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9 January 2019

09/01/2019

Morning Chat & Market Data

Morning Chat


Bit of jolt: The US continued riding a China trade-talks upswing with the S&P closing up 0.97%. Yet at first glance, the US Job Openings and Labor Turnover Survey (a survey of the jobs on offer and the willingness of employees to change jobs) was a bit of a dampener at 6.888 million vacancies versus 7.050 million expected. However, reading a bit deeper, last month’s number was revised up by 52 thousand closing the shortfall, the relatively static 3.4 million quits rate implies employees still have enough confidence to risk moving jobs and there are still more openings than unemployed!

We haven’t mentioned Brexit: Ok, so that’s done…. Actually, the government lost a vote limiting government no-deal preparation spending last night by 303 to 296 votes – the market today may give some indication if it’s significant or inconvenient. Note though, yesterday European markets ignored economic confidence data slipping for a twelfth month to a two-year low 107.3, as it dropped more than forecast. Markets also ignored the surprise -1.9% decline in German industrial production (+0.3% was expected). Instead the FTSE 100 rallied 1.13%, the DAX 0.91%, and CAC 1.46% on those positive noises around the US China trade talks.

Galaxies not a star: Korean company Samsung closed down 1.7% after reporting disappointing Q4 earnings yesterday as smartphone and memory chip sales slid. Samsung’s operating profit of only £7.6 billion (only) for the quarter was shy of the £9.6 billion analysts expected.  Management noted the ongoing US-China trade war is reducing demand for memory chips, but sales should recover with a deal.  Moreover, like Apple and Samsung rival LG (which reported profits down 80%), Samsung noted a slowdown in their smartphone sales. If you’re thinking Apple had a bad 12 months lagging the S&P by 9.5%, pity Samsung 25.1% behind.

Market Data
 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +8.64 (+0.79%) at 1,108 (YTD: 2.29%; 5YR: 41.2%)
MSCI AC World Equities (USD) up +66.26 (+0.84%) at 7,987 (YTD: 2.77%; 5YR: 33.2%)Barclays Global Aggregate Bonds down -1.10 (-0.23%) at 480 (YTD: 0.26%; 5YR: 6.0%)
 
Selected Equity Indices (Capital returns) 
S&P 500 up +24.72 (+0.97%) at 2,574 (YTD: 2.70%; 5YR: 40.1%)
NASDAQ up +73.53 (+1.08%) at 6,897 (YTD: 3.94%; 5YR: 65.9%)
Euro STOXX 50 up +21.30 (+0.70%) at 3,055 (YTD: 1.78%; 5YR: -1.1%)
FTSE 100 up +50.72 (+0.74%) at 6,862 (YTD: 1.98%; 5YR: 2.5%)
CAC 40 up +54.10 (+1.15%) at 4,773 (YTD: 0.90%; 5YR: 13.0%)
DAX up +56.17 (+0.52%) at 10,804 (YTD: 2.32%; 5YR: 14.7%)
Nikkei 225  up +223.02 (+1.10%) at 20,427 (YTD: 2.06%; 5YR: 28.6%)
Hang Seng up +540.64 (+2.09%) at 26,416 (YTD: 2.21%; 5YR: 15.9%)
MSCI Emerging Markets down -2.46 (-0.25%) at 976 (YTD: 1.02%; 5YR: 1.3%) 
 
Selected Government Bond Yields
US 10 Year down -0.01 at 2.72 (began the year at 2.68; 5 years ago it was 2.97)
US 2 Year down -0.01 at 2.58 (began the year at 2.49; 5 years ago it was 0.43)
UK 10 Year up +0.02 at 1.27 (began the year at 1.28; 5 years ago it was 2.98)
Germany 10 Year down -0.17 at 0.23 (began the year at 0.24; 5 years ago it was 1.91)
France 10 Year down -0.04 at 0.73 (began the year at 0.70; 5 years ago it was 2.57)
Italy 10 Year down -0.59 at 2.95 (began the year at 2.74; 5 years ago it was 3.92)
Japan 10 Year down -0.11 at 0.02 (began the year at -0.01; 5 years ago it was 0.69)
Barclays EM Basket down 0.00 at 6.18 (began the year at 6.22; 5 years ago it was 5.82)
 
Selected Currencies
€/$ down +0.002 (+0.17%) at 1.147 (YTD: 0.19%; 5YR: -15.5%)
£/€ down +0.000 (-0.02%) at 1.111 (YTD: -0.22%; 5YR: -9.1%)
£/$ down +0.002 (+0.15%) at 1.274 (YTD: -0.02%; 5YR: -22.6%)
$/¥ down -0.26 (+0.24%) at 108.85 (YTD: -0.74%; 5YR: 3.7%)
 
Selected Commodities
Brent Crude ($/bbl) down +0.82 (+1.42%) at 58.58 (YTD: 10.17%; 5YR: -44.8%)
WTI Crude ($/bbl) down +1.26 (+2.60%) at 49.78 (YTD: 9.62%; 5YR: -46.1%)
Gold ($/ozt) up -2.04 (-0.16%) at 1283.17 (YTD: 0.06%; 5YR: 4.5%)
Copper ($/mt) down -17.00 (-0.29%) at 5906.00 (YTD: -0.99%; 5YR: -19.6%)
 
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