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10 October 2019

10/10/2019

Market Data and Morning Chat

Morning Chat 

Someway, over the rainbow: The hoped for pot of trade gold at the end of the US-China trade negotiations rainbow isn’t in sight yet, but equity markets had a decent day – European indices rallied ½ to 1½% and the US 0 to 1% - on news that the Chinese would be willing to do a partial trade deal pretty quickly.  In exchange for no new tariffs, the Chinese would offer increased purchases of US agricultural goods. That’s probably not going far enough for Donald Trump and while on the path, it’s still someway off to keep markets happy for long. 

But they did ignore a little jolt: The US equities gains did however come on a day when news on the JOLTS – Job Openings – report wasn’t as strong as hoped, but given unemployment is at a 50-year low, a slight miss on JOLTS is probably forgivable. Overall the report showed job openings fell to 7.051million, below the 7.191million expected, but well above the 5.769million unemployed.  Given non-farm payrolls rose by 135,000, you’re sort of saying last month the economy didn’t create any new private sector job rolls, but didn’t really lose any either – not surprising with an ongoing tariff war.

Hold your breath: We saw a roller-coaster overnight after a South China Morning Post report of no trade-talks progress has sent US futures down followed by a White House comment that the reports were wrong. Now, weaker-than-expected 1.8% decline in German exports and an expected 0.5% rise in imports meant the August German trade balance narrowed. Next, the release of the UK’s month-on-month GDP which analyst forecasts expect to show a marginal decline.  Throw into the mix British, French & Italian industrial & manufacturing production (and UK construction output) and the trade talks could mean the equity roller-coaster continues today. 

… ouch, just out, French industrial output fell 0.9% - more than the 0.3% expected  
US statisticians are busy too as we also get US inflation and budget deficit data today
The report of no progress in the trade-talks hurt shares in Apple, Micron, Nvidia and Broadcom
… but, Asian shares are rallying on reports Trump may ease restrictions on Huawei  
Oil prices fell on news US production decline was down to Hurricane Barry shut-downs

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +7.25 (+0.58%) at 1,252 (YTD: 15.55%; 5YR: 54.5%)
MSCI AC World Equities (USD) up +58.70 (+0.66%) at 9,008 (YTD: 15.91%; 5YR: 49.0%)
Barclays Global Aggregate Bonds down -0.92 (-0.18%) at 511 (YTD: 6.72%; 5YR: 9.9%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +26.34 (+0.91%) at 2,919 (YTD: 16.46%; 5YR: 53.2%)    
NASDAQ up +79.97 (+1.02%) at 7,904 (YTD: 19.12%; 5YR: 84.8%)    
Euro STOXX 50 up +29.35 (+0.85%) at 3,462 (YTD: 15.35%; 5YR: 15.7%)    
FTSE 100 up +23.35 (+0.33%) at 7,167 (YTD: 6.52%; 5YR: 13.0%)    
CAC up +42.52 (+0.78%) at 5,499 (YTD: 16.24%; 5YR: 35.0%)    
DAX up +124.06 (+1.04%) at 12,094 (YTD: 14.54%; 5YR: 37.6%)    
Nikkei 225  up +95.60 (+0.45%) at 21,552 (YTD: 7.68%; 5YR: 40.9%)    
Hang Seng up +79.41 (+0.31%) at 25,762 (YTD: -0.32%; 5YR: 11.6%)    
MSCI Emerging Markets down -0.94 (-0.09%) at 993 (YTD: 2.82%; 5YR: 0.3%)    
    
Selected Government Bond Yields    
US 2 Year down -0.01 at 1.46 (began the year at 2.49; 5 years ago it was 0.42)    
US 10 Year up +0.00 at 1.59 (began the year at 2.68; 5 years ago it was 2.28)    
UK 10 Year up +0.02 at 0.48 (began the year at 1.28; 5 years ago it was 2.22)    
Germany 10 Year up +0.01 at -0.54 (began the year at 0.24; 5 years ago it was 0.89)    
France 10 Year up +0.02 at -0.20 (began the year at 0.70; 5 years ago it was 1.25)    
Italy 10 Year up +0.04 at 0.91 (began the year at 2.74; 5 years ago it was 2.32)    
Japan 10 Year down 0.00 at -0.21 (began the year at -0.01; 5 years ago it was 0.50)    
Barclays EM Basket up +0.01 at 5.39 (began the year at 6.22; 5 years ago it was 5.30)
    
Selected Currencies    
$ weakened -0.0039 versus € (-0.36%) at 1.1012 ($: YTD: 3.84%; 5YR: 12.9%)    
€ strengthened +0.0004 versus £ (-0.04%) at 1.1117 (€: YTD: 0.12%; 5YR: 14.3%)    
$ weakened -0.0039 versus £ (-0.32%) at 1.2242 ($: YTD: 3.95%; 5YR: 23.8%)    
¥ strengthened +0.0900 versus $ (+0.08%) at 107.4900 (¥: YTD: -2.02%; 5YR: 0.3%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.07 (-0.12%) at 58.20 (YTD: 9.46%; 5YR: -35.1%)    
WTI Crude ($/bbl) down -0.04 (-0.08%) at 52.59 (YTD: 15.81%; 5YR: -38.7%)    
Gold ($/ozt) up +1.37 (+0.09%) at 1507.02 (YTD: 17.51%; 5YR: 23.2%)    
Copper ($/mt) up +8.50 (+0.15%) at 5684.00 (YTD: -4.71%; 5YR: -15.2%)    
    
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