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10 June 2019

10/06/2019

Market Data and Morning Chat

Morning Chat


What a job June’s done so far: Now remember, the standard deviation – or degree of dispersion of estimates – of the US non-farm payrolls means the survey number can be quite far off the mark.  Even so, Friday’s announced 75,000 jobs gain was surprisingly below expectations. You would think a bad jobs number would rattle nerves, but rather it boosted the expectation of a Fed rate cut by July to four chances in five. Couple the jobs data with Mexico’s agreement on curbing migration and stock markets leapt last week by 2½ to 3½% in Europe and 4½% in the US. 

The upcoming days: Can it continue? Well, we get a good range of data over the coming week. As well as the Conservative leadership race kicking off, we’ll find out about industrial production, wages – which have been growing at over 3% – and unemployment in the economy as well as Downing Street. The US offers industrial output along with Job Openings, consumer inflation and retail sales, the latter two having been weak last month. China and Europe also issue Industrial output. We’ve kicked off already with better-than-expected Chinese trade balance, which doubled expectations after imports fell 8.5% and exports surprisingly rose.

And what May have I missed: Last week’s good news helped offset weakness of May (month, not PM). Equities certainly had a rough patch over the apparently deteriorating US-China trade negotiations.  The S&P500 slipped 6.58%, CAC by 6.78%, DAX 5.00% and FTSE100 by 3.46%.  The FTSE was spared somewhat by not rallying as much as the others earlier in the year, and last week’s 2.38% gain offsets much of the decline.  Meanwhile the 2.1% slip in sterling against the dollar and 2.8% versus the Euro helped moderate offshore declines for UK investors, though it was less consolation for non-sterling portfolios.

 

Raytheon and United Tech fire up an all-stock merger to create the #2 US aerospace firm
Asian markets start the week off well on the Mexico tariff agreement and China trade numbers
Japanese Q1 GDP revised up to 0.6% from 0.5%, which doesn't hurt either.

Market Data


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +10.74 (+0.88%) at 1,228 (YTD: 13.38%; 5YR: 46.9%)
MSCI AC World Equities (USD) up +95.55 (+1.09%) at 8,896 (YTD: 14.47%; 5YR: 38.9%)
Barclays Global Aggregate Bonds up +2.05 (+0.41%) at 501 (YTD: 4.52%; 5YR: 6.5%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +29.85 (+1.05%) at 2,873 (YTD: 14.62%; 5YR: 47.3%)
NASDAQ up +126.55 (+1.66%) at 7,742 (YTD: 16.68%; 5YR: 78.5%)
Euro STOXX 50 up +39.97 (+1.20%) at 3,378 (YTD: 12.56%; 5YR: 1.9%)
FTSE 100 up +72.09 (+0.99%) at 7,332 (YTD: 8.97%; 5YR: 6.7%)
CAC 40 up +85.62 (+1.62%) at 5,364 (YTD: 13.39%; 5YR: 16.7%)
DAX up +92.24 (+0.77%) at 12,045 (YTD: 14.08%; 5YR: 20.1%)
Nikkei 225  up +249.71 (+1.20%) at 21,134 (YTD: 5.59%; 5YR: 40.9%)
Hang Seng up +590.39 (+2.19%) at 27,556 (YTD: 6.62%; 5YR: 20.1%)
MSCI Emerging Markets up +4.64 (+0.46%) at 1,007 (YTD: 4.31%; 5YR: -4.7%)
 
Selected Government Bond Yields
US 10 Year up +0.05 at 2.13 (began the year at 2.68; 5 years ago it was 2.64)
US 2 Year up +0.06 at 1.91 (began the year at 2.49; 5 years ago it was 0.44)
UK 10 Year down -0.01 at 0.81 (began the year at 1.28; 5 years ago it was 2.72)
Germany 10 Year up +0.02 at -0.24 (began the year at 0.24; 5 years ago it was 1.40)
France 10 Year up +0.02 at 0.10 (began the year at 0.70; 5 years ago it was 1.76)
Italy 10 Year up +0.02 at 2.37 (began the year at 2.74; 5 years ago it was 2.80)
Japan 10 Year up +0.00 at -0.12 (began the year at -0.01; 5 years ago it was 0.60)
Barclays EM Basket down -0.04 at 6.14 (began the year at 6.22; 5 years ago it was 5.29)
 
Selected Currencies
$ strengthened +0.0030 versus € (+0.26%) at 1.1310 ($: YTD: 1.24%; 5YR: 16.5%)
€ strengthened +0.0006 versus £ (-0.05%) at 1.1235 (€: YTD: -0.93%; 5YR: 10.1%)
$ strengthened +0.0040 versus £ (+0.31%) at 1.2707 ($: YTD: 0.31%; 5YR: 24.2%)
¥ weakened -0.5400 versus $ (-0.50%) at 108.6600 (¥: YTD: -0.92%; 5YR: -5.8%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.14 (+0.22%) at 64.37 (YTD: 21.06%; 5YR: -41.3%)
WTI Crude ($/bbl) up +1.40 (+2.66%) at 53.99 (YTD: 18.89%; 5YR: -47.4%)
Gold ($/ozt) down -13.78 (-1.03%) at 1327.03 (YTD: 3.48%; 5YR: 5.3%)
Copper ($/mt) down -9.00 (-0.15%) at 5799.00 (YTD: -2.78%; 5YR: -13.3%)
 
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