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5 November 2019

05/11/2019

Market Data and Morning Chat

Morning Chat 

Markit rally: The Aussies and Japanese closed their market a bit early to benefit from the better-than-expected European Markit manufacturing data – more’s the pity, as the Australian services PMI was a bit weak. Germany, Italy, & France all scored improved numbers on last month and a decimal point or two ahead of forecasts. Spain spoilt the party slightly, but not enough to damped the broad Euro-area improvement. Given the European equity markets were all trading on optimism carried over from Friday’s US employment data, the impetus was there to push the UK and continental indices solidly up 1 to 1½%.  

Factory orders were a bit of a wrench: US equities also posted roughly ½% gains with technology and energy sector stocks helping the Dow Jones, S&P550 and Nasdaq indices hit new all-time highs.  Gains were tempered though by the marginally weaker-than-hoped US factory orders. New orders were lower by 0.6% when a 0.5% contraction was expected so not really so far off.  The driver was a 2.8% decline in transport equipment orders on the back of a further weakening of civilian aircraft orders (with Boeing a big and highly variable factor) and a further slide in computers and electronics orders.  

The cusp of EV: Two interesting German items. Angela Merkel announced she wants Germany to have a million Electric Vehicle (EV) charging points by 2030. Many cars will obviously be charged at home, but given the current 45million German private car fleet driving 33kilometers a day, the rapid (assumedly) charging points would do the job in 8-9 hours. Meanwhile, VW officially started production of their ID.3 EV (at £27,000, they’re not cheap but the £5400 government incentive helps) with a planned 2021 capacity of 330,000 (thus c.3million by 2030).  Maybe not the full 45million for 2030, but it’s a start. 

Sir Lindsay Hoyle selected as the new Speaker of the House to succeed John Bercow
British Airways parent IAG (+1.0%) lifted by £1billion Air Europa deal to enhance Madrid hub
William Hill (-12.7%), 888 (-13.7%) and GVC (-10.5%) a bad bet on proposed new £2 stake limit 
Under Armour (-18.9%) shares register a pants decline as federal accounting probe announced
McDonald’s (-2.7%) fire their CEO in a beef about his consensual relationship with an employee
Ferrari (+6.5%) shares revved up by earnings beat on strong Portofino and 812 Superfast sales   

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +7.54 (+0.57%) at 1,319 (YTD: 21.72%; 5YR: 54.4%)
MSCI AC World Equities (USD) up +39.77 (+0.42%) at 9,537 (YTD: 22.71%; 5YR: 50.2%)
Barclays Global Aggregate Bonds down -1.40 (-0.27%) at 511 (YTD: 6.70%; 5YR: 11.3%)
    
Selected Equity Indices (Capital returns) 
   
S&P 500 up +11.36 (+0.37%) at 3,078 (YTD: 22.79%; 5YR: 52.1%)    
NASDAQ up +46.80 (+0.56%) at 8,433 (YTD: 27.10%; 5YR: 82.5%)    
Euro STOXX 50 up +41.47 (+1.14%) at 3,665 (YTD: 22.12%; 5YR: 18.6%)    
FTSE 100 up +67.27 (+0.92%) at 7,370 (YTD: 9.54%; 5YR: 12.7%)    
CAC up +62.41 (+1.08%) at 5,824 (YTD: 23.12%; 5YR: 38.4%)    
DAX up +175.23 (+1.35%) at 13,136 (YTD: 24.41%; 5YR: 41.0%)    
Nikkei 225  up +401.22 (+1.76%) at 23,252 (YTD: 16.17%; 5YR: 37.9%)    
Hang Seng up +79.35 (+0.29%) at 27,627 (YTD: 6.89%; 5YR: 16.6%)    
MSCI Emerging Markets up +15.36 (+1.46%) at 1,065 (YTD: 10.23%; 5YR: 6.6%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.59 (began the year at 2.49; 5 years ago it was 0.52)    
US 10 Year up +0.03 at 1.80 (began the year at 2.68; 5 years ago it was 2.34)    
UK 10 Year up +0.06 at 0.73 (began the year at 1.28; 5 years ago it was 2.26)    
Germany 10 Year down -0.02 at -0.37 (began the year at 0.24; 5 years ago it was 0.83)    
France 10 Year down -0.01 at -0.06 (began the year at 0.70; 5 years ago it was 1.19)    
Italy 10 Year down 0.00 at 0.99 (began the year at 2.74; 5 years ago it was 2.43)    
Japan 10 Year unchanged at -0.19 (began the year at -0.01; 5 years ago it was 0.47)    
Barclays EM Basket up +0.01 at 5.48 (began the year at 6.22; 5 years ago it was 5.19)
    
Selected Currencies    
$ strengthened +0.0006 versus € (+0.05%) at 1.1135 ($: YTD: 2.77%; 5YR: 10.9%)    
€ weakened -0.0002 versus £ (+0.02%) at 1.1582 (€: YTD: -3.90%; 5YR: 10.5%)    
$ strengthened +0.0004 versus £ (+0.03%) at 1.2896 ($: YTD: -1.18%; 5YR: 19.3%)    
¥ weakened -0.2000 versus $ (-0.18%) at 108.7900 (¥: YTD: -0.80%; 5YR: 5.4%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.07 (-0.11%) at 62.30 (YTD: 17.17%; 5YR: -24.7%)    
WTI Crude ($/bbl) up +0.34 (+0.60%) at 56.54 (YTD: 24.51%; 5YR: -26.8%)    
Gold ($/ozt) down -2.50 (-0.17%) at 1507.26 (YTD: 17.53%; 5YR: 32.1%)    
Copper ($/mt) up +27.00 (+0.46%) at 5877.00 (YTD: -1.48%; 5YR: -11.6%)    
    
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