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14 June 2019

14/06/2019

Market Data and Morning Chat

Morning Chat

You know how I said…: Oil inventories are unseasonably rising. Consequentially, oil prices tumbled markedly Wednesday following the unexpected inventory build reported by the American Petroleum Institute. The Energy Information Administration issued similar data yesterday – a 2.2million barrel build – but the oil price rallied2-2.2% (closer to 4% at one point). The driver was another attack on oil tankers in the Middle East Gulf of Oman. Reports vary, but one’s on fire and causal possibilities included a mine or torpedo by someone as yet unconfirmed, but many see Iran culpable. Intriguingly, the previous attacks came when oil prices fell too.

Echoes of Agatha Christie: …and then there were seven. The Tories had the first round of voting and Andrea Leadsom, Esther McVey and Mark Harper’s leadership hopes were killed off. Boris Johnson – as has been expected at this stage – led with 114 votes (36% of the total). Jeremy Hunt and Michael Gove (43 and 37 votes respectively) came next and are the only ones with some comfort to clear the 33-vote hurdle of round two. Votes for perceived more hard-Brexit candidates (Johnson, Raab, Leadsom & McVey) tallied 48.6% of the 313 Conservative MP’s. That might exercise the little grey cells.

Uplifting stocks help the S&P: The oil price rally didn’t actually help European energy sector stocks. Rather European indices rose thanks to banks and infrastructure names. However, US energy stocks did help the S&P500 (+0.4%) although one sector you would not expect be the best with rising oil prices is transportation. Surprisingly though, American (+6.4%) and United Airlines (+4.0%) flew as analysts upped fare expectations helping the sector up 1.0%. In another flight of fantasy, Tinkerbell’s pixie dust continued to lift Disney (+4.3%) as a key analyst upgrade on the company’s streaming prospects boosted shares to an all-time high $141.74.

Chip-maker Broadcom’s shares crack, falling 8.5% on lower full-year guidance and revenue miss.
Fiverr – an online site for gig economy workers – jumped 97% on day one of its IPO – day two?
By the dark arts of Voldemort – new Universal Harry Potter ride opens with 10-hour queue
After 51 years of waiting the St Louis Blues beat the Boston Bruins to win their first Stanley Cup!
… While the Toronto Raptors topple the Golden State Warriors to win first ever NBA title!

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +2.39 (+0.19%) at 1,238 (YTD: 14.31%; 5YR: 49.0%)
MSCI AC World Equities (USD) up +12.86 (+0.14%) at 8,941 (YTD: 15.05%; 5YR: 40.2%)
Barclays Global Aggregate Bonds down -0.14 (-0.03%) at 499 (YTD: 4.26%; 5YR: 6.0%)

Selected Equity Indices (Capital returns)
S&P 500 up +11.80 (+0.41%) at 2,892 (YTD: 15.35%; 5YR: 49.3%)
NASDAQ up +44.41 (+0.57%) at 7,837 (YTD: 18.11%; 5YR: 81.8%)
Euro STOXX 50 up +3.87 (+0.11%) at 3,391 (YTD: 12.96%; 5YR: 3.3%)
FTSE 100 up +0.95 (+0.01%) at 7,369 (YTD: 9.52%; 5YR: 8.7%)
CAC 40 up +0.71 (+0.01%) at 5,376 (YTD: 13.63%; 5YR: 18.3%)
DAX up +53.37 (+0.44%) at 12,169 (YTD: 15.25%; 5YR: 22.8%)
Nikkei 225 up +84.89 (+0.40%) at 21,117 (YTD: 5.51%; 5YR: 39.9%)
Hang Seng down -154.12 (-0.56%) at 27,141 (YTD: 5.01%; 5YR: 16.4%)
MSCI Emerging Markets down -4.15 (-0.40%) at 1,022 (YTD: 5.83%; 5YR: -2.6%)

Selected Government Bond Yields
US 10 Year down -0.02 at 2.08 (began the year at 2.68; 5 years ago it was 0.00)
US 2 Year down -0.01 at 1.83 (began the year at 2.49; 5 years ago it was 0.00)
UK 10 Year down -0.03 at 0.84 (began the year at 1.28; 5 years ago it was 0.00)
Germany 10 Year down -0.01 at -0.25 (began the year at 0.24; 5 years ago it was 0.00)
France 10 Year down -0.01 at 0.10 (began the year at 0.70; 5 years ago it was 0.00)
Italy 10 Year down -0.03 at 2.32 (began the year at 2.74; 5 years ago it was 0.00)
Japan 10 Year down -0.01 at -0.13 (began the year at -0.01; 5 years ago it was 0.00)
Barclays EM Basket down -0.02 at 6.04 (began the year at 6.22; 5 years ago it was 0.00)

Selected Currencies
$ strengthened +0.0001 versus € (+0.01%) at 1.1275 ($: YTD: 1.55%; 5YR: 16.7%)
€ strengthened +0.0002 versus £ (-0.02%) at 1.1242 (€: YTD: -1.00%; 5YR: 11.5%)
$ strengthened +0.0005 versus £ (+0.04%) at 1.2674 ($: YTD: 0.56%; 5YR: 25.3%)
¥ strengthened +0.1400 versus $ (+0.13%) at 108.3100 (¥: YTD: -1.25%; 5YR: -5.8%)

Selected Commodities
Brent Crude ($/bbl) up +0.12 (+0.19%) at 62.46 (YTD: 17.47%; 5YR: -44.6%)
WTI Crude ($/bbl) up +1.14 (+2.23%) at 52.28 (YTD: 15.13%; 5YR: -51.1%)
Gold ($/ozt) up +10.32 (+0.77%) at 1352.62 (YTD: 5.47%; 5YR: 5.9%)
Copper ($/mt) up +6.00 (+0.10%) at 5858.00 (YTD: -1.79%; 5YR: -12.0%)

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