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28 January 2019

28/01/2019

Morning Chat and Market Data

Morning Chat


Annoying ringtone: The FTSE 100 was unlikely to do well enough on Friday to recoup the 2.2% needed to be up on the week.  Miners tried to help, hitting three-week highs. Dollar-earners hurt on dollar weakness. Oh, and Vodafone fell 4.89% (-10.39% year-to-date). That meant the FTSE 100 was -0.01% for Friday. Not so bad. So what was Vodafone’s problem? It’s €11.0 billion group revenue narrowly missed estimates because of currency headwinds. Yet they also had lower mobile churn, improving customer trends in Italy and Spain and reiterated 2019 guidance. You would think a phone company could avoid wrong numbers.

Back in Business: Yesterday it seemed the world was about to end, didn't it? .... Disaster waited around the bend. Well, my friend. Spring is here. So sang Earth Kitt, so sing investors with the S&P up 0.85% and news US President Donald Trump signed a bill to reopen the US government after the longest shutdown in US history – 35 days! But its only temporary, and it’s still winter – it even snowed in Washington last week.  The bill buys three weeks in which a bipartisan, bicameral committee will look to strike a deal on border security. Where’s that bend again? 

Cleaner, not necessarily brighter: Consumer product company Colgate-Palmolive reported Friday, beating on revenues ($3.81 billion to $3.78 forecast) & a penny on earnings, and a more-than-foamy 2.0% organic sales and 2.5% pricing gain on the quarter. Hurrah, shares were.. oh, down 0.58%. Currency exchange took 5% and rising costs hurt too – and will, yep, a “poor 2019 outlook” bite as well.  Meanwhile clean energy company (and utility – biggest by market capitalisation) NextEra, which was stellar in 2018 (+10.6%), missed revenues and earnings as tax effects faded from $1.98 billion to $25 million.  Shares fell 3.37% but are still +0.2% year-to-date.

Market Data

Selected Global Aggregates (Total returns, unhedged) 
MSCI AC World Equities (Local) up +9.46 (+0.83%) at 1,149 (YTD: 6.07%; 5YR: 49.8%)
MSCI AC World Equities (USD) up +77.09 (+0.94%) at 8,266 (YTD: 6.36%; 5YR: 40.8%)
Barclays Global Aggregate Bonds up +0.55 (+0.11%) at 482 (YTD: 0.66%; 5YR: 5.1%) 
 
Selected Equity Indices (Capital returns)
S&P 500 up +22.43 (+0.85%) at 2,665 (YTD: 6.30%; 5YR: 48.7%)
NASDAQ up +91.40 (+1.29%) at 7,165 (YTD: 7.98%; 5YR: 74.8%)
Euro STOXX 50 up +36.93 (+1.18%) at 3,163 (YTD: 5.39%; 5YR: 4.1%)
FTSE 100 down -9.73 (-0.14%) at 6,809 (YTD: 1.21%; 5YR: 3.6%)
CAC 40 up +53.86 (+1.11%) at 4,926 (YTD: 4.12%; 5YR: 17.7%) 
DAX up +151.61 (+1.36%) at 11,282 (YTD: 6.85%; 5YR: 19.9%) 
Nikkei 225  down -124.56 (-0.60%) at 20,649 (YTD: 3.17%; 5YR: 37.8%) 
Hang Seng down -39.79 (-0.14%) at 27,529 (YTD: 6.51%; 5YR: 25.4%) 
MSCI Emerging Markets up +12.91 (+1.27%) at 1,032 (YTD: 6.89%; 5YR: 10.5%) 
 
Selected Government Bond Yields 
US 10 Year down -0.01 at 2.74 (began the year at 2.68; 5 years ago it was 2.75) 
US 2 Year down -0.01 at 2.60 (began the year at 2.49; 5 years ago it was 0.34)
UK 10 Year up +0.04 at 1.31 (began the year at 1.28; 5 years ago it was 2.81) 
Germany 10 Year down -0.22 at 0.19 (began the year at 0.24; 5 years ago it was 1.68) 
France 10 Year down -0.18 at 0.59 (began the year at 0.70; 5 years ago it was 2.36) 
Italy 10 Year down -0.90 at 2.64 (began the year at 2.74; 5 years ago it was 3.85) 
Japan 10 Year down -0.13 at -0.01 (began the year at -0.01; 5 years ago it was 0.63)
Barclays EM Basket down -0.01 at 6.09 (began the year at 6.22; 5 years ago it was 5.80)
 
Selected Currencies
€/$ down +0.000 (+0.02%) at 1.141 (YTD: -0.38%; 5YR: -16.5%)
£/€ unchanged 0.000 (0.00%) at 1.155 (YTD: 3.64%; 5YR: -5.0%)
£/$ up +0.000 (+0.02%) at 1.318 (YTD: 3.39%; 5YR: -20.5%)
$/¥ down +0.43 (-0.39%) at 109.34 (YTD: -0.29%; 5YR: 5.9%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.43 (-0.70%) at 60.73 (YTD: 14.22%; 5YR: -44.0%)
WTI Crude ($/bbl) down +0.51 (+0.96%) at 53.49 (YTD: 17.79%; 5YR: -44.7%)
Gold ($/ozt) up -1.80 (-0.14%) at 1301.36 (YTD: 1.47%; 5YR: 3.5%)
Copper ($/mt) up +134.00 (+2.26%) at 6056.00 (YTD: 1.53%; 5YR: -15.7%)
 
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