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27 September 2019

27/09/2019

Market Data and Morning Chat

Morning Chat 

So European equities rallied: Improved German consumer confidence data, Donald Trump’s optimistic comments that a trade deal could happen sooner rather than later and the US Justice Department affirming Trump didn’t breech campaign finance laws during his Ukraine call all put a positive spin on sentiment early in the day yesterday.  European equities rallied ½ to nearly 1% by the close. Unfortunately, the somewhat redacted whistleblower complaint that triggered the Democrats impeachment move was then released and it alleges the US President was “using the power of his office to solicit influence” in the upcoming election, reigniting the impeachment alarms. 

Tobacco gets smoked: Fresh from a decent rally over the collapse of the Philip Morris / Altria merger, Imperial Brands filtered their own bad news through to the markets. The company reported earnings growth went up in a puff of vapour as health issues stubbed out e-cigarette sales following US marketing restrictions. In the US, there have been mysterious deaths linked to vaping.  Company management had anticipated earnings per share growth of 4 to 8% over the medium-term, now they expect no growth at all. Imperial Brands shares were smoked by 12.9% following the release, although other tobacco companies rallied.

Collecting reports: A number of company reports hit the news yesterday.  Carnival Cruise lines shares sunk 8.6% following disappointing guidance numbers.  Management noted booking numbers were running lower than last year, which was the more disappointing because their earnings were 11.8% up on last year and earnings beat expectations.  Micron, down 6.6%, also beat on earnings, but saw a slippage in cash flow and warned of an impact from the Huawei ban and weakening NAND demand forcing them to lower guidance. At least  Conagra rallied, up 3.7%, as the Pinnacle Foods purchase generated tasty sales growth and an earnings beat.

Sterling down after EU negotiators said they still await “legal and operational” Brexit proposals
US-China trade talks are expected to resume on October 10 amid renewed optimism
Expect US consumer spending and durable goods orders data today will remain upbeat
Fitness firm Peloton rode home on wonky wheels as shares fell 13% on day one of trading

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +0.48 (+0.04%) at 1,276 (YTD: 17.75%; 5YR: 50.6%)
MSCI AC World Equities (USD) down -4.09 (-0.04%) at 9,187 (YTD: 18.21%; 5YR: 44.8%)
Barclays Global Aggregate Bonds up +0.31 (+0.06%) at 510 (YTD: 6.47%; 5YR: 10.3%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -7.25 (-0.24%) at 2,978 (YTD: 18.78%; 5YR: 50.2%)    
NASDAQ down -46.72 (-0.58%) at 8,031 (YTD: 21.03%; 5YR: 78.0%)    
Euro STOXX 50 up +19.15 (+0.55%) at 3,532 (YTD: 17.68%; 5YR: 9.7%)    
FTSE 100 up +61.09 (+0.84%) at 7,351 (YTD: 9.26%; 5YR: 10.6%)    
CAC up +36.77 (+0.66%) at 5,621 (YTD: 18.81%; 5YR: 27.9%)    
DAX up +54.36 (+0.44%) at 12,289 (YTD: 16.38%; 5YR: 29.5%)    
Nikkei 225  down -169.34 (-0.77%) at 21,879 (YTD: 9.31%; 5YR: 34.8%)    
Hang Seng down -29.22 (-0.11%) at 26,013 (YTD: 0.65%; 5YR: 9.9%)    
MSCI Emerging Markets up +3.73 (+0.37%) at 1,009 (YTD: 4.51%; 5YR: -1.4%)    
    
Selected Government Bond Yields    
US 2 Year unchanged at 1.66 (began the year at 2.49; 5 years ago it was 0.57)    
US 10 Year up +0.01 at 1.70 (began the year at 2.68; 5 years ago it was 2.53)    
UK 10 Year down -0.02 at 0.52 (began the year at 1.28; 5 years ago it was 2.47)    
Germany 10 Year up +0.00 at -0.58 (began the year at 0.24; 5 years ago it was 0.97)    
France 10 Year up +0.00 at -0.29 (began the year at 0.70; 5 years ago it was 1.31)    
Italy 10 Year up +0.01 at 0.83 (began the year at 2.74; 5 years ago it was 2.38)    
Japan 10 Year up +0.01 at -0.24 (began the year at -0.01; 5 years ago it was 0.52)    
Barclays EM Basket down -0.02 at 5.51 (began the year at 6.22; 5 years ago it was 5.35)
    
Selected Currencies    
$ strengthened +0.0014 versus € (+0.13%) at 1.0912 ($: YTD: 4.72%; 5YR: 14.0%)    
€ weakened -0.0005 versus £ (+0.04%) at 1.1297 (€: YTD: -1.48%; 5YR: 13.3%)    
$ strengthened +0.0008 versus £ (+0.06%) at 1.2328 ($: YTD: 3.28%; 5YR: 24.1%)    
¥ strengthened +0.0600 versus $ (+0.06%) at 107.7500 (¥: YTD: -1.77%; 5YR: 1.5%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.34 (-0.55%) at 61.77 (YTD: 16.17%; 5YR: -35.1%)    
WTI Crude ($/bbl) up +0.09 (+0.16%) at 56.41 (YTD: 24.22%; 5YR: -39.7%)    
Gold ($/ozt) down -0.34 (-0.02%) at 1504.42 (YTD: 17.31%; 5YR: 23.5%)    
Copper ($/mt) down -65.00 (-1.12%) at 5722.00 (YTD: -4.07%; 5YR: -14.8%)    
    
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