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19 July 2019

19/07/2019

Market Data and Morning Chat

Morning Chat

It's a mixed up, muddled up, shook up world: European equities edged down yesterday – the FTSE100 by 0.56%, DAX 0.92% and CAC 0.38%. The UK and French markets slipped on broad-based declines, although the FTSE100 lost 10 points from Shell & BP alone. In Germany, SAP was the main culprit affecting the whole index. Their shares slipped 5.6% as cloud growth slowed as the company focussed on profitability. Over in the US, the S&P500 worked out the earlier kinks to close up 0.36%. Netflix drove an initial decline, but great numbers from Ebay and Union Pacific bolstered the day’s returns.

What a barrel of fun: Shell & BP didn’t tumbleon their own accord, they fell because oil prices have. Brent and West Texas Intermediate were down 1.7% yesterday for 5.8% and 7.2% this week respectively – about $4 a barrel. A usual culprit for such a decline is the inventory data, but it was fairly on-trend this week. Inventories were expected to decline 2.7million barrels and they more-or-less did. Rather, it was news from US secretary of state Mike Pompeo that Iran approached the US to negotiate and the concomitant appointment of perceived conciliator Senator Rand Paul as chief negotiator.

Warren piece not a tall story: The field of Democratic nominees for the US presidential election has been led by Joe Biden, with Bernie Saunders having name recognition. While overall leaders remain the same, the numbers are changing. Biden started with a solid double-digits lead, but since Kamala Harris’ mauling in the debate, it has slipped to high singles. Policy-light Bernie Saunders has been dropped into third by Elizabeth Warren’s detailed policy approach – including yesterday’s announcement to clamp down on private equity investors – and Kamala Harris is also gaining. There’s something about Warren’s detail approach though that may win through.

MP’s vote last night not be prorogued in October – does that make them anti-rogued? Parliament?
Asos shares got a 23.2% dressing down as operational issues again lead to lower profits
Easyjet shares though soared 4.0% higher on 10.7% higher year-on-year passenger revenue
Morgan Stanley, +1.5%, saw the steepest trading slide of the banks, but revenues were still up 21%
Microsoft shares excelled, up 2.7%, as word has it their earnings beat the highest estimate
Honeywell, +3.1% afterhours, defied trade tensions to manufacture their 8th quarter of 5%+ growth
Philip Morris shares lit up 8.2% despite lower sales volume; profits beat estimates on heated tobacco

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -0.70 (-0.06%) at 1,275 (YTD: 17.64%; 5YR: 51.6%)
MSCI AC World Equities (USD) up +2.49 (+0.03%) at 9,212 (YTD: 18.54%; 5YR: 42.8%)
Barclays Global Aggregate Bonds up +0.85 (+0.17%) at 504 (YTD: 5.33%; 5YR: 6.1%)

Selected Equity Indices (Capital returns)
S&P 500 up +10.69 (+0.36%) at 2,995 (YTD: 19.48%; 5YR: 51.4%)
NASDAQ up +22.03 (+0.27%) at 8,207 (YTD: 23.69%; 5YR: 85.2%)
Euro STOXX 50 down -18.75 (-0.54%) at 3,483 (YTD: 16.04%; 5YR: 10.1%)
FTSE 100 down -42.37 (-0.56%) at 7,493 (YTD: 11.37%; 5YR: 11.0%)
CAC 40 down -21.16 (-0.38%) at 5,551 (YTD: 17.33%; 5YR: 28.0%)
DAX down -113.18 (-0.92%) at 12,228 (YTD: 15.81%; 5YR: 25.8%)
Nikkei 225 down -422.94 (-1.97%) at 21,046 (YTD: 5.15%; 5YR: 38.3%)
Hang Seng down -131.51 (-0.46%) at 28,462 (YTD: 10.12%; 5YR: 21.3%)
MSCI Emerging Markets down -3.18 (-0.30%) at 1,052 (YTD: 8.90%; 5YR: -1.1%)

Selected Government Bond Yields
US 10 Year down -0.03 at 2.04 (began the year at 2.68; 5 years ago it was 2.45)
US 2 Year down -0.05 at 1.78 (began the year at 2.50; 5 years ago it was 0.48)
UK 10 Year down -0.01 at 0.76 (began the year at 1.27; 5 years ago it was 2.57)
Germany 10 Year down -0.02 at -0.31 (began the year at 0.24; 5 years ago it was 1.16)
France 10 Year down -0.02 at -0.06 (began the year at 0.71; 5 years ago it was 1.48)
Italy 10 Year down -0.04 at 1.54 (began the year at 2.75; 5 years ago it was 2.68)
Japan 10 Year down -0.01 at -0.14 (began the year at -0.01; 5 years ago it was 0.53)
Barclays EM Basket up +0.00 at 4.80 (began the year at 5.98; 5 years ago it was 4.65)

Selected Currencies
$ strengthened -0.0007 versus € (-0.06%) at 1.1219 ($: YTD: -1.86%; 5YR: -17.0%)
€ weakened +0.0055 versus £ (+0.50%) at 1.1128 (€: YTD: -0.12%; 5YR: -11.9%)
$ weakened +0.0054 versus £ (+0.43%) at 1.2484 ($: YTD: -1.98%; 5YR: -26.9%)
¥ strengthened -0.2550 versus $ (-0.24%) at 107.8350 (¥: YTD: -1.71%; 5YR: 6.4%)

Selected Commodities
Brent Crude ($/bbl) down -1.66 (-2.61%) at 61.94 (YTD: 22.48%; 5YR: -42.4%)
WTI Crude ($/bbl) down -1.43 (-2.52%) at 55.31 (YTD: 22.50%; 5YR: -46.4%)
Gold ($/ozt) up +7.10 (+0.50%) at 1417.45 (YTD: 10.82%; 5YR: 8.4%)
Copper ($/mt) up +26.00 (+0.44%) at 5948.00 (YTD: -0.28%; 5YR: -15.3%)

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