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19th March 2020

19/03/2020

Market Data and Morning Chat

Morning Chat

Roller Coaster: One day up, one day down. For now, equity markets are gyrating on the daily tally of new Covid-19 cases and daily statements by world leaders outlining further defensive plans. Wednesday, while the UK weather was settling down, spring-like even – which may in time help hold back Covid-19 – the markets acted up. In Europe, we had an inkling from the futures of a probable sell-off and the 4-5% declines were much as forecast. Over in the US, Wall Street saw another day, a record eighth trading day, with a greater-than 4% swing with the indices down around 5%.
 
These days: The scale of disruption caused by the Covid-19 virus to our everyday life is significant, however, governments are looking to offer something for the pain and doing as much as possible to ensure we are not just living on a prayer. Now it was the turn of the European Central Bank with their new Pandemic Emergency Purchase Programme deploying £700billion for securities purchases while also expanding the range of eligible assets and easing collateral standards. While the hardest part is the night, maintaining any positive sentiment from day-to-day, it does appear this latest effort is again supporting futures.

Runaway: Equities are not the only moving part in the fluctuating investment markets.  Gold has slid back to just under $1500 assumedly because some market players sought to raise cash from stable assets. Properties sales have slowed, leading seven property managers to gate their funds – much as happened in 2008. Bond yields, having declined, are now rebounding with gusto as the UK 10-year rallied back to where it started the year. Oil is sliding all over the place. At least UK investors’ dollar assets offer some cheer, the pound’s fallen to its lowest level against the dollar since 1985, lifting international returns by 12%.

Japan started off up over 2% over the ECB plan and held half the gain only slowly drifting down
… while European market futures hold steady and flat, the US off slightly. It’s a start.
Australia chipped in £45billion of stimulus bringing the total pledged globally to £1.6trillion…
… equating to nearly 2¼% of total 2019 global GDP & global growth is still expected at over 1% 

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -48.27 (-4.57%) at 1,007 (YTD: -26.75%; 5YR: 9.7%)
MSCI AC World Equities (USD) down -385.29 (-5.11%) at 7,149 (YTD: -28.36%; 5YR: 8.9%)
Barclays Global Aggregate Bonds down -11.02 (-2.18%) at 496 (YTD: -3.14%; 5YR: 11.4%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -131.09 (-5.18%) at 2,398 (YTD: -25.77%; 5YR: 14.8%)    
NASDAQ down -344.94 (-4.70%) at 6,990 (YTD: -22.10%; 5YR: 40.0%)    
Euro STOXX 50 down -144.68 (-5.72%) at 2,386 (YTD: -36.30%; 5YR: -35.0%)    
FTSE 100 down -214.32 (-4.05%) at 5,081 (YTD: -32.64%; 5YR: -27.0%)    
CAC down -236.94 (-5.94%) at 3,755 (YTD: -37.19%; 5YR: -25.5%)    
DAX down -497.39 (-5.56%) at 8,442 (YTD: -36.28%; 5YR: -29.1%)    
Nikkei 225  down -173.72 (-1.04%) at 16,553 (YTD: -30.03%; 5YR: -15.0%)    
Hang Seng down -337.81 (-1.52%) at 21,954 (YTD: -22.12%; 5YR: -10.3%)    
MSCI Emerging Markets down -38.87 (-4.70%) at 788 (YTD: -29.32%; 5YR: -18.4%)    
    
Selected Government Bond Yields    
US 2 Year down -0.02 at 0.51 (began the year at 1.57; 5 years ago it was 0.61)    
US 10 Year down -0.03 at 1.17 (began the year at 1.92; 5 years ago it was 1.97)    
UK 10 Year up +0.24 at 0.80 (began the year at 0.82; 5 years ago it was 1.53)    
Germany 10 Year down -0.12 at -0.36 (began the year at -0.19; 5 years ago it was 0.19)
France 10 Year down -0.29 at 0.06 (began the year at 0.12; 5 years ago it was 0.45)    
Italy 10 Year down -0.88 at 1.55 (began the year at 1.41; 5 years ago it was 1.25)    
Japan 10 Year down 0.00 at 0.06 (began the year at -0.02; 5 years ago it was 0.33)    
Barclays EM Basket up +0.22 at 4.70 (began the year at 4.27; 5 years ago it was 5.08)
    
Selected Currencies    
$ weakened -0.0027 versus € (-0.25%) at 1.0875 ($: YTD: 3.15%; 5YR: -2.3%)    
€ strengthened +0.0139 versus £ (-1.31%) at 1.0594 (€: YTD: 11.51%; 5YR: 30.7%)    
$ strengthened +0.0120 versus £ (+1.03%) at 1.1519 ($: YTD: 13.15%; 5YR: 21.8%)    
¥ weakened -0.5200 versus $ (-0.48%) at 108.9600 (¥: YTD: 0.35%; 5YR: 11.0%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.47 (-1.91%) at 24.09 (YTD: -63.73%; 5YR: -54.1%)    
WTI Crude ($/bbl) down -6.58 (-24.42%) at 20.37 (YTD: -66.64%; 5YR: -54.4%)    
Gold ($/ozt) down -4.90 (-0.33%) at 1483.49 (YTD: -2.58%; 5YR: 26.9%)    
Copper ($/mt) down -399.00 (-7.76%) at 4745.00 (YTD: -23.15%; 5YR: -16.3%)    

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros