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11th May 2020

11/05/2020

Market Data and Morning Chat

Morning Chat

Fall-out: The US non-farm payrolls number announced Friday tallied with Wednesday’s ADP data.  Down 20.5million, meaning the fall-out from the US Covid-19 response was the erasure of all the jobs created since February 2011 and a spike in the unemployment rate from November’s 50-year low 3.6% to 14.7% - a number not seen since the great depression. Yet the market reactions might surprise you.. The US 10-year yield rose… 0.04% - not even the week high.  Meanwhile, US equities rallied to close up 3½% for the week led by the energy (+8¼%) & tech (+6.6%) sectors while Europe was mixed.

Too much information: It makes you wonder what might sting markets this week. We’ll police a range of earnings numbers, including the likes of the cruise lines, Toyota, Sony, Cisco & Vodafone alongside various retailer names, but no economy giants.  The US & China release retail sales numbers. Plus there’s industrial production from the UK, Italy, Mexico & US. Add a range of inflation data, UK construction numbers and employment data from Australia & France. But it’s likely the Covid-19 case pathway and Thursday’s US initial jobless claims – with both expected to trend lower – that’ll likely have the biggest impact.

Don’t stand so close to me: The UK joined European neighbours in easing lockdown restrictions, but somewhat confusingly.  Prime Minister Boris Johnson announced the new mantra was “Stay Alert” rather than “Stay at Home”. Except in Wales, Scotland or Northern Ireland where they’re advocating “Stay at Home” still. So England then. Work from home if you can, but if not, you’re encouraged to go to work – so on your bike, as you should avoid public transport if possible. You can enjoy public spaces, but I’m not sure what happens if you drive out of England. Oh, and keep 2 metres apart.Declining Covid-19 deaths are translating to increasing equity futures this morning

… while Japan has rallied 1.7% on news of a further stimulative supplementary budget.
… and China’s central bank stated it is exploring further actions to support jobs and growth
Noble Energy (+13.2%) gushed up as it announced a Q1 profit well ahead of estimates
Utility Exelon (+6.8%) showed some spark on cost-cutting despite lowering Q2 guidance
Siemens (+4.8%) stated production & supply on track despite Covid-19 while demand bottoming
ING Bank (+3.6%) deposits some reassuring results – increased provisions & limited energy hit

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +17.92 (+1.49%) at 1,222 (YTD: -11.16%; 5YR: 31.2%)
MSCI AC World Equities (USD) up +153.81 (+1.78%) at 8,803 (YTD: -11.79%; 5YR: 30.5%)
Barclays Global Aggregate Bonds down -0.24 (-0.05%) at 516 (YTD: 0.78%; 5YR: 15.1%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +48.61 (+1.69%) at 2,930 (YTD: -9.32%; 5YR: 39.2%)
NASDAQ up +141.66 (+1.58%) at 9,121 (YTD: 1.66%; 5YR: 82.7%)
Euro STOXX 50 up +27.51 (+0.96%) at 2,908 (YTD: -22.35%; 5YR: -19.8%)
FTSE 100 up +82.22 (+1.40%) at 5,936 (YTD: -21.30%; 5YR: -15.8%)
CAC up +48.20 (+1.07%) at 4,550 (YTD: -23.89%; 5YR: -9.5%)
DAX up +145.21 (+1.35%) at 10,904 (YTD: -17.70%; 5YR: -6.6%)
Nikkei 225  up +211.57 (+1.05%) at 20,391 (YTD: -13.81%; 5YR: 3.9%)
Hang Seng up +343.35 (+1.42%) at 24,574 (YTD: -12.83%; 5YR: -11.3%)
MSCI Emerging Markets up +14.77 (+1.65%) at 912 (YTD: -18.21%; 5YR: -12.0%)
 
Selected Government Bond Yields
US 2 Year unchanged at 0.16 (began the year at 1.57; 5 years ago it was 0.62)
US 10 Year up +0.01 at 0.69 (began the year at 1.92; 5 years ago it was 2.28)
UK 10 Year unchanged at 0.24 (began the year at 0.82; 5 years ago it was 1.95)
Germany 10 Year up +0.01 at -0.53 (began the year at -0.19; 5 years ago it was 0.61)
France 10 Year up +0.00 at -0.04 (began the year at 0.12; 5 years ago it was 0.90)
Italy 10 Year down -0.07 at 1.78 (began the year at 1.41; 5 years ago it was 1.77)
Japan 10 Year up +0.01 at 0.01 (began the year at -0.02; 5 years ago it was 0.39)
Barclays EM Basket down -0.02 at 3.83 (began the year at 4.27; 5 years ago it was 5.08)
 
Selected Currencies
$ strengthened +0.0004 versus € (+0.04%) at 1.0843 ($: YTD: 3.44%; 5YR: 2.8%)
€ strengthened +0.0007 versus £ (-0.06%) at 1.1445 (€: YTD: 3.22%; 5YR: 22.0%)
$ strengthened +0.0012 versus £ (+0.10%) at 1.2410 ($: YTD: 6.43%; 5YR: 20.4%)
¥ weakened -0.3600 versus $ (-0.34%) at 106.9700 (¥: YTD: -1.51%; 5YR: 12.2%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.70 (-2.45%) at 27.92 (YTD: -57.96%; 5YR: -56.3%)
WTI Crude ($/bbl) up +0.93 (+3.95%) at 24.48 (YTD: -59.91%; 5YR: -58.8%)
Gold ($/ozt) down -4.98 (-0.29%) at 1705.15 (YTD: 11.97%; 5YR: 44.1%)
Copper ($/mt) up +76.00 (+1.46%) at 5274.00 (YTD: -14.58%; 5YR: -17.6%)
 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros