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10 July 2019

10/07/2019

Market Data and Morning Chat

Morning Chat

Copper load of this: The FTSE100 slipped 0.17% yesterday – not too much. Some slippage probably came in anticipation of what Fed chairman Jerome Powell might say today as an indication of the future for US rates. Odds remain at effectively 100% for a rate cut at the July 31 FOMC meeting, but Powell’s speech could either temper or reinforce opinions. The FTSE100 also slipped on the continuing weakness in the copper price digging into the miners and Tui & Easyjet shares losing altitude thanks to the new French tax on fights and concern the weaker pound makes holidays more expensive.

DAX’d upon the rocks: The DAX was also suffered yesterday, though losing bit more than the FTSE100, falling 0.85%. Yes, US rate expectations played a part, but domestic names very much factored in. Deutsche Bank, after triggering its massive restructuring programme fell again, down 4.2% for a total 12.7% decline since Monday morning to €6.50 (and May 2007 it was nearly €111!). BASF, after tumbling closed 3.3% driven lower over weak auto sector demand. Meanwhile, Fresenius Medical declined 5.4% after Donald Trump announced a bitter pill with revisions to how Medicare payments for dialysis are targeted. All very stock specific.

Not wheelie much better: The CAC index completed the European triumvirate, down 0.16%. Rates were a factor, but so too a range of auto stocks. Parts-maker Valeo (-4.3%), Peugeot (-2.4%), Renault (-2.3%) and tire-maker Michelin (-2.1%) are all caught up in BASF’s news that global auto-production was looking at a significant global decline. The four were all amongst the six worst performing French stocks. The others, Steel-maker Arcelor Mittal (-5.5%) and Oil services company TechnipFMC (-2.3%) declined on weakness in their underlying commodities. With those sector-specific declines, it makes you wonder if the rate concerns were really that big a factor.

The Italian MIB actually gained 0.18% despite May’s retail sales numbers down 0.7% from April
It worked out that US weekly jobless claims fell more than forecast – good job!
… but the JOLTS (job openings) report was ever so slightly below forecast at 7.323million
For Corbyn to lose one Labour peer last night may be regarded as misfortune, but losing three?
UK ambassador Sir Kim Darroch, was unsurprisingly persona non grata at White House dinner
While like the Ambassador, Netflix loses Friends… and the Office – it’s two most popular shows

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +0.03 (+0.00%) at 1,273 (YTD: 17.48%; 5YR: 52.6%)
MSCI AC World Equities (USD) down -2.22 (-0.02%) at 9,191 (YTD: 18.26%; 5YR: 43.3%)
Barclays Global Aggregate Bonds down -0.82 (-0.16%) at 503 (YTD: 4.95%; 5YR: 5.7%)

Selected Equity Indices (Capital returns)
S&P 500 up +3.68 (+0.12%) at 2,980 (YTD: 18.86%; 5YR: 51.7%)
NASDAQ up +43.35 (+0.54%) at 8,142 (YTD: 22.70%; 5YR: 85.2%)
Euro STOXX 50 down -14.01 (-0.40%) at 3,510 (YTD: 16.94%; 5YR: 11.4%)
FTSE 100 down -12.80 (-0.17%) at 7,536 (YTD: 12.01%; 5YR: 13.0%)
nlowson1 down -17.09 (-0.31%) at 5,572 (YTD: 17.79%; 5YR: 29.5%)
DAX down -106.96 (-0.85%) at 12,437 (YTD: 17.78%; 5YR: 28.8%)
Nikkei 225 down -31.67 (-0.15%) at 21,533 (YTD: 7.59%; 5YR: 41.5%)
Hang Seng up +72.71 (+0.26%) at 28,189 (YTD: 9.07%; 5YR: 21.3%)
MSCI Emerging Markets down -3.78 (-0.36%) at 1,042 (YTD: 7.94%; 5YR: -1.9%)

Selected Government Bond Yields
US 10 Year up +0.02 at 2.09 (began the year at 2.68; 5 years ago it was 2.54)
US 2 Year up +0.01 at 1.92 (began the year at 2.49; 5 years ago it was 0.45)
UK 10 Year up +0.01 at 0.72 (began the year at 1.28; 5 years ago it was 2.63)
Germany 10 Year up +0.02 at -0.33 (began the year at 0.24; 5 years ago it was 1.20)
France 10 Year up +0.02 at -0.03 (began the year at 0.70; 5 years ago it was 1.64)
Italy 10 Year up +0.02 at 1.75 (began the year at 2.74; 5 years ago it was 2.94)
Japan 10 Year up +0.02 at -0.13 (began the year at -0.01; 5 years ago it was 0.54)
Barclays EM Basket up +0.01 at 5.87 (began the year at 6.22; 5 years ago it was 5.28)

Selected Currencies
$ strengthened +0.0003 versus € (+0.03%) at 1.1206 ($: YTD: 2.15%; 5YR: 17.6%)
€ strengthened +0.0013 versus £ (-0.12%) at 1.1108 (€: YTD: 0.20%; 5YR: 13.3%)
$ strengthened +0.0019 versus £ (+0.15%) at 1.2448 ($: YTD: 2.34%; 5YR: 27.3%)
¥ weakened -0.1100 versus $ (-0.10%) at 108.9200 (¥: YTD: -0.68%; 5YR: -7.0%)

Selected Commodities
Brent Crude ($/bbl) up +0.36 (+0.56%) at 64.60 (YTD: 21.50%; 5YR: -40.0%)
WTI Crude ($/bbl) up +0.17 (+0.29%) at 57.83 (YTD: 27.35%; 5YR: -43.5%)
Gold ($/ozt) down -6.51 (-0.47%) at 1391.08 (YTD: 8.47%; 5YR: 4.1%)
Copper ($/mt) down -70.00 (-1.19%) at 5822.00 (YTD: -2.40%; 5YR: -18.3%)

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