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15th April 2020

15/04/2020

Market Data and Morning Chat

Morning Chat


Facts are stubborn things, but statistics are pliable: The words of Mark Twain. With Covid-19, we’re in the realms of statistics, with estimates of those infected, death rates and testing numbers. Without a commonality of statistical method, no one has a true handle on the real numbers.  But within each country’s data-set, the trends appear to be gradually improving. Throw in political debate on the easing of lockdowns, throw in better-than-expected Chinese trade data and throw in solid earnings from Johnson & Johnson (+5.6%) with a dividend increase to boot and one can see why global equities generally rallied yesterday.

The island of red in the sea of green: Gains there may have been, but UK equities saw red, slipping just over ¾%. While European news flow is over when lockdowns might end, news flow here is whether the government will announce a lockdown extension this week (The three-week lockdown period expires tomorrow). Well, that and various estimates over the extent to which GDP will shrink this quarter with worst being the Office of Budget Responsibility citing a severe but temporary 13% … if the lockdown extends for three months (we’re not even at a month yet). Those statistics again.

2020 provision: Alongside Johnson & Johnson, JP Morgan (-2.6%) and Wells Fargo (-3.9%) completed the big-name earnings announcements.   Neither had a great day, but they did still post some profits.  Moreover, revenue numbers were not so bad (JP Morgan even saw a 32% increase in trading revenues). However, both banks opted to significantly boost provisions for bad loans setting aside $8.3billion and $3.1billion respectively and significantly trim guidance. Donald Trump on the other hand didn’t trim his guidance as he still is looking ahead to May 1st for some state economies to emerge from lockdown, though that’s probably too optimistic.

… and those earnings as leaving equity futures mixed on lower-than-usual volumes
Delivery businesses Ocado (+8.5%) & Just Eat (+1.3%) among better names yesterday…
… as AstraZeneca (+6.8%) with chemicals & materials names also performing ore-right
ASML (+3.0%) chipped in today with Q1 profits up & strong sales but unclear Covid-19 outlook
Cruise lines float to the top of US names with more people booking cruises than before the virus
The US deposits more bank earnings today with both Bank of America & Goldman’s reporting

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +26.13 (+2.25%) at 1,187 (YTD: -13.66%; 5YR: 26.5%)
MSCI AC World Equities (USD) up +213.99 (+2.57%) at 8,552 (YTD: -14.30%; 5YR: 27.5%)
Barclays Global Aggregate Bonds up +1.53 (+0.30%) at 515 (YTD: 0.68%; 5YR: 14.9%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +84.43 (+3.06%) at 2,846 (YTD: -11.91%; 5YR: 35.1%)
NASDAQ up +323.32 (+3.95%) at 8,516 (YTD: -5.09%; 5YR: 69.9%)
Euro STOXX 50 up +24.95 (+0.86%) at 2,918 (YTD: -22.09%; 5YR: -23.3%)
FTSE 100 down -51.35 (-0.88%) at 5,791 (YTD: -23.22%; 5YR: -18.4%)
CAC up +17.06 (+0.38%) at 4,524 (YTD: -24.32%; 5YR: -13.9%)
DAX up +131.82 (+1.25%) at 10,697 (YTD: -19.27%; 5YR: -12.5%)
Nikkei 225  up +1.39 (+0.01%) at 19,640 (YTD: -16.98%; 5YR: -1.2%)
Hang Seng down -17.51 (-0.07%) at 24,418 (YTD: -13.38%; 5YR: -11.6%)
MSCI Emerging Markets up +13.14 (+1.49%) at 896 (YTD: -19.59%; 5YR: -13.6%)
 
Selected Government Bond Yields
US 2 Year down 0.00 at 0.21 (began the year at 1.57; 5 years ago it was 0.50)
US 10 Year down -0.01 at 0.74 (began the year at 1.92; 5 years ago it was 1.89)
UK 10 Year up +0.04 at 0.34 (began the year at 0.82; 5 years ago it was 1.56)
Germany 10 Year up +0.00 at -0.38 (began the year at -0.19; 5 years ago it was 0.11)
France 10 Year up +0.00 at 0.10 (began the year at 0.12; 5 years ago it was 0.35)
Italy 10 Year up +0.00 at 1.78 (began the year at 1.41; 5 years ago it was 1.26)
Japan 10 Year up +0.00 at 0.02 (began the year at -0.02; 5 years ago it was 0.32)
Barclays EM Basket down -0.03 at 4.21 (began the year at 4.27; 5 years ago it was 4.93)
 
Selected Currencies
$ weakened -0.0010 versus € (-0.09%) at 1.0975 ($: YTD: 2.26%; 5YR: -3.4%)
€ strengthened +0.0015 versus £ (-0.13%) at 1.1483 (€: YTD: 2.87%; 5YR: 21.4%)
$ strengthened +0.0004 versus £ (+0.03%) at 1.2603 ($: YTD: 4.98%; 5YR: 14.8%)
¥ strengthened +0.0600 versus $ (+0.06%) at 107.0300 (¥: YTD: -1.45%; 5YR: 11.3%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.14 (-0.57%) at 24.48 (YTD: -63.14%; 5YR: -59.3%)
WTI Crude ($/bbl) down -2.30 (-10.26%) at 20.11 (YTD: -67.07%; 5YR: -62.3%)
Gold ($/ozt) down -8.48 (-0.49%) at 1725.74 (YTD: 13.32%; 5YR: 44.1%)
Copper ($/mt) up +143.50 (+2.86%) at 5163.00 (YTD: -16.38%; 5YR: -13.2%)
 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros