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9 May 2019

09/05/2019

Market Data and Morning Chat

Morning Chat

How tweet it is: When President Donald Trump tweeted his tariff threat Sunday, US markets took a tumble Monday – as did Europe and Asia. Well, here he goes again. However yesterday’s tweet stated China was coming to make a deal. He still hedged his bets with a “We’ll see” but his tone was more upbeat than Sunday’s. Equity markets remained cautious – there was a hopeful spike up but not back to last Friday’s levels – let’s face it, investors need only wait to the weekend to find out if there is a deal, Trump piles on new tariffs… or not.

Looking at China patterns: The question then is “is China likely to agree a deal”. The US has GDP growth of 3.2% over Q1, unemployment at 3.9%, more job openings than unemployed and solid corporate earnings. China has seen GDP slip to 6.4% and now disappointing April trade data. The overall surplus was only $13.84billion – well below the $35billion expected. Exports slipped 2.7% when they were expected to rise 2.3% and imports rose 4.0% when they were expected to fall 3.6%. Fixing their trade surplus needs a deal – although to be fair the surplus with the US did marginally increase.

You would think a Trip Advisor would help you avoid a stumble: US travel and dining website TripAdvisor has had a difficult couple of days – shares are down 11.4% since they announced earnings and another couple of percent in anticipation. The big problem was missing their destination on revenues, checking in with $376million versus the $387million expected. It stems from problems in the “other” revenue streams – often unprofitable – where revenues dropped 33% from $63million to $42million, more than wiping out the solid Experiences & Dining gains. Luckily, the story seems to be stock-specific as Expedia shares were pretty much unchanged.

Imperial Brands US vaping sales & poor tobacco revenues stubbed growth smoking shares 6.3%
Disney shares rose on a great run on parks numbers & a robust showing from the studios.
Travis Perkins built up 10.5% like-for-like sales growth at Wickes for a sound start to 2019
Siemens was on the right track rising 4.6% as the main industrial business earnings rose 7%
Commerzbank saw lending and client numbers up, but limited profit was telling – shares were flat

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -2.94 (-0.24%) at 1,236 (YTD: 14.06%; 5YR: 53.7%)
MSCI AC World Equities (USD) down -14.42 (-0.16%) at 8,883 (YTD: 14.30%; 5YR: 43.4%)
Barclays Global Aggregate Bonds down -0.03 (-0.01%) at 489 (YTD: 2.19%; 5YR: 3.9%)

Selected Equity Indices (Capital returns)
S&P 500 down -4.63 (-0.16%) at 2,879 (YTD: 14.86%; 5YR: 53.3%)
NASDAQ down -20.44 (-0.26%) at 7,943 (YTD: 19.71%; 5YR: 95.1%)
Euro STOXX 50 up +16.10 (+0.47%) at 3,417 (YTD: 13.85%; 5YR: 7.3%)
FTSE 100 up +10.53 (+0.15%) at 7,271 (YTD: 8.07%; 5YR: 6.7%)
CAC 40 up +21.84 (+0.40%) at 5,418 (YTD: 14.52%; 5YR: 21.0%)
DAX up +87.19 (+0.72%) at 12,180 (YTD: 15.35%; 5YR: 27.1%)
Nikkei 225 down -200.46 (-0.93%) at 21,402 (YTD: 6.93%; 5YR: 50.7%)
Hang Seng down -546.88 (-1.89%) at 28,456 (YTD: 10.10%; 5YR: 30.2%)
MSCI Emerging Markets down -6.11 (-0.58%) at 1,051 (YTD: 8.82%; 5YR: 4.4%)

Selected Government Bond Yields
US 10 Year down -0.02 at 2.47 (began the year at 2.68; 5 years ago it was 2.62)
US 2 Year down -0.01 at 2.29 (began the year at 2.49; 5 years ago it was 0.38)
UK 10 Year down -0.02 at 1.14 (began the year at 1.28; 5 years ago it was 2.69)
Germany 10 Year up +0.00 at -0.04 (began the year at 0.24; 5 years ago it was 1.45)
France 10 Year up +0.00 at 0.33 (began the year at 0.70; 5 years ago it was 1.90)
Italy 10 Year up +0.01 at 2.62 (began the year at 2.74; 5 years ago it was 2.95)
Japan 10 Year down 0.00 at -0.06 (began the year at -0.01; 5 years ago it was 0.60)
Barclays EM Basket up +0.00 at 6.11 (began the year at 6.22; 5 years ago it was 5.52)

Selected Currencies
$ weakened -0.0010 versus € (-0.09%) at 1.1199 ($: YTD: 2.21%; 5YR: 18.6%)
€ weakened -0.0004 versus £ (+0.03%) at 1.1629 (€: YTD: -4.29%; 5YR: 5.3%)
$ weakened -0.0018 versus £ (-0.14%) at 1.3024 ($: YTD: -2.18%; 5YR: 22.7%)
¥ strengthened +0.2500 versus $ (+0.23%) at 109.8900 (¥: YTD: 0.21%; 5YR: -7.3%)

Selected Commodities
Brent Crude ($/bbl) down -0.35 (-0.50%) at 70.25 (YTD: 32.12%; 5YR: -34.8%)
WTI Crude ($/bbl) up +0.72 (+1.17%) at 62.12 (YTD: 36.80%; 5YR: -38.0%)
Gold ($/ozt) up +2.54 (+0.20%) at 1283.41 (YTD: 0.07%; 5YR: -0.4%)
Copper ($/mt) down -32.00 (-0.52%) at 6148.00 (YTD: 3.07%; 5YR: -8.6%)

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