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1 October 2019

01/10/2019

Market Data and Morning Chat

Morning Chat 

September’s done: Nine months down, only three to go to close out 2019, and September was good for equity investors. A decent ½ to 1½% rally across European markets yesterday helped register near-2% to 4% monthly gains.  Asian markets – well, non-Chinese Asian markets – also saw rallied, with Japan, South Korea and India up 5 to 6%.  China – suffering under US tariff threats still – was marginally down on the mainland, but Hong Kong rallied 1½%.  Meanwhile, the US managed ¾ to 3% with the tech-heavy Nasdaq the laggard thanks to the likes of Micron tumbling on concern over stumbling China sales.
  
So, Europe had a good day: An ongoing issue affecting investments is slowing European growth; Is Germany likely to trigger yet another technical recession, would UK growth be worse.  Well, UK GDP growth was confirmed at -0.2% – same as before – but the annual pace was 0.1% higher on a 0.1% revision to Q1, equating to about 1¾ hours extra work over a year for a full-time employee working 220 days a year.  Over in Germany though, where recession is supposedly looming, the number of unemployed… fell.  That was the first decline since April, easing contraction concerns and helping the rally.

… and the US? As noted, the US racked up a positive September.  More though, the US indices closed with a positive ½ to 1% day.  There was some doubt that might be the case as the day started under a cloud of concern that the US would delist – or threaten to delist – Chinese companies in the US.  However, White trade advisor Peter Navarro classed it as “irresponsible journalism”. A pretty decent denial that had tech stocks out-pacing the market.  Now we await the arrival of the China delegation next week – and hopefully won’t see the traditional October market volatility.

Shell and BP share prices were mired in oil … prices.. leading the UK market lower yesterday
… but the futures are all pointing up today as the dollar strengthens and China takes a day off
… celebrating 70 years of communism a with massive military parade and TV giveaways
UK housing prices fell in September by 0.2% according to the Nationwide survey

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +3.25 (+0.26%) at 1,275 (YTD: 17.70%; 5YR: 52.8%)
MSCI AC World Equities (USD) up +19.36 (+0.21%) at 9,182 (YTD: 18.15%; 5YR: 47.2%)
Barclays Global Aggregate Bonds down -0.53 (-0.10%) at 509 (YTD: 6.32%; 5YR: 10.1%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +14.95 (+0.50%) at 2,977 (YTD: 18.74%; 5YR: 53.0%)    
NASDAQ up +59.71 (+0.75%) at 7,999 (YTD: 20.56%; 5YR: 80.9%)    
Euro STOXX 50 up +23.57 (+0.66%) at 3,569 (YTD: 18.93%; 5YR: 11.7%)    
FTSE 100 down -18.00 (-0.24%) at 7,408 (YTD: 10.11%; 5YR: 13.0%)    
CAC up +37.21 (+0.66%) at 5,678 (YTD: 20.02%; 5YR: 30.1%)    
DAX up +47.14 (+0.38%) at 12,428 (YTD: 17.70%; 5YR: 32.5%)    
Nikkei 225  up +129.40 (+0.59%) at 21,885 (YTD: 9.35%; 5YR: 36.1%)    
Hang Seng up +137.46 (+0.53%) at 26,092 (YTD: 0.95%; 5YR: 13.8%)    
MSCI Emerging Markets down -0.50 (-0.05%) at 1,001 (YTD: 3.65%; 5YR: 0.4%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.64 (began the year at 2.49; 5 years ago it was 0.52)    
US 10 Year up +0.04 at 1.70 (began the year at 2.68; 5 years ago it was 2.39)    
UK 10 Year down -0.01 at 0.49 (began the year at 1.28; 5 years ago it was 2.36)    
Germany 10 Year up +0.02 at -0.55 (began the year at 0.24; 5 years ago it was 0.90)    
France 10 Year up +0.03 at -0.25 (began the year at 0.70; 5 years ago it was 1.24)    
Italy 10 Year up +0.00 at 0.82 (began the year at 2.74; 5 years ago it was 2.28)    
Japan 10 Year up +0.06 at -0.16 (began the year at -0.01; 5 years ago it was 0.53)    
Barclays EM Basket up +0.00 at 5.49 (began the year at 6.22; 5 years ago it was 5.40)
    
Selected Currencies    
$ strengthened +0.0018 versus € (+0.17%) at 1.0885 ($: YTD: 4.95%; 5YR: 13.7%)    
€ weakened -0.0008 versus £ (+0.07%) at 1.1280 (€: YTD: -1.33%; 5YR: 13.8%)    
$ strengthened +0.0010 versus £ (+0.08%) at 1.2280 ($: YTD: 3.66%; 5YR: 24.1%)    
¥ weakened -0.1000 versus $ (-0.09%) at 108.2500 (¥: YTD: -1.30%; 5YR: 1.0%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.04 (+0.07%) at 59.89 (YTD: 12.64%; 5YR: -36.0%)    
WTI Crude ($/bbl) down -1.84 (-3.29%) at 54.07 (YTD: 19.07%; 5YR: -40.7%)    
Gold ($/ozt) down -9.60 (-0.65%) at 1462.79 (YTD: 14.06%; 5YR: 20.5%)    
Copper ($/mt) down -42.00 (-0.73%) at 5725.00 (YTD: -4.02%; 5YR: -14.1%)    
    
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