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13th July 2020

13/07/2020

Market Data and Morning Chat

Morning Chat

The spirit of Carnival: Last week likely felt like a bad Covid-19 news week, what with cases increasing in Texas and Florida. Interestingly, news stories on the pandemic spiked Tuesday but subsided as the week wore on. Still, it was enough to send markets down and end the positive streak they’d been on, and a possible down week was looming, but Friday sailed along lifting the majority of indices into positive territory. Friday was a decidedly non-coronavirus day, led by Carnival (+10.8%) and Royal Caribbean (+9.9%) with United Airlines (8.3%) and Norwegian Cruise Lines (+7.9%) floating in the top ten.
  
What did happen to May? 
The month. The UK sees a range of May data this week with a little June thrown in for good measure.  Tuesday sees construction output and industrial production data alongside the month-on-month change in UK GDP.  The latter two expected to show a strong rebound from April with both going from slightly worse than -20% to 5-6%. Construction output isn’t expected to recover so much. Wednesday is June inflation day with little to no change expected there either. Then Thursday delivers the May unemployment rate forecast at 4.1%. Fingers crossed as employment’s a key issue.
  
Maybe there’ll be something else to bank on. 
The earning season perhaps. Maybe there’ll be a bit of fizz today with Pepsi’s numbers, but it’s the next two days’ banks numbers that will probably be telling – JP Morgan, Citigroup and Wells all report Tuesday, Goldman’s, Bank of New York and US Bancorp report Wednesday. (oh, and Bank of America & Morgan Stanley Thursday). Thursday will also have a tinge of Covid-19 lockdown, with Netflix, Abbot Labs and Johnson & Johnson all streaming through.   Friday will show more of the banks numbers plus also railroad Kansas City Southern chugging along too.
 
 

There’s loads of meetings this week too – Brexit,  BoJ, G20 Finance Ministers, OPEC,…
 
... (Brent crude trading off about 3/4% in anticipation after oil rallied over 2% Friday)...
 
… and the next leg of discussions on the long-awaited €750billion EU recovery plan 
 
With everything to anticipate it’s great to see equity futures kicking off the week up ½ to 1½%
 
… while China (+2.3%), Japan (+1.9%) & Hong Kong (1.5%) showing strong gains this morning
 
… and for the first time in weeks, the S&P has been outperforming the Nasdaq Friday & today
 
Poland waits with ‘bated breath as Presidential election results lie on a 50.8%-49.6% knife-edge
 
The Office of US Trade Representative lifted the 25% French luxury goods tariff  for 180 days…
 
… to discuss the French digital tax due 2021. The move may lift L’Oreal, LVMH, & Kering

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +7.42 (+0.56%) at 1,344 (YTD: -2.28%; 5YR: 45.7%)
MSCI AC World Equities (USD) up +80.88 (+0.84%) at 9,686 (YTD: -2.94%; 5YR: 45.4%)
Barclays Global Aggregate Bonds up +0.45 (+0.08%) at 531 (YTD: 3.85%; 5YR: 21.1%)
 
Selected Equity Indices (Capital returns)

S&P 500 up +32.99 (+1.05%) at 3,185 (YTD: -1.42%; 5YR: 51.7%)
NASDAQ up +69.69 (+0.66%) at 10,617 (YTD: 18.33%; 5YR: 109.4%)
Euro STOXX 50 up +35.05 (+1.07%) at 3,296 (YTD: -11.99%; 5YR: -8.2%)
FTSE 100 up +45.79 (+0.76%) at 6,095 (YTD: -19.19%; 5YR: -9.5%)
CAC up +49.47 (+1.01%) at 4,970 (YTD: -16.85%; 5YR: -0.6%)
DAX up +144.25 (+1.15%) at 12,634 (YTD: -4.64%; 5YR: 10.0%)
Nikkei 225  up +448.30 (+2.01%) at 22,739 (YTD: -3.88%; 5YR: 13.2%)
Hang Seng up +363.62 (+1.41%) at 26,091 (YTD: -7.44%; 5YR: 3.4%)
MSCI Emerging Markets down -10.42 (-0.96%) at 1,069 (YTD: -4.07%; 5YR: 13.4%)
 
Selected Government Bond Yields

US 2 Year down -0.01 at 0.15 (began the year at 1.57; 5 years ago it was 0.68)
US 10 Year down -0.01 at 0.63 (began the year at 1.92; 5 years ago it was 2.45)
UK 10 Year down 0.00 at 0.16 (began the year at 0.82; 5 years ago it was 2.12)
Germany 10 Year down 0.00 at -0.47 (began the year at -0.19; 5 years ago it was 0.85)
France 10 Year up +0.00 at -0.14 (began the year at 0.12; 5 years ago it was 1.25)
Italy 10 Year down 0.00 at 1.22 (began the year at 1.41; 5 years ago it was 2.11)
Japan 10 Year up +0.01 at 0.02 (began the year at -0.02; 5 years ago it was 0.45)
Barclays EM Basket down -0.02 at 3.75 (began the year at 4.27; 5 years ago it was 5.38)
 
Selected Currencies

$ weakened -0.0031 versus € (-0.27%) at 1.1331 ($: YTD: -0.91%; 5YR: -2.8%)
€ unchanged 0.0000 versus £ (0.00%) at 1.1174 (€: YTD: 5.72%; 5YR: 26.0%)
$ weakened -0.0033 versus £ (-0.26%) at 1.2660 ($: YTD: 4.55%; 5YR: 18.4%)
¥ weakened -0.0100 versus $ (-0.01%) at 106.9200 (¥: YTD: -1.55%; 5YR: 15.4%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.28 (-0.65%) at 42.66 (YTD: -35.77%; 5YR: -25.5%)
WTI Crude ($/bbl) up +0.93 (+2.35%) at 40.55 (YTD: -33.59%; 5YR: -23.1%)
Gold ($/ozt) up +12.42 (+0.69%) at 1807.08 (YTD: 18.67%; 5YR: 56.2%)
Copper ($/mt) up +112.00 (+1.78%) at 6412.00 (YTD: 3.85%; 5YR: 14.7%)


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