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23 September 2019

23/09/2019

Market Data and Morning Chat

Morning Chat 

Bit of a flip: US equities had a rough Friday thanks to a Chinese delegation cancelling field trips to Montana & Nebraska and heading home. Since the Chinese didn’t plow ahead and visit the farming states, US investors took it to mean trade talks were once again more likely to stall, so equities sold off just enough to harvest a negative week.  Meanwhile, European markets closed before the US-China trade talks euphoria had dissipated, so their rally to a fifth week of gains held – just. Here, hesitancy over the Supreme Court prorogation ruling kept UK equities weekly gain dampened down.

But, hey, it’s Markit week: Sentiment is one of the bigger drivers of market gains and Markit PMI surveys often influence investor sentiment.  This week sees flash – or early – surveys for the US, Germany and France. Germany’s and France’s – due in minutes – are expected to show further weakness, so if they don’t that’s a plus. The US survey is expected to hold steady just over the positive threshold. This week, we also get a shed-load (house-load?) of housing data in the US & UK, UK factory orders, US durable goods, and the final Q2 GDP number. Loads to influence sentiment. 

Talking about confidence: It’s not just absolute levels of these surveys that matters, but also the direction of travel.  Take the Euro-Area Consumer Confidence survey issued Friday. The absolute level came in at -6.5 points. Negative, can’t be good, right? Well, it was expected to come in at -7.0. Additionally, it was -7.1 last month, so its getting better.  Still negative though.  True, but since the survey started in 2005 it’s averaged around -10.  Moreover, it’s only been higher than -6.5 briefly in 2007, and a stretch of 2017/18. -6.5 might not seem like much, but it’s a good improvement.

Sadly, after 178 years, Thomas Cook will be no more as the company ceased trading
Persimmon (+4.4%) led the Brexit-sensitive stocks up on Friday on Juncker’s deal optimism
European futures look a bit mixed today, but the UK is up along with the US and Germany
… The US futures are likely up as there are reports this morning that the US requested the Chinese cancel their farm visits and not that the Chinese delegation cancelled themselves.

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -2.39 (-0.19%) at 1,283 (YTD: 18.39%; 5YR: 51.3%)
MSCI AC World Equities (USD) down -29.70 (-0.32%) at 9,245 (YTD: 18.95%; 5YR: 45.1%)
Barclays Global Aggregate Bonds down -0.15 (-0.03%) at 509 (YTD: 6.33%; 5YR: 9.7%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -14.72 (-0.49%) at 2,992 (YTD: 19.36%; 5YR: 50.9%)    
NASDAQ down -65.21 (-0.80%) at 8,118 (YTD: 22.34%; 5YR: 80.0%)    
Euro STOXX 50 up +18.74 (+0.53%) at 3,571 (YTD: 18.99%; 5YR: 11.4%)    
FTSE 100 down -11.50 (-0.16%) at 7,345 (YTD: 9.17%; 5YR: 10.0%)    
CAC up +31.70 (+0.56%) at 5,691 (YTD: 20.29%; 5YR: 30.5%)    
DAX up +10.31 (+0.08%) at 12,468 (YTD: 18.08%; 5YR: 29.9%)    
Nikkei 225  up +34.64 (+0.16%) at 22,079 (YTD: 10.31%; 5YR: 36.2%)    
Hang Seng down -228.40 (-0.86%) at 26,207 (YTD: 1.40%; 5YR: 9.9%)    
MSCI Emerging Markets up +4.70 (+0.46%) at 1,021 (YTD: 5.75%; 5YR: -1.1%)    
    
Selected Government Bond Yields    
US 2 Year up +0.02 at 1.71 (began the year at 2.49; 5 years ago it was 0.54)    
US 10 Year up +0.03 at 1.75 (began the year at 2.68; 5 years ago it was 2.53)    
UK 10 Year down -0.01 at 0.63 (began the year at 1.28; 5 years ago it was 2.49)    
Germany 10 Year down 0.00 at -0.53 (began the year at 0.24; 5 years ago it was 1.01)    
France 10 Year down 0.00 at -0.23 (began the year at 0.70; 5 years ago it was 1.35)    
Italy 10 Year down -0.01 at 0.91 (began the year at 2.74; 5 years ago it was 2.40)    
Japan 10 Year up +0.01 at -0.21 (began the year at -0.01; 5 years ago it was 0.54)    
Barclays EM Basket down -0.01 at 5.54 (began the year at 6.22; 5 years ago it was 5.33)
    
Selected Currencies    
$ weakened -0.0012 versus € (-0.11%) at 1.1019 ($: YTD: 3.78%; 5YR: 14.2%)    
€ strengthened +0.0045 versus £ (-0.40%) at 1.1298 (€: YTD: -1.49%; 5YR: 12.7%)    
$ strengthened +0.0036 versus £ (+0.29%) at 1.2449 ($: YTD: 2.33%; 5YR: 23.9%)    
¥ strengthened +0.1500 versus $ (+0.14%) at 107.7300 (¥: YTD: -1.79%; 5YR: 1.1%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.06 (-0.09%) at 64.56 (YTD: 21.42%; 5YR: -32.0%)    
WTI Crude ($/bbl) down -0.04 (-0.07%) at 58.09 (YTD: 27.92%; 5YR: -37.1%)    
Gold ($/ozt) down -2.98 (-0.20%) at 1513.92 (YTD: 18.05%; 5YR: 23.8%)    
Copper ($/mt) up +10.00 (+0.17%) at 5798.00 (YTD: -2.80%; 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