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31 January 2019

31/01/2019

Morning Chat and Market Data

Morning Chat


Oh, what a day: European markets closed somewhat mixed.  The FTSE 100 was +1.38% on Parliament’s more positive Brexit news, France’s CAC was +0.95% on the LVMH earnings, while the DAX fell 0.33% on SAP’s poor earnings numbers. Then hopping over the pond to the US.  The market was running up on Apple and Boeing’s numbers, when Fed Chairman Jerome Powell offered up that “the case for raising rates has weakened somewhat” as the FOMC left rates unchanged and the ADP employment data was +213,000 compared to a forecast of +178,000. The result? The S&P up 1.55% and Nasdaq 2.64%.

Oh, what a night: Then, a flurry last night… of predominantly great aftermarket stock reports by big names. Facebook saw average revenue per customer soar 21% from last quarter and +30.4% revenues year-on-year so rallied 11.51% in the aftermarket (15.82% net for the day), Microsoft saw a slight revenue miss but earnings per share of $1.10 versus $1.09 expected; shares fell 2.72% (+0.62% net). ServiceNow beat on revenues and massively on earnings so they jumped 6.60% (11.57% net). Visa saw decent payments growth but slipped 1.61% (+0.34% net), and Qualcomm, although missing earnings, gave strong guidance and rallied 2.45% (4.01% net).

Red Card: It’s always disheartening when a favoured name stumbles.  Shares in German fintech Wirecard, specialising in cashless electronic payments systems, dropped sharply yesterday on a Financial Times report that a “senior executive” was suspected of forging and manipulating contracts. After tumbling nearly 25%, the shares recovered to close down 13.29%.  To be fair, the shares have been recovering from the Christmas low, so this fall erases only 8 days of recovered ground, and it’s still up nearly 10% this year, but it did push the DAX to close down 0.33% wiping out the contribution of the best six performers.


Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +11.92 (+1.04%) at 1,154 (YTD: 6.54%; 5YR: 51.1%)
MSCI AC World Equities (USD) up +89.20 (+1.09%) at 8,305 (YTD: 6.86%; 5YR: 42.6%)
Barclays Global Aggregate Bonds up +0.23 (+0.05%) at 483 (YTD: 0.92%; 5YR: 5.4%) 

Selected Equity Indices (Capital returns)
S&P 500 up +41.05 (+1.55%) at 2,681 (YTD: 6.95%; 5YR: 50.4%)
NASDAQ up +154.79 (+2.20%) at 7,183 (YTD: 8.26%; 5YR: 75.0%)
Euro STOXX 50 up +8.32 (+0.26%) at 3,162 (YTD: 5.34%; 5YR: 4.9%)
FTSE 100 up +107.70 (+1.58%) at 6,942 (YTD: 3.17%; 5YR: 6.6%)
CAC 40 up +46.58 (+0.95%) at 4,975 (YTD: 5.16%; 5YR: 19.4%)
DAX down -37.17 (-0.33%) at 11,182 (YTD: 5.90%; 5YR: 20.1%)
Nikkei 225  up +216.95 (+1.06%) at 20,773 (YTD: 3.79%; 5YR: 39.3%) 
Hang Seng up +297.03 (+1.07%) at 27,940 (YTD: 8.10%; 5YR: 26.8%)
MSCI Emerging Markets up +6.88 (+0.67%) at 1,037 (YTD: 7.34%; 5YR: 10.7%) 
 
Selected Government Bond Yields 
US 10 Year down -0.01 at 2.67 (began the year at 2.68; 5 years ago it was 2.64)
US 2 Year down -0.01 at 2.49 (began the year at 2.49; 5 years ago it was 0.33)
UK 10 Year down -0.01 at 1.26 (began the year at 1.28; 5 years ago it was 2.71) 
Germany 10 Year down -0.24 at 0.16 (began the year at 0.24; 5 years ago it was 1.66)
France 10 Year down -0.20 at 0.57 (began the year at 0.70; 5 years ago it was 2.23)
Italy 10 Year down -0.98 at 2.57 (began the year at 2.74; 5 years ago it was 3.77)
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 -0.01 at 6.07 (began the year at 6.22; 5 years ago it was 5.95)
 
Selected Currencies
€/$ down +0.009 (+0.75%) at 1.151 (YTD: 0.46%; 5YR: -14.8%)
£/€ down +0.002 (-0.16%) at 1.142 (YTD: 2.56%; 5YR: -6.7%)
£/$ up +0.008 (+0.60%) at 1.314 (YTD: 3.10%; 5YR: -20.2%)
$/¥ down +0.78 (-0.72%) at 108.75 (YTD: -0.84%; 5YR: 6.0%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.36 (+0.59%) at 61.69 (YTD: 16.02%; 5YR: -42.5%)
WTI Crude ($/bbl) down +0.92 (+1.73%) at 54.23 (YTD: 19.42%; 5YR: -44.8%)
Gold ($/ozt) up +1.60 (+0.12%) at 1321.57 (YTD: 3.05%; 5YR: 6.2%)
Copper ($/mt) up +86.00 (+1.42%) at 6136.00 (YTD: 2.87%; 5YR: -13.5%)
 
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