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28 June 2019

28/06/2019

Market Data and Morning Chat

Morning Chat

Not so hot a day on the Continent: Yes, maybe temperatures were topping 40°C, but European stock markets were decidedly cool. No doubt TV screens capturing US President Trump’s arrival for the G20 summit on a wet and windy Japanese tarmac helped dampen the day. Both the FTSE100 (down 0.21%) and CAC (down 0.17%) closed in negative territory, while the DAX (+0.29%) and MIB (+0.26%) struggled to make much headway. Now, the heat is on to see if the US-China trade talks can be re-energised to reach a deal when Presidents Xi & Trump meet on neutral ground this weekend.

Some signs to be happy about though: While Europe remained focused on the talks, there were a few economic indicators helping markets in the Americas have a better day. The big one was confirmation US Q1 GDP was indeed 3.1%. OK, so we knew already, but the confirmation did add support to US sentiment with mid-cap indices (indicators of performance of mid-range size companies) rallying 1-2%. Also, Argentina’s market rallied 3.0% as their consumer confidence data was the strongest in over a year and the balance of trade improved along with Mexico’s trade balance too. Small things, but good news.

Not quite as tasty as hoped: Conagra was unfortunately the worst S&P name yesterday falling 12.1% after releasing disappointing earnings. Conagra generated solid numbers in the Pinnacle business it bought last year, beating both net sales and margin guidance. However, their legacy business suffered from “aggressive competitive activity” against their Marie Callendar range and input pricing issues at Chef Boyardee and Hunt amongst other matters. Combined, the issues cut volumes and hence revenues. On the plus side, Conagra did generate robust pricing, improved operating margins, and they offered high hopes for their Gardien plant-based meat-substitute range given current eating trends.

Walgreens Boots, up 4.1%, puts the right foot forward beating revenue and earnings forecasts
Greene King pulled more than a pint-sized 2.9% rise in sales to put a 5.5% head on shares.
Design guru Jony Ive pares back Apple by 0.9% on his departure to set up his own firm
On a further round-up of the news, Bayer shares rallied 8.7% on possible glyphosate settlement

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +5.60 (+0.45%) at 1,255 (YTD: 15.79%; 5YR: 50.3%)
MSCI AC World Equities (USD) up +36.22 (+0.40%) at 9,072 (YTD: 16.73%; 5YR: 41.0%)
Barclays Global Aggregate Bonds up +0.35 (+0.07%) at 505 (YTD: 5.39%; 5YR: 6.2%)

Selected Equity Indices (Capital returns)
S&P 500 up +11.14 (+0.38%) at 2,925 (YTD: 16.68%; 5YR: 49.2%)
NASDAQ up +57.78 (+0.73%) at 7,968 (YTD: 20.08%; 5YR: 81.2%)
Euro STOXX 50 down -0.57 (-0.02%) at 3,442 (YTD: 14.69%; 5YR: 6.6%)
FTSE 100 down -14.06 (-0.19%) at 7,402 (YTD: 10.02%; 5YR: 9.5%)
CAC 40 down -7.11 (-0.13%) at 5,494 (YTD: 16.13%; 5YR: 23.8%)
DAX up +25.71 (+0.21%) at 12,271 (YTD: 16.21%; 5YR: 25.0%)
Nikkei 225 up +251.58 (+1.19%) at 21,338 (YTD: 6.61%; 5YR: 41.4%)
Hang Seng up +399.44 (+1.42%) at 28,621 (YTD: 10.74%; 5YR: 23.3%)
MSCI Emerging Markets up +6.95 (+0.66%) at 1,055 (YTD: 9.22%; 5YR: 0.8%)

Selected Government Bond Yields
US 10 Year down -0.04 at 2.01 (began the year at 2.69; 5 years ago it was 2.54)
US 2 Year down -0.04 at 1.73 (began the year at 2.50; 5 years ago it was 0.46)
UK 10 Year up +0.02 at 0.83 (began the year at 1.27; 5 years ago it was 2.64)
Germany 10 Year down -0.01 at -0.32 (began the year at 0.24; 5 years ago it was 1.27)
France 10 Year down -0.01 at 0.01 (began the year at 0.71; 5 years ago it was 1.61)
Italy 10 Year down -0.01 at 2.13 (began the year at 2.75; 5 years ago it was 2.72)
Japan 10 Year down 0.00 at -0.15 (began the year at -0.01; 5 years ago it was 0.55)
Barclays EM Basket down -0.04 at 4.84 (began the year at 5.98; 5 years ago it was 4.58)

Selected Currencies
$ strengthened -0.0008 versus € (-0.07%) at 1.1369 ($: YTD: -0.55%; 5YR: -16.7%)
€ weakened +0.0007 versus £ (+0.06%) at 1.1151 (€: YTD: 0.08%; 5YR: -10.6%)
$ strengthened -0.0001 versus £ (-0.01%) at 1.2677 ($: YTD: -0.47%; 5YR: -25.5%)
¥ weakened +0.1350 versus $ (+0.13%) at 107.7750 (¥: YTD: -1.77%; 5YR: 6.3%)

Selected Commodities
Brent Crude ($/bbl) up +0.08 (+0.12%) at 66.53 (YTD: 31.56%; 5YR: -41.5%)
WTI Crude ($/bbl) up +0.01 (+0.02%) at 59.40 (YTD: 31.56%; 5YR: -43.8%)
Gold ($/ozt) down -1.45 (-0.10%) at 1402.50 (YTD: 9.66%; 5YR: 6.5%)
Copper ($/mt) down -52.50 (-0.87%) at 5953.50 (YTD: -0.19%; 5YR: -14.7%)

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