!css

19 November 2019

19/11/2019

Market Data and Morning Chat

Morning Chat 

Might leave Labour pence-ive: Survation, ICM and ComRes have consistently reported the Tories polling lead of no more than 8%. Going back to the 2017 election, Survation has never given a lead more than 8% and usually skews towards Labour. Three polls over the weekend gave a mid-teens lead to the Tories, but the results were generally in keeping with what you might expect from those pollsters. However, Survation’s poll released yesterday putting the Tories on a 14% lead was significant enough to trigger a 0.4% rally in sterling and lift smaller companies. Maybe significant enough to worry Corbyn too.

Testing their metal: Commodity prices had a rough ride Monday.  Oil prices slipped 1.9% (West Texas) to 2.2% (Brent), and it was even worse for natural gas, slipping 5.4%.  Soybeans – a crop heavily influenced by Chinese buying – went to seed, falling 1.4%, while the various common industrial metals were also down. Not surprisingly, the declining commodities are the ones most tied to fluctuations in Asian and trade sentiment, and after a week marked by comments that a deal was close, the Chinese admitted growing pessimism for any near-term deal. The Chinese turn in sentiment didn’t help equities that much either.

The ting of the can once again kicked: Politicians seem to find kicking the can down the road a favorite solution, and the US House of Representatives have a vote today to kick another can.  The vote is for a simplified continuing resolution to fund the US government on a temporary basis for another month as Congress seeks to come to an agreement on a longer-term budget spending plan.  Unsurprisingly, they’ve already agreed a two-year plan on how to get their hands on the cash, and to suspend the debt ceiling, but they’re struggling to agree how to spend it.

Despite the sentiment turn by the Chinese, market futures are looking up today as is Hong Kong
Aviva (-4.6%) reversal of its decision to sell the Asian business insured company shares fell
With a deadline looming, Trump’s administration gave a 90-day extension to Huawei embargos…
… lifting shares in companies like Nvidia (+4.0%) and Advanced Micro Devices (+3.4%)
Merkel reaffirms budgetary “black zero” policy despite business lobby and union spending calls

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +1.20 (+0.09%) at 1,333 (YTD: 23.07%; 5YR: 54.0%)
MSCI AC World Equities (USD) up +13.04 (+0.14%) at 9,651 (YTD: 24.18%; 5YR: 50.2%)
Barclays Global Aggregate Bonds up +1.04 (+0.21%) at 509 (YTD: 6.29%; 5YR: 11.3%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +1.57 (+0.05%) at 3,122 (YTD: 24.54%; 5YR: 52.4%)    
NASDAQ up +9.11 (+0.11%) at 8,550 (YTD: 28.86%; 5YR: 82.9%)    
Euro STOXX 50 down -6.69 (-0.18%) at 3,705 (YTD: 23.44%; 5YR: 18.6%)    
FTSE 100 up +4.76 (+0.07%) at 7,308 (YTD: 8.61%; 5YR: 9.1%)    
CAC down -9.48 (-0.16%) at 5,930 (YTD: 25.35%; 5YR: 39.0%)    
DAX down -34.74 (-0.26%) at 13,207 (YTD: 25.08%; 5YR: 39.4%)    
Nikkei 225  down -124.11 (-0.53%) at 23,293 (YTD: 16.38%; 5YR: 34.7%)    
Hang Seng up +378.65 (+1.42%) at 27,060 (YTD: 4.70%; 5YR: 15.8%)    
MSCI Emerging Markets up +3.32 (+0.32%) at 1,052 (YTD: 8.94%; 5YR: 6.3%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.61 (began the year at 2.49; 5 years ago it was 0.52)    
US 10 Year down 0.00 at 1.81 (began the year at 2.68; 5 years ago it was 2.36)    
UK 10 Year up +0.02 at 0.75 (began the year at 1.28; 5 years ago it was 2.14)    
Germany 10 Year up +0.00 at -0.33 (began the year at 0.24; 5 years ago it was 0.85)    
France 10 Year up +0.00 at -0.03 (began the year at 0.70; 5 years ago it was 1.20)    
Italy 10 Year down -0.02 at 1.19 (began the year at 2.74; 5 years ago it was 2.33)    
Japan 10 Year down -0.01 at -0.09 (began the year at -0.01; 5 years ago it was 0.48)    
Barclays EM Basket down -0.02 at 5.46 (began the year at 6.22; 5 years ago it was 5.15)
    
Selected Currencies    
$ strengthened +0.0004 versus € (+0.04%) at 1.1078 ($: YTD: 3.27%; 5YR: 11.7%)    
€ unchanged 0.0000 versus £ (0.00%) at 1.1701 (€: YTD: -4.88%; 5YR: 6.8%)    
$ strengthened +0.0005 versus £ (+0.04%) at 1.2962 ($: YTD: -1.69%; 5YR: 17.4%)    
¥ weakened -0.0400 versus $ (-0.04%) at 108.6300 (¥: YTD: -0.95%; 5YR: 8.4%)    
    
Selected Commodities    
Brent Crude ($/bbl) unchanged 0.00 (0.00%) at 62.44 (YTD: 17.43%; 5YR: -18.5%)    
WTI Crude ($/bbl) down -0.67 (-1.16%) at 57.05 (YTD: 25.63%; 5YR: -23.5%)    
Gold ($/ozt) down -0.80 (-0.05%) at 1470.65 (YTD: 14.68%; 5YR: 24.3%)    
Copper ($/mt) down -19.00 (-0.32%) at 5830.00 (YTD: -2.26%; 5YR: -12.1%)    
    
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