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15 May 2019

15/05/2019

Market Data and Morning Chat

Morning Chat

UK unemployment fell to a 45-year low 3.8% while wages grew a massively inflation-beating 3.3%

Mining their own business: Market futures yesterday morning signalled a recovery and as the day closed the European indices were in positive territory. The FTSE100 rose 1.15%, the DAX 0.85%, CAC 1.48% and Italy’s MIB 1.28%. Some late-night positivity by Donald Trump the day before was a significant factor. Yet mining stocks – especially in the UK (the FTSE350 mining index was up 2.49%) – had help from Glencore CEO Ivan Glasenberg who rocked a presentation on the future of mining after Chinese demand fades. Citing demand from Africa and the inputs for electrical vehicles his outlook added lustre to the sector.

Difficult to Bayer: Bayer, the German blue-chip that invented aspirin, probably wants some of its medicine. A California jury awarded just over $2billion in punitive and compensatory damages to the Pilliods. The couple were both diagnosed with non-Hodgkin lymphoma and they blamed the diagnosis on long-term use of Bayer’s poison-pill Monsanto’s Round-up. Bayer is appealing – the cancer claim is based off a 2015 report calling Round-up carcinogenic – but they have to as there are many more similar cases like this. The case had been ongoing for a while, but the massive scale of the verdict knocked the shares over 2.0%

Hate to drone on about oil: For equities, it’s a US-China trade deal – or not – story. Yet for oil there are a number of influencing factors. Iran sanctions should limit supply and boost prices. A conflict in Libya and Venezuelan unrest may further cut supply just as the seasonal oil demand tends to rise. Oil supplies should be falling – except they’re not. The American Petroleum Institute reported an 8.6million barrel build when analysts expected a 2.1million draw thus raising growth concerns. It did help counter price gains following yesterday's Houthi drone attack, presumptively Iranian-supplied, on Saudi oil pumping stations.

Deputy PM Salvini rattled nerves by saying Italy could break EU fiscal rules; Really, Rome?
Deutsche-jilted Commerzbank rallies 4.3% on possible Unicredit proposal.
Allianz up 1.8% as earnings weren’t shaken by disasters like the market expected.
It won’t shock you, but Volkwagen shares rallied 1.0% on €1billion battery plant development.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +7.34 (+0.61%) at 1,215 (YTD: 12.18%; 5YR: 50.7%)
MSCI AC World Equities (USD) up +52.79 (+0.61%) at 8,754 (YTD: 12.64%; 5YR: 41.3%)
Barclays Global Aggregate Bonds down -0.85 (-0.17%) at 490 (YTD: 2.37%; 5YR: 3.7%)

Selected Equity Indices (Capital returns)
S&P 500 up +22.54 (+0.80%) at 2,834 (YTD: 13.07%; 5YR: 51.5%)
NASDAQ up +87.47 (+1.14%) at 7,734 (YTD: 16.57%; 5YR: 90.1%)
Euro STOXX 50 up +43.60 (+1.31%) at 3,364 (YTD: 12.09%; 5YR: 6.4%)
FTSE 100 up +77.92 (+1.09%) at 7,242 (YTD: 7.63%; 5YR: 5.9%)
CAC 40 up +78.78 (+1.50%) at 5,341 (YTD: 12.91%; 5YR: 20.2%)
DAX up +114.97 (+0.97%) at 11,992 (YTD: 13.57%; 5YR: 24.2%)
Nikkei 225 up +121.33 (+0.58%) at 21,189 (YTD: 5.86%; 5YR: 48.2%)
Hang Seng up +291.41 (+1.04%) at 28,413 (YTD: 9.93%; 5YR: 25.0%)
MSCI Emerging Markets down -2.01 (-0.20%) at 1,014 (YTD: 5.04%; 5YR: -1.4%)

Selected Government Bond Yields
US 10 Year up +0.01 at 2.42 (began the year at 2.68; 5 years ago it was 2.49)
US 2 Year up +0.01 at 2.21 (began the year at 2.49; 5 years ago it was 0.35)
UK 10 Year up +0.00 at 1.11 (began the year at 1.28; 5 years ago it was 2.52)
Germany 10 Year up +0.01 at -0.06 (began the year at 0.24; 5 years ago it was 1.31)
France 10 Year up +0.01 at 0.34 (began the year at 0.70; 5 years ago it was 1.76)
Italy 10 Year down -0.01 at 2.72 (began the year at 2.74; 5 years ago it was 3.10)
Japan 10 Year unchanged at -0.06 (began the year at -0.01; 5 years ago it was 0.59)
Barclays EM Basket up +0.01 at 6.13 (began the year at 6.22; 5 years ago it was 5.49)

Selected Currencies
$ strengthened +0.0002 versus € (+0.02%) at 1.1208 ($: YTD: 2.13%; 5YR: 18.2%)
€ strengthened +0.0006 versus £ (-0.05%) at 1.1516 (€: YTD: -3.35%; 5YR: 6.4%)
$ strengthened +0.0010 versus £ (+0.08%) at 1.2907 ($: YTD: -1.26%; 5YR: 23.1%)
¥ weakened -0.0300 versus $ (-0.03%) at 109.6900 (¥: YTD: 0.03%; 5YR: -7.4%)

Selected Commodities
Brent Crude ($/bbl) up +0.10 (+0.14%) at 71.72 (YTD: 34.89%; 5YR: -34.6%)
WTI Crude ($/bbl) up +0.74 (+1.21%) at 61.78 (YTD: 36.05%; 5YR: -39.7%)
Gold ($/ozt) down -2.34 (-0.18%) at 1294.56 (YTD: 0.94%; 5YR: -0.1%)
Copper ($/mt) up +16.00 (+0.27%) at 6027.00 (YTD: 1.04%; 5YR: -12.9%)

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