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25 June 2019

25/06/2019

Market Data and Morning Chat

Morning Chat

Well that’s novel: The UK Office of National Statistics has been developing something new… “faster indicators of economic activity”. It’s early days though. The indicators look at VAT returns, road traffic sensor & automated shipping identification data. Since much of the data comes from automated systems, it gives a, well, faster indication of economic activity or at least warning signs. For example, more heavy trucks implies greater trade in goods and less… less. The latest release saw stable shipping and trucking numbers, good, and an increase in VAT returns, better. It may foreshadow a bounce-back in activity after April’s slowdown.

Teetering in the middle: Equities were mixed yesterday with some indices up and others down. Look to the Middle East and you see continuing geopolitical tensions over Iran with possible new US sanctions. Moving west, Germany’s IFO Business Climate index fell again to its lowest level in 5 years. Further west – Texas-west – and the Dallas Fed’s Manufacturing Index fell to a 3-year low. But the Chicago Fed’s National Activity index rose. Gold rallied. Moreover, odds of a Fed rate cut remain high. Looks like we’ll just have to focus on today’s US Durable Goods to see if scales are tipped.

Daylight robbery: In 1696, a cash-strapped William III introduced a UK tax on the number of windows a house had. It wasn’t repealed until 1851 and its why many houses from the period have false windows. The German government looks like they may be on to another near-unavoidable money-generating scheme. German bonds out to a duration slightly more than 15-years offer a negative yield – you pay to hold a German government IOU – and only get 0.06% for 20-years while the 30-year yield was sashed – er, slashed – by half in the last month alone to 0.267%. Makes an investor shutter, er, shudder.

Daimler drove the DAX index and other auto stocks lower by cutting their 2019 earnings outlook
Labour shadow chancellor McDonnell trotskied out a plan to delist companies if not green enough
EU competition chief Margarethe Vestager chipped in with a new €977million fine for Qualcomm
The Swiss might ban EU exchanges trading Swiss stocks if EU don’t continue equivalence

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -1.80 (-0.14%) at 1,259 (YTD: 16.21%; 5YR: 51.0%)
MSCI AC World Equities (USD) up +0.38 (+0.00%) at 9,117 (YTD: 17.31%; 5YR: 42.0%)
Barclays Global Aggregate Bonds up +2.04 (+0.40%) at 505 (YTD: 5.50%; 5YR: 6.5%)

Selected Equity Indices (Capital returns)
S&P 500 down -5.11 (-0.17%) at 2,945 (YTD: 17.49%; 5YR: 50.3%)
NASDAQ down -26.01 (-0.32%) at 8,006 (YTD: 20.65%; 5YR: 82.8%)
Euro STOXX 50 down -11.35 (-0.33%) at 3,456 (YTD: 15.13%; 5YR: 6.2%)
FTSE 100 up +9.19 (+0.12%) at 7,417 (YTD: 10.23%; 5YR: 10.1%)
CAC 40 down -6.62 (-0.12%) at 5,522 (YTD: 16.72%; 5YR: 23.8%)
DAX down -65.35 (-0.53%) at 12,275 (YTD: 16.25%; 5YR: 24.4%)
Nikkei 225 down -92.18 (-0.43%) at 21,194 (YTD: 5.89%; 5YR: 38.8%)
Hang Seng down -360.63 (-1.26%) at 28,152 (YTD: 8.92%; 5YR: 23.1%)
MSCI Emerging Markets down -0.17 (-0.02%) at 1,053 (YTD: 9.04%; 5YR: 1.1%)

Selected Government Bond Yields
US 10 Year down -0.01 at 2.00 (began the year at 2.68; 5 years ago it was 2.56)
US 2 Year down -0.02 at 1.72 (began the year at 2.49; 5 years ago it was 0.48)
UK 10 Year down -0.03 at 0.82 (began the year at 1.28; 5 years ago it was 2.65)
Germany 10 Year down -0.01 at -0.31 (began the year at 0.24; 5 years ago it was 1.26)
France 10 Year down -0.01 at 0.02 (began the year at 0.70; 5 years ago it was 1.70)
Italy 10 Year down -0.13 at 2.02 (began the year at 2.74; 5 years ago it was 2.85)
Japan 10 Year down -0.01 at -0.17 (began the year at -0.01; 5 years ago it was 0.57)
Barclays EM Basket down 0.00 at 5.89 (began the year at 6.22; 5 years ago it was 5.29)

Selected Currencies
$ weakened -0.0013 versus € (-0.11%) at 1.1402 ($: YTD: 0.44%; 5YR: 16.4%)
€ weakened -0.0004 versus £ (+0.04%) at 1.1186 (€: YTD: -0.50%; 5YR: 11.3%)
$ weakened -0.0018 versus £ (-0.14%) at 1.2755 ($: YTD: -0.07%; 5YR: 24.9%)
¥ strengthened +0.3700 versus $ (+0.35%) at 106.9700 (¥: YTD: -2.51%; 5YR: -4.9%)

Selected Commodities
Brent Crude ($/bbl) down -0.13 (-0.20%) at 64.26 (YTD: 20.86%; 5YR: -43.5%)
WTI Crude ($/bbl) up +0.42 (+0.73%) at 57.70 (YTD: 27.06%; 5YR: -45.9%)
Gold ($/ozt) up +7.64 (+0.54%) at 1427.38 (YTD: 11.30%; 5YR: 8.2%)
Copper ($/mt) down -11.00 (-0.18%) at 5960.00 (YTD: -0.08%; 5YR: -13.4%)

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