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15 July 2019

15/07/2019

Market Data and Morning Chat

Morning Chat

Well, at least the US had a good week: Asian and European equities saw red last week. The FTSE100 fell 0.62%, CAC 0.37%, and DAX by a disappointing 1.95%. Italy’s MIB broke ranks rising 0.90%. in Asia, the CSI300 fell 2.17% and Topix 0.85%. Meanwhile, the S&P500 rallied 0.46%. Yes, there was concern over the upcoming Fed meeting and the direction of US rates, but Germany suffered thanks to Deutsche Bank’s woes and the Medicare hit to Fresenius. BASF’s weak auto sector news hit Europe in general, while the US rallied on Fed chairman Powell’s dovish speech and inflation news.

Anything to boost this week? The Fed rate meeting isn’t until the 31st, so we’ll likely see most US news assessed for its rate impact until then. So, this week, the US retail sales (+0.4% expected), industrial production (+1.7% expected) and housing data could trigger such interpretations. On this side of the pond, the UK will see unemployment and wage data – with wages growth expected at +3.3% year-on-year or 1.3% in real-terms. China will be a focus too after today’s lower-than-expected 6.2% Q2 GDP growth – the lowest since the 90’s – were countered by better-than-expected retail sales and industrial production.

Poll dancing: By next Sunday the Conservative leadership vote will close, and within a few days we’ll know if Boris Johnson has actually done what some say he has done already – won. Showing his strength, yesterday he received the support of 68 Tory association chairmen and women. Moreover, his effect is already apparent in the national polling data, with both the Tories and Labour seeing the slide in their numbers decidedly turn. Over the last five polls (to Sunday), the Conservatives are averaging 24.0%, Labour 24.6%, the Brexit party 20.3% and Lib-Dems 17.6%. Those numbers certainly keep any majority unlikely.

Tomorrow, Ursula von der Leyen faces her tough confirmation vote for EU commission president.
There was something wrong in the sequence of Illumina’s earnings sending shares down over 16%
… also meant AstraZeneca (-0.91%) and Glaxo (-0.53%) took 4.7points off the FTSE100 Friday
Persimmon (+4.6%) leads UK housebuilders as they put up decent gains on optimistic outlooks
US trucking firms drive to top of the S&P Friday after competitor LME crashes out of business

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +2.72 (+0.21%) at 1,281 (YTD: 18.23%; 5YR: 52.7%)
MSCI AC World Equities (USD) up +31.13 (+0.34%) at 9,271 (YTD: 19.29%; 5YR: 44.0%)
Barclays Global Aggregate Bonds up +0.06 (+0.01%) at 502 (YTD: 4.90%; 5YR: 5.8%)

Selected Equity Indices (Capital returns)
S&P 500 up +13.86 (+0.46%) at 3,014 (YTD: 20.22%; 5YR: 52.7%)
NASDAQ up +48.10 (+0.59%) at 8,244 (YTD: 24.25%; 5YR: 86.7%)
Euro STOXX 50 up +0.90 (+0.03%) at 3,498 (YTD: 16.53%; 5YR: 10.9%)
FTSE 100 down -3.85 (-0.05%) at 7,506 (YTD: 11.56%; 5YR: 11.9%)
CAC up +20.91 (+0.38%) at 5,573 (YTD: 17.80%; 5YR: 29.4%)
DAX down -8.80 (-0.07%) at 12,323 (YTD: 16.71%; 5YR: 26.8%)
Nikkei 225 up +42.37 (+0.20%) at 21,686 (YTD: 8.35%; 5YR: 40.9%)
Hang Seng up +30.89 (+0.11%) at 28,503 (YTD: 10.28%; 5YR: 21.5%)
MSCI Emerging Markets down -4.25 (-0.40%) at 1,051 (YTD: 8.81%; 5YR: -1.4%)

Selected Government Bond Yields
US 10 Year up +0.01 at 2.13 (began the year at 2.68; 5 years ago it was 2.55)
US 2 Year up +0.00 at 1.85 (began the year at 2.49; 5 years ago it was 0.48)
UK 10 Year down 0.00 at 0.84 (began the year at 1.28; 5 years ago it was 2.64)
Barclays EM Basket up +0.02 at 5.88 (began the year at 6.22; 5 years ago it was 5.29)

Selected Currencies
$ weakened -0.0003 versus € (-0.03%) at 1.1271 ($: YTD: 1.58%; 5YR: 16.9%)
€ strengthened +0.0003 versus £ (-0.03%) at 1.1150 (€: YTD: -0.18%; 5YR: 13.3%)
$ unchanged 0.0000 versus £ (0.00%) at 1.2567 ($: YTD: 1.40%; 5YR: 26.7%)
¥ weakened -0.1000 versus $ (-0.09%) at 108.0300 (¥: YTD: -1.51%; 5YR: -5.9%)

Selected Commodities
Brent Crude ($/bbl) down -0.23 (-0.34%) at 67.01 (YTD: 26.03%; 5YR: -36.3%)
WTI Crude ($/bbl) up +0.01 (+0.02%) at 60.21 (YTD: 32.59%; 5YR: -40.3%)
Gold ($/ozt) down -1.50 (-0.11%) at 1414.25 (YTD: 10.28%; 5YR: 9.3%)
Copper ($/mt) down -20.00 (-0.34%) at 5935.00 (YTD: -0.50%; 5YR: -17.1%)

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