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15th May 2020

15/05/2020

Market Data and Morning Chat

Morning Chat

Under Pressure: Investors were certainly not looking forward to Thursday lunchtime and the release of the latest US initial jobless claims data. The major European equity indices weakened in anticipation and were down over 2¼% as the numbers hit the newswires. Expectations hoped for a mere 2.5million, but, heartache, the reality was 2.98million topped by Connecticut’s 298,000… wait, what? 1.8% of the US working population joins the unemployed, but somehow Connecticut saw 8.4% of its entire population?? The error’s still in the numbers, so the truth’s closer to the estimate and after a further lurch down, Those falling equities rebounded. 

Dancing in Wall Street: Now, Europe still closed down, and if you switched off there, you left to news of Euro-area banks and mid-sized companies having deposited the weakest performance.  However, slick news that OPEC+ producers had reduced their oil exports by nearly 6million barrels a day. 1.4million barrels a day cut from the States' production and BP CFO Brian Gilvary stating oil demand is surging back led to oil prices gushing up 9%. Meanwhile, banks dominated the top performers for some reason – some say short-covering, some say building a position – either way, the result pushed US markets into positive territory. 

Friday on my mind: Today the US and China get to assess their April retail sales and industrial production releases. China’s started already and set an optimistic tone. OK, having retail sales decline 7.5% when a 6.0% decline was expected doesn’t sound good, but it was still the weakest decline since December. Better though was news industrial production, expected to rise 1.5% year-on-year actually jumped 3.9%, the first positive reading this year, and Asian markets rallied as a result. Now if the US can best their forecasts (both series expected to fall by 12%) Friday might be worth thinking about. 

With China’s news, European futures are up over 1% while the US is modestly positive
… while easing lockdown measures in Japan also helped set their equities on a positive track
… The US may also be concerned whether the JOLTS report, expected at 5.8million, will shock
The current session of Brexit talks covering fisheries, aviation, social security…
… oh, & trade in goods & services… looks set to close today with little sign of compromise
Plus, the EU has threatened the UK with legal action over freedom of movement breaches!
Singapore Airlines (+0.8%) despite landing their biggest quarterly loss ever, a 22% sales fall
… and losing their final dividend somewhere in transit as it wasn’t on the carousel.
Deutsche Telekom (+1.3%)dialled up robust numbers and confirmed full-year guidance
Ubisoft (-0.4%) saw a Covid-bounce playing out, but warned it may delay future game releases
Applied Materials (+10.8% aftermarket), while short of estimates, served up hot chip guidance

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +0.55 (+0.05%) at 1,192 (YTD: -13.33%; 5YR: 27.5%)
MSCI AC World Equities (USD) up +8.24 (+0.10%) at 8,543 (YTD: -14.39%; 5YR: 25.3%)
Barclays Global Aggregate Bonds down -0.13 (-0.03%) at 516 (YTD: 0.80%; 5YR: 13.8%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +32.50 (+1.15%) at 2,853 (YTD: -11.71%; 5YR: 34.4%)
NASDAQ up +80.56 (+0.91%) at 8,944 (YTD: -0.32%; 5YR: 77.2%)
Euro STOXX 50 down -50.32 (-1.79%) at 2,760 (YTD: -26.30%; 5YR: -22.7%)
FTSE 100 down -162.51 (-2.75%) at 5,742 (YTD: -23.88%; 5YR: -17.5%)
CAC down -71.82 (-1.65%) at 4,273 (YTD: -28.52%; 5YR: -14.4%)
DAX down -205.64 (-1.95%) at 10,337 (YTD: -21.98%; 5YR: -9.7%)
Nikkei 225  up +122.69 (+0.62%) at 20,037 (YTD: -15.30%; 5YR: 1.5%)
Hang Seng up +16.55 (+0.07%) at 23,846 (YTD: -15.41%; 5YR: -14.3%)
MSCI Emerging Markets down -8.32 (-0.92%) at 901 (YTD: -19.18%; 5YR: -13.7%)
 
Selected Government Bond Yields
US 2 Year up +0.00 at 0.15 (began the year at 1.57; 5 years ago it was 0.54)
US 10 Year unchanged at 0.62 (began the year at 1.92; 5 years ago it was 2.14)
UK 10 Year down 0.00 at 0.20 (began the year at 0.82; 5 years ago it was 1.88)
Germany 10 Year up +0.01 at -0.53 (began the year at -0.19; 5 years ago it was 0.62)
France 10 Year up +0.01 at -0.04 (began the year at 0.12; 5 years ago it was 0.90)
Italy 10 Year down -0.02 at 1.79 (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 0.40)
Barclays EM Basket up +0.01 at 3.74 (began the year at 4.27; 5 years ago it was 5.07)
 
Selected Currencies
$ weakened -0.0026 versus € (-0.24%) at 1.0808 ($: YTD: 3.75%; 5YR: 5.5%)
€ strengthened +0.0019 versus £ (-0.17%) at 1.1293 (€: YTD: 4.60%; 5YR: 22.1%)
$ weakened -0.0008 versus £ (-0.07%) at 1.2205 ($: YTD: 7.98%; 5YR: 22.6%)
¥ weakened -0.0200 versus $ (-0.02%) at 107.2200 (¥: YTD: -1.27%; 5YR: 11.4%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.65 (+2.16%) at 30.79 (YTD: -53.64%; 5YR: -53.2%)
WTI Crude ($/bbl) up +2.27 (+8.98%) at 27.56 (YTD: -54.86%; 5YR: -54.0%)
Gold ($/ozt) up +5.56 (+0.32%) at 1737.51 (YTD: 14.10%; 5YR: 41.9%)
Copper ($/mt) down -22.00 (-0.42%) at 5202.00 (YTD: -15.74%; 5YR: -18.7%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros