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14 January 2019

14/01/2019

Morning Chat & Market Data

Morning Chat


Caution over too much optimism: Equity markets closed down Friday after a decent week’s run – oh, and still closed up on the week. As an exemplar, the FTSE 100 fell 0.48%, but still managed a 1.06% gain for the week.  Other European markets posted similar numbers as the upcoming Brexit vote looms.  But the UK had other factors at work too.  November GDP was only 0.3% – a six month low – and manufacturing production fell 1.1%. But also exports rose 0.4% to an all-time high of nearly £54 billion and the trade deficit narrowed.  Reasons for optimism, reasons for caution too.

Yet Friday wasn’t all bad: In the US, equities opened down 0.5% over worries the continuing (yes, still continuing) US government shutdown is no closer to resolution. However, as the day continued, both the S&P and Nasdaq rallied on good inflation numbers, closing down only 0.06% and 0.29% respectively; that’s not too bad. Moreover, the initial decline wasn’t too severe; in fact, US markets did not see a 1% or greater move at all last week which hasn’t happened since around the time the sell-off began in October. Now if the upcoming earnings season can give some reasons for cheer…

“Greetings my friends! We are all interested in the future”… The opening line of Plan 9 from Outer Space, Golden Turkey award winner and deemed the worst film ever.  The majority of MP’s think PM Theresa May’s Brexit deal should win a Golden Turkey award and this week should reveal more.  Tuesday – unless it’s delayed again – the meaningful vote. If May’s deal fails, Labour leader Jeremy Corbyn said he’ll table a no-confidence vote… at a time of his choosing… but soon. Decisive. Otherwise May must come up with a Plan B within three business days. This week’s an interesting future.

Market Data


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +0.71 (+0.06%) at 1,121 (YTD: 3.48%; 5YR: 42.7%)
MSCI AC World Equities (USD) down -2.15 (-0.03%) at 8,078 (YTD: 3.95%; 5YR: 34.3%)
Barclays Global Aggregate Bonds down -0.04 (-0.01%) at 482 (YTD: 0.59%; 5YR: 5.5%) 
 
Selected Equity Indices (Capital returns)
S&P 500 down -0.38 (-0.01%) at 2,596 (YTD: 3.57%; 5YR: 41.2%)
NASDAQ down -14.59 (-0.21%) at 6,971 (YTD: 5.07%; 5YR: 66.7%)
Euro STOXX 50 down -5.69 (-0.18%) at 3,070 (YTD: 2.29%; 5YR: -1.6%)
FTSE 100 down -24.69 (-0.36%) at 6,918 (YTD: 2.82%; 5YR: 2.2%)
CAC 40 down -24.32 (-0.51%) at 4,781 (YTD: 1.07%; 5YR: 11.9%)
DAX down -34.13 (-0.31%) at 10,887 (YTD: 3.11%; 5YR: 14.1%)
Nikkei 225  up +195.90 (+0.97%) at 20,360 (YTD: 1.72%; 5YR: 32.0%)
Hang Seng down -373.84 (-1.40%) at 26,293 (YTD: 1.73%; 5YR: 15.4%)
MSCI Emerging Markets up +2.44 (+0.24%) at 1,001 (YTD: 3.67%; 5YR: 2.6%)
 
Selected Government Bond Yields
US 10 Year down -0.03 at 2.67 (began the year at 2.68; 5 years ago it was 2.87)
US 2 Year down -0.03 at 2.51 (began the year at 2.49; 5 years ago it was 0.38)
UK 10 Year up +0.02 at 1.29 (began the year at 1.28; 5 years ago it was 2.83)
Germany 10 Year down -0.18 at 0.23 (began the year at 0.24; 5 years ago it was 1.81)
France 10 Year down -0.12 at 0.65 (began the year at 0.70; 5 years ago it was 2.46)
Italy 10 Year down -0.66 at 2.88 (began the year at 2.74; 5 years ago it was 3.88)
Japan 10 Year down -0.12 at 0.01 (began the year at -0.01; 5 years ago it was 0.65)
Barclays EM Basket down -0.02 at 6.13 (began the year at 6.22; 5 years ago it was 5.75)
 
Selected Currencies
€/$ down -0.001 (-0.11%) at 1.147 (YTD: 0.16%; 5YR: -16.2%)
£/€ down +0.002 (-0.13%) at 1.118 (YTD: 0.48%; 5YR: -7.5%)
£/$ down -0.003 (-0.25%) at 1.283 (YTD: 0.64%; 5YR: -22.0%)
$/¥ down +0.31 (-0.29%) at 108.10 (YTD: -1.44%; 5YR: 3.8%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.82 (-1.37%) at 58.99 (YTD: 10.95%; 5YR: -44.3%)
WTI Crude ($/bbl) down -1.00 (-1.90%) at 51.59 (YTD: 13.61%; 5YR: -44.4%)
Gold ($/ozt) up +4.98 (+0.39%) at 1292.48 (YTD: 0.78%; 5YR: 3.8%)
Copper ($/mt) up +12.00 (+0.20%) at 5942.00 (YTD: -0.39%; 5YR: -18.6%)
 
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