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4 November 2019

04/11/2019

Market Data and Morning Chat

Morning Chat 

Not to belabour the point: Last week proved to be a generally positive week.  You might not think so if all your investments were in Spain (-1.1%) or the UK (-0.2%), but most of the other major equity markets posted gains.  A solid Friday helped carry the numbers – most markets were +/-¼% going into the day – but October’s 128,000 non-farm payrolls – decently more than the 89.000 expected – and 3.6% unemployment were a boost. Better still, the upward revision to September and the second revision to August adding a further 89,000 to the prior 130,000 reported certainly helped lift the mood.

October’s not always a good month: October is often a stormy month for markets delivering many downbeat results, but this year landed generally in positive territory, despite the opening days boding poorly.  Troubles in US factory orders, weak ADP employment numbers, Brexit worries and possible new US tariffs against China were a downbeat start.  But US-China talks improved as the month wore on, a Brexit deal emerged (though Parliament deferred voting it through) and corporate earnings proved a positive fillip. Most developed markets rallied 1% to as much as Japan’s 5%, though the UK slipped 2% over the Brexit delay.

Markit in your calendar: Yes, another month has rolled around.  Data releases starting with the non-farm payrolls and Chinese Caixin manufacturing PMI – which hit a 32-month high – fire the opening salvoes.  Then, today, we start to get the European final estimates of the Markit manufacturing PMIs – often a driver of sentiment – along with US factory orders. Tomorrow, the US Jolts report and their Markit and ISM sentiment data.  The European and Japanese Markit services surveys come out Wednesday, then retail sales data, Japanese household spending and European balance of trade.  That’s a lot of meaty data – hopefully upbeat – to digest.

Parties get started on their election run with billions of new spending announced
Speaking of launches, Saudi Arabia has launched the long-awaited Aramco IPO
Peugeot (+2.9%) recovers some ground, but still down 10.3% after Fiat merger bid announced 
A welcome sea of green across the equity futures market as last week’s optimism continues

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +10.05 (+0.77%) at 1,311 (YTD: 21.02%; 5YR: 54.4%)
MSCI AC World Equities (USD) up +78.70 (+0.84%) at 9,497 (YTD: 22.20%; 5YR: 50.4%)
Barclays Global Aggregate Bonds down -0.18 (-0.04%) at 512 (YTD: 6.99%; 5YR: 11.1%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +29.35 (+0.97%) at 3,067 (YTD: 22.34%; 5YR: 52.4%)    
NASDAQ up +94.04 (+1.13%) at 8,386 (YTD: 26.39%; 5YR: 81.4%)    
Euro STOXX 50 up +19.33 (+0.54%) at 3,624 (YTD: 20.73%; 5YR: 19.4%)    
FTSE 100 up +54.04 (+0.75%) at 7,302 (YTD: 8.54%; 5YR: 13.1%)    
CAC up +32.03 (+0.56%) at 5,762 (YTD: 21.80%; 5YR: 39.5%)    
DAX up +94.26 (+0.73%) at 12,961 (YTD: 22.75%; 5YR: 41.4%)    
Nikkei 225  down -76.27 (-0.33%) at 22,851 (YTD: 14.17%; 5YR: 35.5%)    
Hang Seng up +361.60 (+1.33%) at 27,462 (YTD: 6.26%; 5YR: 15.2%)    
MSCI Emerging Markets up +7.21 (+0.69%) at 1,049 (YTD: 8.64%; 5YR: 4.2%)    
    
Selected Government Bond Yields    
US 2 Year up +0.03 at 1.58 (began the year at 2.49; 5 years ago it was 0.51)    
US 10 Year up +0.04 at 1.75 (began the year at 2.68; 5 years ago it was 2.33)    
UK 10 Year up +0.03 at 0.66 (began the year at 1.28; 5 years ago it was 2.23)    
Germany 10 Year up +0.02 at -0.37 (began the year at 0.24; 5 years ago it was 0.81)    
France 10 Year up +0.02 at -0.05 (began the year at 0.70; 5 years ago it was 1.17)    
Italy 10 Year up +0.03 at 1.03 (began the year at 2.74; 5 years ago it was 2.43)    
Japan 10 Year down -0.04 at -0.19 (began the year at -0.01; 5 years ago it was 0.44)    
Barclays EM Basket up +0.14 at 5.47 (began the year at 6.22; 5 years ago it was 5.17)
    
Selected Currencies    
$ weakened -0.0009 versus € (-0.08%) at 1.1171 ($: YTD: 2.45%; 5YR: 11.0%)    
€ strengthened +0.0012 versus £ (-0.10%) at 1.1579 (€: YTD: -3.88%; 5YR: 10.1%)    
$ strengthened +0.0002 versus £ (+0.02%) at 1.2935 ($: YTD: -1.48%; 5YR: 19.1%)    
¥ weakened -0.0400 versus $ (-0.04%) at 108.2900 (¥: YTD: -1.27%; 5YR: 4.8%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.12 (-0.19%) at 61.57 (YTD: 15.80%; 5YR: -25.0%)    
WTI Crude ($/bbl) up +2.02 (+3.73%) at 56.20 (YTD: 23.76%; 5YR: -30.2%)    
Gold ($/ozt) down -1.00 (-0.07%) at 1513.40 (YTD: 18.01%; 5YR: 29.5%)    
Copper ($/mt) up +53.00 (+0.91%) at 5850.00 (YTD: -1.93%; 5YR: -12.6%)    
    
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