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25 January 2019

25/01/2019

Morning Chat & Market Data

Market Data


Miles and miles to a better day: There was much influencing US equity markets yesterday, but it left markets fairly flat.  The S&P closed +0.04% up, the Dow 0.09% down.  On the positive side, the US Markit manufacturing purchasing manager’s index (PMI) scored an upbeat 54.9, up from 53.8 last month and ahead if the 53.5 expected. A solid rebound back close to levels seen through 2018. The negative? US Commerce Secretary Wilbur Ross commented that the US was still “miles and miles” from reaching a trade deal with China with the deficit and intellectual property rights the contentious issues.

Economics isn’t everything: The Australian stock index rose 0.38% yesterday bringing the total 2019 gain to 5.50, boosted by better-than-expected December unemployment data.  Total employment rose 21,600 to 12.7 million compared to the 16.500 increase expected and the unemployment rate fell to a 6½ year low 5.0%.  Underemployment is still a bit high, but also fell.  Given GDP growth over 2% every quarter bar one in 9 years and positive since the early 90’s, it’s surprising to think the market peak was 6828.70 in November 2007, 6.8% above the recent high and 14.1% above yesterday! So still down down under.

The chips are down: Intel shares were on pace for a good day, up 3.80%.  Then they announced their quarterly numbers and shares quickly fell in the aftermarket closing down 6.65% (-2.85% net on the day and 1.0% year-to-date). The problem? Well, earnings per share were actually pretty good at $1.28 versus $1.22 expected. Revenue numbers however weren’t at $18.66 billion versus $19.01 expected. Revenue estimates were missed by all divisions, but cloud computing growth fell painfully from 50% to 24%, mainly on a capacity reset.  Oh, and like last quarter, guidance was weak too as competition from AMD heats up. 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +2.73 (+0.24%) at 1,140 (YTD: 5.20%; 5YR: 47.8%)
MSCI AC World Equities (USD) up +12.91 (+0.16%) at 8,189 (YTD: 5.37%; 5YR: 38.9%)
Barclays Global Aggregate Bonds up +0.82 (+0.17%) at 482 (YTD: 0.54%; 5YR: 4.9%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +3.63 (+0.14%) at 2,642 (YTD: 5.40%; 5YR: 47.6%)
NASDAQ up +47.69 (+0.68%) at 7,073 (YTD: 6.60%; 5YR: 71.3%)
Euro STOXX 50 up +14.18 (+0.46%) at 3,126 (YTD: 4.16%; 5YR: 3.2%)
FTSE 100 down -23.93 (-0.35%) at 6,819 (YTD: 1.35%; 5YR: 2.3%)
CAC 40 up +31.58 (+0.65%) at 4,872 (YTD: 2.99%; 5YR: 17.1%)
DAX up +58.64 (+0.53%) at 11,130 (YTD: 5.41%; 5YR: 18.5%)
Nikkei 225  up +198.93 (+0.97%) at 20,774 (YTD: 3.79%; 5YR: 35.0%)
Hang Seng up +375.68 (+1.39%) at 27,497 (YTD: 6.39%; 5YR: 22.5%)
MSCI Emerging Markets up +7.88 (+0.78%) at 1,019 (YTD: 5.57%; 5YR: 7.3%) 
 
Selected Government Bond Yields
US 10 Year up +0.02 at 2.73 (began the year at 2.68; 5 years ago it was 0.00)
US 2 Year up +0.02 at 2.58 (began the year at 2.49; 5 years ago it was 0.00)
UK 10 Year down -0.06 at 1.27 (began the year at 1.28; 5 years ago it was 0.00)
Germany 10 Year down -0.22 at 0.19 (began the year at 0.24; 5 years ago it was 0.00)
France 10 Year down -0.19 at 0.59 (began the year at 0.70; 5 years ago it was 0.00)
Italy 10 Year down -0.88 at 2.66 (began the year at 2.74; 5 years ago it was 0.00)
Japan 10 Year down -0.13 at 0.00 (began the year at -0.01; 5 years ago it was 0.00)
Barclays EM Basket down -0.02 at 6.10 (began the year at 6.22; 5 years ago it was 0.00)
 
Selected Currencies
€/$ down +0.002 (+0.19%) at 1.132 (YTD: -1.15%; 5YR: -17.3%)
£/€ up -0.005 (+0.44%) at 1.157 (YTD: 3.81%; 5YR: -4.3%)
£/$ up +0.008 (+0.63%) at 1.310 (YTD: 2.77%; 5YR: -20.6%)
$/¥ down -0.18 (+0.16%) at 109.86 (YTD: 0.18%; 5YR: 6.9%)

Selected Commodities
Brent Crude ($/bbl) down +0.40 (+0.66%) at 61.32 (YTD: 15.33%; 5YR: -43.8%)
WTI Crude ($/bbl) down +0.56 (+1.07%) at 52.98 (YTD: 16.67%; 5YR: -45.2%)
Gold ($/ozt) up +2.86 (+0.22%) at 1284.04 (YTD: 0.12%; 5YR: 1.1%)
Copper ($/mt) down -29.50 (-0.50%) at 5922.00 (YTD: -0.72%; 5YR: -17.5%)
 
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; 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