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17 May 2019

17/05/2019

Market Data and Morning Chat

Morning Chat

Pounded: Three months ago, as the Brexit debates were raging, the pound sank to $1.28. As the chance of a no-deal Brexit started to fall away, sterling rallied, peaking at close to $1.34. Now, with the Brexit party polling numbers soaring the pound is plummeting. We’re now back to that $1.28 level to the dollar again. Versus the Euro, sterling closed lower each day for nine days through yesterday – it’s been nearly 20 years since that happened last. There’s an implication that with the Tory-Labour talks failing to find a solution, the odds of a no-deal Brexit are increasing again.

A good day unless you’re turning Japanese, I really think so: The S&P500 rallied 0.89%, the FTSE100 0.78%, DAX 1.74%, and the CAC 1.37%. It was a similar story for almost all major markets. Only Japan had the vapours, with the Topix down 0.43%. The market felt the effects of US President Donald Trump’s executive order effectively banning the likes of Huawei and LTC from pitching for business in the US if it has a security angle. As the day progressed other markets rallied back the lost ground, but Tokyo had already closed – though it’s recovered 1.3% today so far.

There was something to build on as the day progressed: US housing starts data helped lay a confident foundation for yesterday’s trading. Starts were up 5.7% on the month, slightly more than expected, and the March data was also uprated. The important single-family homebuilding category increased 6.2%. Building permits also saw a slight increase. Then, later in the day, Walmart released earnings with strong e-commerce revenues pushing their numbers above estimates. Moreover, a robust increase in Cisco’s revenues plus upbeat company guidance with the tariffs “baked in” boosted their shares 6.7%. The data reinforced the confident outlook for the day.


Trump’s tariffs are estimated to raise $72billion this year – that’ll help cover his tax cuts bill
Recently public Pinterest posts a ¢32 loss versus the ¢11 expected nailing shares for a 15.4% fall
Nvidia graphically illustrates how an earnings beat helps with shares up 0.4%

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +9.12 (+0.75%) at 1,231 (YTD: 13.63%; 5YR: 52.5%)
MSCI AC World Equities (USD) up +69.92 (+0.79%) at 8,874 (YTD: 14.19%; 5YR: 43.1%)
Barclays Global Aggregate Bonds down -0.80 (-0.16%) at 490 (YTD: 2.33%; 5YR: 3.7%)

Selected Equity Indices (Capital returns)
S&P 500 up +25.36 (+0.89%) at 2,876 (YTD: 14.74%; 5YR: 53.2%)
NASDAQ up +75.90 (+0.97%) at 7,898 (YTD: 19.03%; 5YR: 93.1%)
Euro STOXX 50 up +52.78 (+1.56%) at 3,439 (YTD: 14.56%; 5YR: 8.4%)
FTSE 100 up +56.56 (+0.78%) at 7,354 (YTD: 9.30%; 5YR: 7.3%)
CAC 40 up +73.85 (+1.37%) at 5,448 (YTD: 15.17%; 5YR: 22.3%)
DAX up +210.80 (+1.74%) at 12,310 (YTD: 16.59%; 5YR: 27.8%)
Nikkei 225 up +187.11 (+0.89%) at 21,250 (YTD: 6.17%; 5YR: 50.7%)
Hang Seng down -289.49 (-1.02%) at 27,986 (YTD: 8.28%; 5YR: 23.2%)
MSCI Emerging Markets down -4.83 (-0.47%) at 1,011 (YTD: 4.70%; 5YR: -2.0%)

Selected Government Bond Yields
US 10 Year down -0.02 at 2.38 (began the year at 2.68; 5 years ago it was 0.00)
US 2 Year down -0.02 at 2.18 (began the year at 2.49; 5 years ago it was 0.00)
UK 10 Year up +0.01 at 1.07 (began the year at 1.28; 5 years ago it was 0.00)
Germany 10 Year down -0.01 at -0.11 (began the year at 0.24; 5 years ago it was 0.00)
France 10 Year down -0.01 at 0.28 (began the year at 0.70; 5 years ago it was 0.00)
Italy 10 Year up +0.00 at 2.68 (began the year at 2.74; 5 years ago it was 0.00)
Japan 10 Year up +0.01 at -0.06 (began the year at -0.01; 5 years ago it was 0.00)
Barclays EM Basket up +0.04 at 6.15 (began the year at 6.22; 5 years ago it was 0.00)

Selected Currencies
$ unchanged 0.0000 versus € (0.00%) at 1.1177 ($: YTD: 2.40%; 5YR: 18.4%)
€ strengthened +0.0010 versus £ (-0.09%) at 1.1439 (€: YTD: -2.70%; 5YR: 7.4%)
$ strengthened +0.0009 versus £ (+0.07%) at 1.2786 ($: YTD: -0.31%; 5YR: 24.0%)
¥ strengthened +0.2800 versus $ (+0.26%) at 109.5700 (¥: YTD: -0.08%; 5YR: -7.4%)

Selected Commodities
Brent Crude ($/bbl) down -0.36 (-0.49%) at 73.53 (YTD: 38.29%; 5YR: -33.3%)
WTI Crude ($/bbl) up +0.85 (+1.37%) at 62.87 (YTD: 38.45%; 5YR: -38.4%)
Gold ($/ozt) up +1.67 (+0.13%) at 1288.38 (YTD: 0.46%; 5YR: -0.4%)
Copper ($/mt) up +15.00 (+0.25%) at 6100.00 (YTD: 2.26%; 5YR: -11.1%)

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