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13 May 2019

13/05/2019

Market Data and Morning Chat

Morning Chat

No deal but they’re still talking… for now: When statistically-unlikely football results were not capturing headlines last week (seemingly a better distraction), the focus was US-China trade talks and, for us in Blighty, Tory-Labour talks on Brexit. Neither resolved in agreement. The fruitless Tory-Labour talks made any Brexit solution at best distant, knocking the pound back. Over the week it fell ¢1.6 against the dollar to $1.3003 and ¢1.9 against the Euro to €1.1577. Meanwhile, the failure of US-China trade talks to reach a deal triggered an estimated $20billion withdrawal from global equity funds, $14bilion of which from US funds.

Anything to draw them in again? Aside from still ongoing talks, there are a number of releases which could spark some enthusiasm. From both the US and China we’ll see retail sales, industrial production/output and some housing data. Both retail sales and output will give an indication on the tariff impact. Here in the UK we get wage, unemployment and productivity data. Any unemployment slippage might signal further Brexit concerns and we’re still looking for productivity gains. The Continent will also see industrial output numbers announced, but German Q1 GDP – expected at +0.4% – may be a bigger signal for sentiment.

It’ll take more than a couple of aspirin for this headache: Friday saw the filing of a major US class-action suit. Initially 40, now 47 states and Puerto Rico, filed a claim against 20 generic drug manufacturers and 15 individual executives including lead defendant Teva, Sandoz, Pfizer, Actavis and Mylan of fixing and artificially inflating generic drug prices – in some cases by more than 1000%! Teva shares – which traded on the Israeli market on Sunday – were down 10.70% on news of the suit. Given both the Republicans and Democrats are exercised by drug pricing, this could prove a painful trial.

… but hey, the equity market futures are only very marginally down.
Uber takes investors on a ride through undesired territory as it falls over 7% on its debut

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +3.75 (+0.31%) at 1,230 (YTD: 13.55%; 5YR: 51.4%)
MSCI AC World Equities (USD) up +31.54 (+0.36%) at 8,867 (YTD: 14.09%; 5YR: 41.9%)
Barclays Global Aggregate Bonds up +0.26 (+0.05%) at 490 (YTD: 2.39%; 5YR: 4.2%)

Selected Equity Indices (Capital returns)
S&P 500 up +10.68 (+0.37%) at 2,881 (YTD: 14.94%; 5YR: 51.9%)
NASDAQ up +6.35 (+0.08%) at 7,917 (YTD: 19.32%; 5YR: 91.7%)
Euro STOXX 50 up +10.34 (+0.31%) at 3,361 (YTD: 11.98%; 5YR: 4.6%)
FTSE 100 down -4.12 (-0.06%) at 7,203 (YTD: 7.06%; 5YR: 4.8%)
CAC 40 up +14.28 (+0.27%) at 5,327 (YTD: 12.61%; 5YR: 18.3%)
DAX up +85.91 (+0.72%) at 12,060 (YTD: 14.21%; 5YR: 23.6%)
Nikkei 225 down -153.64 (-0.72%) at 21,191 (YTD: 5.88%; 5YR: 46.9%)
Hang Seng up +239.17 (+0.84%) at 28,550 (YTD: 10.46%; 5YR: 27.7%)
MSCI Emerging Markets up +5.04 (+0.49%) at 1,033 (YTD: 7.01%; 5YR: 1.1%)

Selected Government Bond Yields
US 10 Year down -0.03 at 2.44 (began the year at 2.68; 5 years ago it was 2.61)
US 2 Year down -0.03 at 2.23 (began the year at 2.49; 5 years ago it was 0.38)
UK 10 Year up +0.01 at 1.14 (began the year at 1.28; 5 years ago it was 2.68)
Germany 10 Year up +0.00 at -0.04 (began the year at 0.24; 5 years ago it was 1.42)
France 10 Year up +0.00 at 0.35 (began the year at 0.70; 5 years ago it was 1.88)
Italy 10 Year up +0.02 at 2.70 (began the year at 2.74; 5 years ago it was 2.94)
Japan 10 Year up +0.00 at -0.05 (began the year at -0.01; 5 years ago it was 0.61)
Barclays EM Basket up +0.01 at 6.11 (began the year at 6.22; 5 years ago it was 5.51)

Selected Currencies
$ strengthened +0.0004 versus € (+0.04%) at 1.1233 ($: YTD: 1.91%; 5YR: 18.0%)
€ strengthened +0.0006 versus £ (-0.05%) at 1.1586 (€: YTD: -3.94%; 5YR: 6.1%)
$ strengthened +0.0012 versus £ (+0.09%) at 1.3015 ($: YTD: -2.11%; 5YR: 22.7%)
¥ weakened -0.0400 versus $ (-0.04%) at 109.7200 (¥: YTD: 0.05%; 5YR: -6.8%)

Selected Commodities
Brent Crude ($/bbl) down -0.01 (-0.01%) at 71.59 (YTD: 34.64%; 5YR: -34.2%)
WTI Crude ($/bbl) down -0.04 (-0.06%) at 61.66 (YTD: 35.79%; 5YR: -38.3%)
Gold ($/ozt) down -2.70 (-0.21%) at 1283.35 (YTD: 0.07%; 5YR: -0.8%)
Copper ($/mt) up +24.00 (+0.39%) at 6126.00 (YTD: 2.70%; 5YR: -9.2%)

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