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22 October 2019

22/10/2019

Market Data and Morning Chat

Morning Chat 

Just another manacled Monday: MPs ended up turning Super Saturday into a vote on Oliver Letwin’s amendment rather than Boris’ Deal.  Consequently, Boris tried to get his deal lined up for another go yesterday, only Speaker John Bercow nixed that plan.  So the Government tabled the Withdrawal Agreement Bill, the 110-page legislation to implement the Brexit deal. More, they issued a programme motion – essentially a timetable – to get the bill passed by the Commons in three days so the full deal can be passed by the Lords in time to meet the October 31 deadline. Let the amendment battles commence.

Hazy shade of winners: Given the lack of progress on Brexit, you might expect the markets to have been in a bit of disarray. But aside from the Australians, equities posted gains across the board. The UK market rallied ¼% – led once again by more domestically-focussed stocks – European indices from ¼% to 1% and the US around ¾%. Yes, positivity over US tariff talks helped, but an optimism that Boris has the numbers to get the Withdrawal Agreement Bill passed was a key driver too, although not enough to stop the pound giving up a little of its recent gains.

Works like a prescription: With White House economic advisor Larry Kudlow saying the US-China trade talks are moving in the right direction with good progress on financial services & currency stability and, more, the December tariff increases could be parked, it was no wonder it was a shot in the arm for US markets.  Additionally, we continue to see reasonable company results with a better-than-expected pace of earning beats (although the scale of beats are more modest than usual). There’s enthusiasm too for major names coming up – Microsoft, hoping to reclaim the “world’s biggest company” title from Apple, and Amazon. 

Prudential completes split off the £5.8billion UK domestic fund management business M&G
Wirecard (+6.1%) hires KPMG to complete independent audit after FT allegations
Smith & Nephew (-8.9%) shares tumble as the company faces CEO replacement surgery
Glaxo (-0.4%) to sell off two vaccine products for £850million to concentrate on cancer work
Novartis (+2.2% pre-market) announces better-than-expected earnings as new drugs kick in
Trudeau looks set to win minority government 13 seats shy of majority with low 33% vote share
Major market equity futures mostly in an optimistic mood today, with only UK and Spain down

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +7.08 (+0.55%) at 1,287 (YTD: 18.80%; 5YR: 57.3%)
MSCI AC World Equities (USD) up +59.46 (+0.64%) at 9,313 (YTD: 19.83%; 5YR: 52.1%)
Barclays Global Aggregate Bonds down -0.65 (-0.13%) at 510 (YTD: 6.42%; 5YR: 9.2%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +20.52 (+0.69%) at 3,007 (YTD: 19.94%; 5YR: 56.0%)    
NASDAQ up +73.44 (+0.91%) at 8,163 (YTD: 23.02%; 5YR: 86.2%)    
Euro STOXX 50 up +20.67 (+0.58%) at 3,600 (YTD: 19.95%; 5YR: 19.7%)    
FTSE 100 up +13.07 (+0.18%) at 7,164 (YTD: 6.47%; 5YR: 11.9%)    
CAC up +12.10 (+0.21%) at 5,648 (YTD: 19.40%; 5YR: 37.6%)    
DAX up +114.36 (+0.91%) at 12,748 (YTD: 20.73%; 5YR: 42.6%)    
Nikkei 225  up +56.22 (+0.25%) at 22,549 (YTD: 12.66%; 5YR: 48.4%)    
Hang Seng up +37.87 (+0.14%) at 26,764 (YTD: 3.55%; 5YR: 14.4%)    
MSCI Emerging Markets up +4.48 (+0.44%) at 1,029 (YTD: 6.50%; 5YR: 4.2%)    
    
Selected Government Bond Yields    
US 2 Year up +0.00 at 1.62 (began the year at 2.49; 5 years ago it was 0.36)    
US 10 Year up +0.00 at 1.80 (began the year at 2.68; 5 years ago it was 2.22)    
UK 10 Year up +0.04 at 0.75 (began the year at 1.28; 5 years ago it was 2.21)    
Germany 10 Year up +0.00 at -0.34 (began the year at 0.24; 5 years ago it was 0.87)    
France 10 Year up +0.00 at -0.04 (began the year at 0.70; 5 years ago it was 1.28)    
Italy 10 Year down -0.01 at 0.97 (began the year at 2.74; 5 years ago it was 2.51)    
Japan 10 Year up +0.01 at -0.14 (began the year at -0.01; 5 years ago it was 0.48)    
Barclays EM Basket up +0.00 at 5.35 (began the year at 6.22; 5 years ago it was 5.19)
    
Selected Currencies    
$ weakened -0.0002 versus € (-0.02%) at 1.1154 ($: YTD: 2.60%; 5YR: 11.9%)    
€ strengthened +0.0005 versus £ (-0.04%) at 1.1630 (€: YTD: -4.30%; 5YR: 9.1%)    
$ strengthened +0.0003 versus £ (+0.02%) at 1.2973 ($: YTD: -1.78%; 5YR: 19.3%)    
¥ weakened -0.0200 versus $ (-0.02%) at 108.6000 (¥: YTD: -0.98%; 5YR: -1.2%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.13 (-0.22%) at 58.40 (YTD: 9.84%; 5YR: -30.3%)    
WTI Crude ($/bbl) down -0.47 (-0.87%) at 53.31 (YTD: 17.40%; 5YR: -35.6%)    
Gold ($/ozt) up +0.28 (+0.02%) at 1484.88 (YTD: 15.78%; 5YR: 19.6%)    
Copper ($/mt) up +22.00 (+0.38%) at 5828.00 (YTD: -2.30%; 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