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2 July 2019

02/07/2019

Market Data and Morning Chat

Morning Chat

Could they compromise? Equity markets had a good day yesterday. The FTSE100 rallied 1.0%, DAX 1.0%, CAC 0.5%, S&P500 0.8% and Nasdaq100 1.2% - decent gains all round backed up by a decent tech sector rally – the US tech sector gained 1.5%. The trigger was the resumption of US-China trade talks. President Trump wasted no time announcing talks were “already underway” and more that the two Presidents had agreed not to introduce new tariffs and to ease the Huawei ban. It was all enough to push the S&P500 hit a new intra-day high of 2,977.86 before settling back. Great news.

Nope. No compromise: While Xi and Trump seem to be moving forward, EU leaders were bogged down. A less-effective-than-usual Angela Merkel initially wanted to see Manfred Weber ascend to the top EU job through a nod if not full bow to the Spitzenkandidat process. It didn’t work, so a compromise was reached at the G20, with Socialist Frans Timmermans getting the job. Only the conservative European People’s Party and the eastern European Visegrad group are not happy with plan two. After 19 hours of negotiations, the EU appears no closer to deciding and compromise appears still a long way off.

…and then the US election: The November 2020 US presidential race is over a year away, yet already a staple of headlines. President Trump is officially in the race, and his Korean maneuverings over the weekend plays to TV soundbites – score one for Donald. The Democrats on the other hand had two days of debates with Californian Senator Kamala Harris appearing to score points on Joe Biden. Did she? The first post-debate polls are out and Joe Biden slipped 5% while Kamala gained 6%. Biden still leads, but level-pegged Saunders & Warren and now Harris are making it a race.

We could do with trade cheer as the UK Markit manufacturing PMI slipped to 48.0 from 49.4…
… while Germany’s was marked back to 45.0 from 45.4 and France to 51.9 from 52.0…
… at least the US purchasing manager index recovered to 50.6 from 50.1 – positive signs maybe?
OPEC extends production cuts for another 9 months boosting oil prices
Swiss regulators bans EU exchanges from trading in Swiss stocks as equivalence agreement lapses
Cosmetics-maker Coty not so pretty slipping 13.5% after announcing plan to “rediscover growth”
British American Tobacco had smoking good numbers rallying 4.1% as 300 billionth ciggy produced


Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +10.56 (+0.84%) at 1,270 (YTD: 17.24%; 5YR: 50.7%)
MSCI AC World Equities (USD) up +58.29 (+0.64%) at 9,180 (YTD: 18.13%; 5YR: 41.4%)
Barclays Global Aggregate Bonds down -1.21 (-0.24%) at 504 (YTD: 5.32%; 5YR: 6.3%)

Selected Equity Indices (Capital returns)
S&P 500 up +22.57 (+0.77%) at 2,964 (YTD: 18.25%; 5YR: 50.1%)
NASDAQ up +84.92 (+1.06%) at 8,091 (YTD: 21.94%; 5YR: 81.5%)
Euro STOXX 50 up +23.90 (+0.69%) at 3,498 (YTD: 16.53%; 5YR: 7.5%)
FTSE 100 up +71.87 (+0.97%) at 7,498 (YTD: 11.44%; 5YR: 10.0%)
CAC 40 up +28.94 (+0.52%) at 5,568 (YTD: 17.70%; 5YR: 25.3%)
DAX up +122.58 (+0.99%) at 12,521 (YTD: 18.59%; 5YR: 26.3%)
Nikkei 225 up +24.30 (+0.11%) at 21,754 (YTD: 8.69%; 5YR: 41.5%)
Hang Seng up +370.79 (+1.30%) at 28,913 (YTD: 11.87%; 5YR: 24.7%)
MSCI Emerging Markets up +9.23 (+0.88%) at 1,064 (YTD: 10.18%; 5YR: 0.3%)

Selected Government Bond Yields
US 10 Year down -0.01 at 2.02 (began the year at 2.68; 5 years ago it was 2.63)
US 2 Year down -0.01 at 1.77 (began the year at 2.49; 5 years ago it was 0.48)
UK 10 Year down -0.02 at 0.81 (began the year at 1.28; 5 years ago it was 2.75)
Germany 10 Year down -0.01 at -0.36 (began the year at 0.24; 5 years ago it was 1.29)
France 10 Year down 0.00 at -0.05 (began the year at 0.70; 5 years ago it was 1.75)
Italy 10 Year down -0.04 at 1.93 (began the year at 2.74; 5 years ago it was 2.91)
Japan 10 Year up +0.00 at -0.15 (began the year at -0.01; 5 years ago it was 0.56)
Barclays EM Basket down -0.01 at 5.87 (began the year at 6.22; 5 years ago it was 5.28)

Selected Currencies
$ strengthened +0.0001 versus € (+0.01%) at 1.1293 ($: YTD: 1.39%; 5YR: 17.3%)
€ weakened -0.0010 versus £ (+0.09%) at 1.1196 (€: YTD: -0.59%; 5YR: 12.3%)
$ weakened -0.0008 versus £ (-0.06%) at 1.2643 ($: YTD: 0.81%; 5YR: 26.3%)
¥ strengthened +0.1000 versus $ (+0.09%) at 108.3800 (¥: YTD: -1.18%; 5YR: -6.1%)

Selected Commodities
Brent Crude ($/bbl) down -0.02 (-0.03%) at 65.23 (YTD: 22.68%; 5YR: -40.8%)
WTI Crude ($/bbl) up +0.62 (+1.06%) at 59.09 (YTD: 30.13%; 5YR: -43.9%)
Gold ($/ozt) up +7.34 (+0.53%) at 1391.49 (YTD: 8.50%; 5YR: 4.9%)
Copper ($/mt) down -38.50 (-0.64%) at 5954.50 (YTD: -0.18%; 5YR: -15.2%)

Data sourced from Bloomberg as of the close of last trading day.
YTD = Year-to-date return; 5YR = five year return

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros