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24 September 2019

24/09/2019

Market Data and Morning Chat

Morning Chat

Europe was a bit of a let-down: Given the slide in US equities Friday, Europe was poised to fall yesterday – index futures were mixed at best – but with news that the Chinese trip to the Midwest was cancelled by the US, sentiment was turning up. Then came the release of the Markit flash manufacturing PMI surveys. France was expected to see 52.7, Germany 44.0.  Instead they were 51.6 and 41.4 respectively. The Services PMIs were also below expectations.  German data was the most dramatic with a steep decline in factory activity pointing to a decided need for as-yet-withheld fiscal stimulus.

And you’re worried about the US data: Don’t be. The US IHS Markit flash manufacturing PMI rose to 51.0 – a 5-month high – beating the expected 50.3 reading and lifting the score from the decade low last month.  It signalled a modest improvement through a stronger rate of output supported by a pick-up in new order growth. OK, exports remained weak, but, noting he obvious, there is an on-going trade dispute with China.  At least it still points to GDP growth around 1½% - better than slow growth – and it allowed US equities to at least close flat on the day.

Tui the victor the spoils: The media has been filled, sadly, with news of the demise of Thomas Cook, the 178-year old travel firm.  The business appears to have been killed by being in a low-margin business with high fixed overheads arising from the high street operations, a difficult cash flow process and £1.7billion in debt. Internet rivals cut heavily into their business – when was the last time you booked your holiday in the shop? Thomas Cook’s death though has bolstered the fortunes of the competition. Tui shares were flying, up 6.8% to top the market, with Easyjet up 4.6%.

At least the equity futures appear happier today with all but Italy’s moving higher
… and China’s bean good giving new waivers for US soy shipments to arrive tariff-free
Maybe today’s German IFO business climate survey and French business survey will help
Anheuser-Busch’s hoping to brew up $5billion in its IPO of the Asian Budweiser APAC business
Netflix is on a different channel as shares are now down in 2019 after being up 46% at one stage

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -2.67 (-0.21%) at 1,280 (YTD: 18.14%; 5YR: 50.3%)
MSCI AC World Equities (USD) down -15.73 (-0.17%) at 9,229 (YTD: 18.75%; 5YR: 44.2%)
Barclays Global Aggregate Bonds up +1.51 (+0.30%) at 511 (YTD: 6.64%; 5YR: 10.2%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -0.29 (-0.01%) at 2,992 (YTD: 19.34%; 5YR: 49.7%)    
NASDAQ down -5.21 (-0.06%) at 8,112 (YTD: 22.26%; 5YR: 78.1%)    
Euro STOXX 50 down -34.42 (-0.96%) at 3,537 (YTD: 17.84%; 5YR: 9.0%)    
FTSE 100 down -18.84 (-0.26%) at 7,326 (YTD: 8.89%; 5YR: 9.2%)    
CAC down -60.02 (-1.05%) at 5,631 (YTD: 19.03%; 5YR: 27.6%)    
DAX down -125.68 (-1.01%) at 12,342 (YTD: 16.89%; 5YR: 27.7%)    
Nikkei 225  up +19.75 (+0.09%) at 22,099 (YTD: 10.41%; 5YR: 36.4%)    
Hang Seng up +51.27 (+0.20%) at 26,274 (YTD: 1.66%; 5YR: 9.8%)    
MSCI Emerging Markets down -6.03 (-0.59%) at 1,015 (YTD: 5.12%; 5YR: -1.9%)    
    
Selected Government Bond Yields    
US 2 Year down -0.01 at 1.67 (began the year at 2.49; 5 years ago it was 0.59)    
US 10 Year down -0.02 at 1.71 (began the year at 2.68; 5 years ago it was 2.56)    
UK 10 Year down -0.08 at 0.55 (began the year at 1.28; 5 years ago it was 2.48)    
Germany 10 Year up +0.00 at -0.58 (began the year at 0.24; 5 years ago it was 1.00)    
France 10 Year up +0.01 at -0.28 (began the year at 0.70; 5 years ago it was 1.34)    
Italy 10 Year up +0.01 at 0.84 (began the year at 2.74; 5 years ago it was 2.37)    
Japan 10 Year down -0.03 at -0.24 (began the year at -0.01; 5 years ago it was 0.52)    
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 -0.0005 versus € (-0.05%) at 1.0992 ($: YTD: 4.02%; 5YR: 14.0%)    
€ unchanged 0.0000 versus £ (0.00%) at 1.1316 (€: YTD: -1.64%; 5YR: 12.9%)    
$ weakened -0.0007 versus £ (-0.06%) at 1.2439 ($: YTD: 2.41%; 5YR: 23.9%)    
¥ weakened -0.0500 versus $ (-0.05%) at 107.5500 (¥: YTD: -1.96%; 5YR: 1.2%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.16 (-0.25%) at 63.79 (YTD: 19.97%; 5YR: -32.9%)    
WTI Crude ($/bbl) up +0.40 (+0.69%) at 58.49 (YTD: 28.80%; 5YR: -36.8%)    
Gold ($/ozt) down -0.41 (-0.03%) at 1521.83 (YTD: 18.67%; 5YR: 25.0%)    
Copper ($/mt) down -20.00 (-0.34%) at 5778.00 (YTD: -3.13%; 5YR: -14.0%)    
    
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