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4 July 2019

04/07/2019

Market Data and Morning Chat

Morning Chat

Happy Independence Day: Americans will be celebrating their holiday today, so no wonder there was thin trading on their markets yesterday. Overall, it was a reasonable day for the S&P500, up 0.8%. Surprising, maybe, when you consider some economic data releases – but dig deeper and maybe not. Factory orders fell 0.7% – more than expected – but then ex transport orders were up and we know Boeing has been having problems. The ISM non-manufacturing index slipped to 55.1 from 56.9 – again, lower-than-expected – but the Markit services PMI was a better-than-expected 51.5. Adding ok ADP employment data on top gives the holiday cheer.

Wait, wait, wait, that doesn’t add up does it? A 0.8% gain in the S&P500, alongside a +0.8% for the FTSE100, +1.0% for the DAX and +1.0% for the CAC seems a lot for mixed data. Probably. To be fair, European markets gained some ground on the successful horse-trading to select the senior EU candidates. They may not get ratified but it’s a start. But the US? Especially with the trade deficit widening. Well, it points to an economy that’s growing, only modestly slower than it was, and a Fed rate cut would help it along. Now that should tally.

Doritos prices might avoid a dip: The Commodity Research Bureau’s Spot Foodstuff index generally rises over the first half of the year, steadies, then falls. 2019’s trends are broadly in line. Some commodities see price spikes, albeit usually following seasonal trends. For example, lean hogs and pork bellies rallied more than usual over Chinese swine flu, but when they should. However, Corn, unusually and against trend, popped from the lowest levels in 5 years to the highest on poor crop data driven by excess US rainfall and too little in Europe. Last time this happened heralded a run-up in inflation.

Latest UK YouGov poll puts Tories on 24%, Brexit party 23%, Lib-Dems 20% and Labour.. 18%!
Tate & Lyle shares sweeten by 1.7% on possible review of sugar tax
AB Foods up 0.3% on reaffirmed guidance after sales had a dressing-down from soggy May
Purplebricks blue about being in the red and opting to exit the US

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +6.94 (+0.54%) at 1,281 (YTD: 18.27%; 5YR: 51.3%)
MSCI AC World Equities (USD) up +63.49 (+0.69%) at 9,271 (YTD: 19.29%; 5YR: 42.2%)
Barclays Global Aggregate Bonds up +1.49 (+0.29%) at 506 (YTD: 5.75%; 5YR: 7.0%)

Selected Equity Indices (Capital returns)
S&P 500 up +22.81 (+0.77%) at 2,996 (YTD: 19.51%; 5YR: 50.9%)
NASDAQ up +61.14 (+0.75%) at 8,170 (YTD: 23.13%; 5YR: 82.1%)
Euro STOXX 50 up +32.65 (+0.93%) at 3,541 (YTD: 17.97%; 5YR: 8.3%)
FTSE 100 up +50.13 (+0.66%) at 7,609 (YTD: 13.10%; 5YR: 10.8%)
CAC 40 up +41.99 (+0.75%) at 5,619 (YTD: 18.77%; 5YR: 25.7%)
DAX up +89.52 (+0.71%) at 12,616 (YTD: 19.48%; 5YR: 26.0%)
Nikkei 225 up +64.29 (+0.30%) at 21,702 (YTD: 8.43%; 5YR: 40.6%)
Hang Seng down -7.14 (-0.02%) at 28,848 (YTD: 11.62%; 5YR: 22.5%)
MSCI Emerging Markets down -4.01 (-0.38%) at 1,060 (YTD: 9.72%; 5YR: -0.3%)

Selected Government Bond Yields
US 10 Year unchanged at 1.95 (began the year at 2.68; 5 years ago it was 2.64)
US 2 Year unchanged at 1.76 (began the year at 2.49; 5 years ago it was 0.51)
UK 10 Year down -0.03 at 0.69 (began the year at 1.28; 5 years ago it was 2.76)
Germany 10 Year up +0.02 at -0.36 (began the year at 0.24; 5 years ago it was 1.26)
France 10 Year up +0.05 at -0.05 (began the year at 0.70; 5 years ago it was 1.70)
Italy 10 Year up +0.30 at 1.89 (began the year at 2.74; 5 years ago it was 2.83)
Japan 10 Year up +0.01 at -0.15 (began the year at -0.01; 5 years ago it was 0.57)
Barclays EM Basket down -0.02 at 5.84 (began the year at 6.22; 5 years ago it was 5.31)

Selected Currencies
$ weakened -0.0003 versus € (-0.03%) at 1.1284 ($: YTD: 1.47%; 5YR: 17.0%)
€ strengthened +0.0001 versus £ (-0.01%) at 1.1147 (€: YTD: -0.15%; 5YR: 13.3%)
$ weakened -0.0003 versus £ (-0.02%) at 1.2578 ($: YTD: 1.32%; 5YR: 26.7%)
¥ strengthened +0.0300 versus $ (+0.03%) at 107.8000 (¥: YTD: -1.73%; 5YR: -5.3%)

Selected Commodities
Brent Crude ($/bbl) down -0.89 (-1.40%) at 62.64 (YTD: 17.81%; 5YR: -42.9%)
WTI Crude ($/bbl) up +1.09 (+1.94%) at 57.34 (YTD: 26.27%; 5YR: -44.9%)
Gold ($/ozt) down -4.49 (-0.32%) at 1414.22 (YTD: 10.27%; 5YR: 7.1%)
Copper ($/mt) up +31.00 (+0.53%) at 5918.00 (YTD: -0.79%; 5YR: -17.5%)

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