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21 March 2019

21/03/2019

Morning Chat and Market Data

Morning Chat 

Delays in the departure lounge: Release your breath, Labour and Conservatives apparently agree on something! Both concur the Article 50 extension request cannot go beyond June 30.  Theresa May has written to EU Council President Donald Tusk stating she needs more time to ratify the divorce deal and requests the March 29 deadline be pushed to June 30. The pound doesn’t like it, slipping to $1.3205. Moreover, the EU stated the extension either be to May 23 or much longer and the UK must participate in EU elections. If a week’s a long time in politics are five much longer?  

Bored of Brexit? How about market news: European markets had an offish day. The FTSE100 was -0.22%, CAC -0.71% and DAX, with a few headaches, fell -1.84%. Across the Atlantic, the S&P500 slipped 0.31% as the Fed signalled probably no more rate hikes this year. Here in the UK, we saw a slight increase in consumer inflation on recreation prices – dining out, movies and such – but the 1.9% annual pace was much as expected. +1.4% EU industrial production month-on-month was better-than-expected good news. US durable goods orders and 229,000 initial jobless claims were marginally disappointing, but better construction spending helped.

Not the best day Leverkusen and München stars: Sorry to mislead Bundesliga fans, the stars in question are Bayer and BMW; shares of both tumbled yesterday. Bayer by 9.61% – their biggest one-day decline in 16 years – after a San Francisco, California, jury ruled unanimously against them. It means Bayer is down 2-0 to plaintiffs in cases considering if Roundup weed killer (acquired when Bayer bought Monsanto) is carcinogenic. BMW shares fell 4.94% following a profits warning.  The Bavarian automaker announced if economic conditions don’t improve, they expect 2019 earnings to fall well below 2018’s on increased electric vehicle R&D costs.

The EU fined Google a larger-then-expected £1.28billion for anti-competitive practices (bringing total fines to £7billion); company shares didn't care though rallying 2.1%.


Market Data 


Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -4.22 (-0.35%) at 1,217 (YTD: 12.35%; 5YR: 54.8%)
MSCI AC World Equities (USD) down -38.80 (-0.44%) at 8,757 (YTD: 12.68%; 5YR: 44.8%)
Barclays Global Aggregate Bonds up +0.81 (+0.17%) at 487 (YTD: 1.70%; 5YR: 5.1%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -8.34 (-0.29%) at 2,824 (YTD: 12.66%; 5YR: 51.3%)
NASDAQ up +5.02 (+0.07%) at 7,729 (YTD: 16.48%; 5YR: 80.7%)
Euro STOXX 50 down -36.62 (-1.07%) at 3,372 (YTD: 12.36%; 5YR: 8.9%)
FTSE 100 down -32.99 (-0.45%) at 7,291 (YTD: 8.37%; 5YR: 11.2%)
CAC 40 down -43.24 (-0.80%) at 5,383 (YTD: 13.78%; 5YR: 24.2%)
DAX down -184.52 (-1.57%) at 11,604 (YTD: 9.90%; 5YR: 24.2%)
Nikkei 225  up +42.07 (+0.20%) at 21,609 (YTD: 7.96%; 5YR: 51.9%)
Hang Seng down -216.39 (-0.74%) at 29,105 (YTD: 12.61%; 5YR: 35.8%)
MSCI Emerging Markets down -2.48 (-0.23%) at 1,068 (YTD: 10.63%; 5YR: 13.1%)
 
Selected Government Bond Yields
US 10 Year down 0.00 at 2.53 (began the year at 2.68; 5 years ago it was 2.74)
US 2 Year down -0.01 at 2.39 (began the year at 2.49; 5 years ago it was 0.42)
UK 10 Year down -0.03 at 1.16 (began the year at 1.28; 5 years ago it was 2.75)
Germany 10 Year down -0.02 at 0.07 (began the year at 0.24; 5 years ago it was 1.63)
France 10 Year down -0.01 at 0.44 (began the year at 0.70; 5 years ago it was 2.16)
Italy 10 Year down -0.03 at 2.49 (began the year at 2.74; 5 years ago it was 3.41)
Japan 10 Year unchanged at -0.05 (began the year at -0.01; 5 years ago it was 0.59)
Barclays EM Basket down -0.03 at 5.99 (began the year at 6.22; 5 years ago it was 5.91)
 
Selected Currencies
$ weakened -0.0068 versus € (-0.60%) at 1.1426 ($: YTD: 0.23%; 5YR: 17.2%)
€ strengthened +0.0043 versus £ (-0.37%) at 1.1556 (€: YTD: -3.69%; 5YR: 3.5%)
$ weakened -0.0021 versus £ (-0.16%) at 1.3204 ($: YTD: -3.59%; 5YR: 20.0%)
¥ strengthened +1.0500 versus $ (+0.95%) at 110.4600 (¥: YTD: 0.72%; 5YR: -7.4%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.27 (+0.40%) at 68.32 (YTD: 28.49%; 5YR: -36.1%)
WTI Crude ($/bbl) up +0.80 (+1.36%) at 59.83 (YTD: 31.76%; 5YR: -39.8%)
Gold ($/ozt) up +7.26 (+0.55%) at 1319.80 (YTD: 2.91%; 5YR: -1.1%)
Copper ($/mt) down -2.00 (-0.03%) at 6457.00 (YTD: 8.25%; 5YR: 0.4%)

 
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