sentiment, that the White House had cancelled a trade planning meeting with the Chinese over intellectual property (IP) rights.  Although later denied, any negative news on the US China trade talks will be felt, and the IP rights is one of the most important components to the agreement for the US. Both sides however say talks are progressing well.

Some things are still working: It may not have been a good day for the UK FTSE 100, which fell 1.55% yesterday with the All share down 0.87%, but the employment numbers were not to blame. In the three months to November 2018, the UK unemployment rate was 4.0% a 43-year low - forecasters had expected 4.1% - and the number in employment increased to 32.54 million – a record high.  Moreover, wages excluding bonuses – dear to everyone’s heart bar the payer, or possibly the shareholder – grew 3.3%, the best pace of gain since 2008.  Taking inflation into account, real wages increased 1.1%.    

Pesky guidance: Johnson and Johnson shares slipped 1.45% yesterday – pretty much in line with the market – following their Q4 earnings call in the morning.  The results were not too bad – an earnings beat and revenue ahead of expectations.  Net income came in at $3.04 billion versus a loss of $10.7 billion a year earlier.  That’s got to be good, right?  However, the company also forecast 2019 earnings would come in between $8.50 to $8.65 a share with revenues around £80.4 billion to $81.2 billion. Therein lies the problem as analysts had expected $8.60 a share and $82.69 billion in revenues.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -12.07 (-1.05%) at 1,137 (YTD: 4.93%; 5YR: 44.7%)
MSCI AC World Equities (USD) down -90.38 (-1.09%) at 8,170 (YTD: 5.13%; 5YR: 35.9%)
Barclays Global Aggregate Bonds up +0.91 (+0.19%) at 480 (YTD: 0.31%; 5YR: 4.9%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -37.81 (-1.42%) at 2,633 (YTD: 5.03%; 5YR: 44.0%)
NASDAQ down -136.87 (-1.91%) at 7,020 (YTD: 5.80%; 5YR: 66.4%)
Euro STOXX 50 down -12.27 (-0.39%) at 3,113 (YTD: 3.71%; 5YR: -0.1%)
FTSE 100 down -69.20 (-0.99%) at 6,901 (YTD: 2.58%; 5YR: 1.9%)
CAC 40 down -20.25 (-0.42%) at 4,848 (YTD: 2.47%; 5YR: 13.2%)
DAX down -46.09 (-0.41%) at 11,090 (YTD: 5.03%; 5YR: 15.1%)
Nikkei 225  down -29.19 (-0.14%) at 20,594 (YTD: 2.89%; 5YR: 31.2%)
Hang Seng up +10.40 (+0.04%) at 27,016 (YTD: 4.53%; 5YR: 18.8%)
MSCI Emerging Markets down -7.82 (-0.77%) at 1,011 (YTD: 4.66%; 5YR: 4.8%)
 
Selected Government Bond Yields
US 10 Year up +0.01 at 2.74 (began the year at 2.68; 5 years ago it was 2.78)
US 2 Year down 0.00 at 2.59 (began the year at 2.49; 5 years ago it was 0.36)
UK 10 Year unchanged at 1.32 (began the year at 1.28; 5 years ago it was 2.81)
Germany 10 Year down -0.18 at 0.23 (began the year at 0.24; 5 years ago it was 1.71)
France 10 Year down -0.14 at 0.64 (began the year at 0.70; 5 years ago it was 2.42)
Italy 10 Year down -0.80 at 2.75 (began the year at 2.74; 5 years ago it was 3.86)
Japan 10 Year down -0.13 at 0.00 (began the year at -0.01; 5 years ago it was 0.66)
Barclays EM Basket down -0.01 at 6.13 (began the year at 6.22; 5 years ago it was 5.74)
 
Selected Currencies
€/$ down 0.000 (0.00%) at 1.137 (YTD: -0.72%; 5YR: -16.9%)
£/€ up 0.000 (+0.02%) at 1.140 (YTD: 2.40%; 5YR: -6.6%)
£/$ down +0.000 (+0.02%) at 1.297 (YTD: 1.73%; 5YR: -22.0%)
$/¥ down -0.33 (+0.30%) at 109.66 (YTD: 0.00%; 5YR: 5.6%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.25 (+0.41%) at 61.28 (YTD: 15.25%; 5YR: -43.9%)
WTI Crude ($/bbl) down -1.23 (-2.29%) at 52.57 (YTD: 15.77%; 5YR: -45.7%)
Gold ($/ozt) up -1.11 (-0.09%) at 1284.17 (YTD: 0.13%; 5YR: 1.6%)
Copper ($/mt) down -46.00 (-0.77%) at 5935.00 (YTD: -0.50%; 5YR: -18.6%)
 
Data sourced from Bloomberg as of the close of last trading day.
YTD = Year-to-date return; 5YR = five year return
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros