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1st May 2020

01/05/2020

Market Data and Morning Chat

Morning Chat

I’ve had a perfectly wonderful afternoon – But this wasn’t it: After Wednesday’s optimism, tales of Gilead’s Remdesivir speeding up recovery and various lockdown protocols being eased laid the foundations for a decent Thursday.  However, after the initial upbeat start it was mostly downhill after that. Asian markets may have closed up, but European and US equities saw red. Weaker-than-hoped French and Eurozone GDP data with rates of -5.8% and -3.8% respectively didn’t help sentiment.  Then Apple’s bruising earnings and Amazon sentiment-dampening decision to spend all profits fighting Covid-19  showed even these big names have been sorely challenged by the situation.

Mayday, Mayday! Sounds like a cycle race, but going into the month’s last day of trading, April 2020 had a reasonable shot to post the best US monthly gain since 1938. Even with the last minute stumble, the monthly 12.7% recovery is the third best since WWII!   All the bundles of stimulus help aided by now-recovering oil prices (there was another improvement yesterday) and healthier Covid-19 news improved the outlook enough to push the US technology sector into positive territory year-to-date and, in sterling terms, you can add global tech, global & US health care and US consumer discretionary sectors too. 

From each according to their abilities: We’re still in earnings season. Lloyd’s Bank (-7.3%) used their profits to bolster loan provisions, echoing numerous other banks, but the media appeared to pounce more aggressively, likely hurting sentiment. Royal Dutch (-10.4%) then cut their dividend for the first time since WWII. Big hits against big hitters, and others – like BASF, Comcast, Visa & even current-darling Gilead all declined on earnings.  But the running was taken up by strong work-from-home enablers like ServiceNow (+13.0%), Facebook (+5.4%) & Citrix (+3.6%) making their marks while even Apple and Amazon weren’t too bad during the day.

… Still, may appears to be off to a rocky start with the index futures all marking markets down
… part of the issue, Trump posited using tariffs punishing China over Covid-19 came up
--- and add that another 3.84million Americans joined the jobless
Still, it’s Friday and Boris noted the UK is past the peak for Covid-19
… and he’ll have a “comprehensive plan” to get out of lockdown
Meanwhile, Europe will be quiet as markets are closed today for May Day, 
…and the economic calendar is pretty thin with only the US ISM data.

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -10.71 (-0.87%) at 1,216 (YTD: -11.56%; 5YR: 30.6%)
MSCI AC World Equities (USD) down -75.46 (-0.85%) at 8,756 (YTD: -12.25%; 5YR: 30.1%)
Barclays Global Aggregate Bonds up +2.29 (+0.44%) at 520 (YTD: 1.63%; 5YR: 15.3%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -27.08 (-0.92%) at 2,912 (YTD: -9.85%; 5YR: 38.1%)
NASDAQ down -25.16 (-0.28%) at 8,890 (YTD: -0.93%; 5YR: 77.6%)
Euro STOXX 50 down -68.15 (-2.27%) at 2,928 (YTD: -21.82%; 5YR: -19.0%)
FTSE 100 down -214.04 (-3.50%) at 5,901 (YTD: -21.76%; 5YR: -15.5%)
CAC down -98.93 (-2.12%) at 4,572 (YTD: -23.52%; 5YR: -9.4%)
DAX down -246.10 (-2.22%) at 10,862 (YTD: -18.02%; 5YR: -5.2%)
Nikkei 225  down -533.00 (-2.64%) at 19,661 (YTD: -16.89%; 5YR: 0.7%)
Hang Seng up +67.63 (+0.28%) at 24,644 (YTD: -12.58%; 5YR: -12.4%)
MSCI Emerging Markets up +5.28 (+0.57%) at 925 (YTD: -17.02%; 5YR: -11.6%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.19 (began the year at 1.57; 5 years ago it was 0.60)
US 10 Year down -0.03 at 0.61 (began the year at 1.92; 5 years ago it was 2.11)
UK 10 Year down -0.05 at 0.23 (began the year at 0.82; 5 years ago it was 1.84)
Germany 10 Year down -0.09 at -0.59 (began the year at -0.19; 5 years ago it was 0.37)
France 10 Year down -0.07 at -0.11 (began the year at 0.12; 5 years ago it was 0.65)
Italy 10 Year up +0.01 at 1.76 (began the year at 1.41; 5 years ago it was 1.46)
Japan 10 Year up +0.01 at -0.03 (began the year at -0.02; 5 years ago it was 0.36)
Barclays EM Basket down -0.01 at 3.88 (began the year at 4.27; 5 years ago it was 4.99)
 
Selected Currencies
$ weakened -0.0012 versus € (-0.11%) at 1.0949 ($: YTD: 2.49%; 5YR: 2.0%)
€ strengthened +0.0024 versus £ (-0.21%) at 1.1479 (€: YTD: 2.91%; 5YR: 17.8%)
$ strengthened +0.0013 versus £ (+0.10%) at 1.2569 ($: YTD: 5.23%; 5YR: 16.8%)
¥ weakened -0.1400 versus $ (-0.13%) at 107.0700 (¥: YTD: -1.41%; 5YR: 12.3%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.28 (+1.18%) at 23.98 (YTD: -63.90%; 5YR: -63.3%)
WTI Crude ($/bbl) up +3.78 (+25.10%) at 18.84 (YTD: -69.15%; 5YR: -68.4%)
Gold ($/ozt) down -4.25 (-0.25%) at 1683.41 (YTD: 10.54%; 5YR: 43.6%)
Copper ($/mt) down -72.50 (-1.38%) at 5188.50 (YTD: -15.96%; 5YR: -18.1%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros