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20th April 2020

20/04/2020

Market Data and Morning Chat

Morning Chat

Oh, to be in England now that April’s there: You may have read about the number of private jets winging their way to the UK and bypassing travel restrictions. Maybe they came for the weather – which has been improving. Equity-wise though, the UK was not as upbeat last week as other markets, though it did have one of the strongest bounces from the mid-week low.  The US was the place to be, with equity gains driven by a surge in Consumer Discretionary (+7.8%) and Health Care (+6.2%) names led by gains in Amazon (+16.3%) and Covid-19 treatment hopeful Gilead (14.3%)

Our aspirations are our possibilities: Last week the possibilities of a coronavirus treatment and easing of lockdown restrictions (which were seen in some places) drove market sentiment. The virus outlook will remain the focus this week too, but in addition to medical data, we will also see Markit’s flash purchasing manager forward-looking sentiment survey data released.  The key will be if purchasing managers anticipations are as pessimistic as analysts have forecast them to be or not. Fingers crossed. Furthermore, we’ll see US durable goods orders for March and February UK unemployment data (less useful) adding further detail to economic conditions. 

Just when I seemed about to learn! Where is the thread now? Oh, and it’s still earnings season. We had the major banks last week mainly seeing profits down on large provision set-asides. This week is the turn of the more consumer-focussed names. Companies like Amazon, Netflix, Facebook and internet-backbone Akamai may get a boost from lockdown spending and internet traffic. PayPal, Visa and American Express will reveal spending pattern news.  Starbucks – which closed 80% of its China stores and is now back to 95% open – will give an indication on China getting back to work. Threads everywhere to untangle!

The second week of Eastertide starts with equity futures up in Europe, effectively flat in US
West Texas oil drills deeper as prices fall to a 21-year low of ¢3 a coke can! ($15/barrel)
Not just the Easter Bunny will be free to move in New Zealand as lockdown restrictions to ease
… while Australia turns the tide and re-opens three Sydney beaches for “mental health” reasons
… China re-opens a range of major tourist sites – including the Great Wall (to keep others out?)
… Germany allows small shops, book & bike stores & car dealerships to open their doors
… and the US sees protests to lift lockdown controls for liberty & pursuit of happiness at least 
Procter & Gamble (+2.6%) cleans up on earnings as shut in shoppers buy household essentials 
Kansas City Southern railroad (+2.5%) powers 27% earning growth on lower fuel costs

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +29.02 (+2.49%) at 1,197 (YTD: -12.99%; 5YR: 28.3%)
MSCI AC World Equities (USD) up +226.94 (+2.71%) at 8,599 (YTD: -13.83%; 5YR: 28.5%)
Barclays Global Aggregate Bonds up +0.31 (+0.06%) at 515 (YTD: 0.71%; 5YR: 14.4%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +75.01 (+2.68%) at 2,875 (YTD: -11.03%; 5YR: 36.9%)
NASDAQ up +117.78 (+1.38%) at 8,650 (YTD: -3.59%; 5YR: 73.2%)
Euro STOXX 50 up +75.95 (+2.70%) at 2,888 (YTD: -22.88%; 5YR: -22.3%)
FTSE 100 up +158.53 (+2.82%) at 5,787 (YTD: -23.27%; 5YR: -17.9%)
CAC up +148.85 (+3.42%) at 4,499 (YTD: -24.74%; 5YR: -13.3%)
DAX up +324.24 (+3.15%) at 10,626 (YTD: -19.80%; 5YR: -10.6%)
Nikkei 225  down -209.57 (-1.05%) at 19,688 (YTD: -16.78%; 5YR: 0.3%)
Hang Seng down -53.48 (-0.22%) at 24,327 (YTD: -13.70%; 5YR: -10.2%)
MSCI Emerging Markets up +16.45 (+1.86%) at 901 (YTD: -19.14%; 5YR: -12.8%)
 
Selected Government Bond Yields
US 2 Year down 0.00 at 0.20 (began the year at 1.57; 5 years ago it was 0.52)
US 10 Year down -0.01 at 0.63 (began the year at 1.92; 5 years ago it was 1.89)
UK 10 Year up +0.00 at 0.30 (began the year at 0.82; 5 years ago it was 1.57)
Germany 10 Year down 0.00 at -0.48 (began the year at -0.19; 5 years ago it was 0.07)
France 10 Year up +0.00 at 0.03 (began the year at 0.12; 5 years ago it was 0.36)
Italy 10 Year down 0.00 at 1.79 (began the year at 1.41; 5 years ago it was 1.48)
Japan 10 Year down 0.00 at 0.02 (began the year at -0.02; 5 years ago it was 0.31)
Barclays EM Basket down -0.04 at 4.06 (began the year at 4.27; 5 years ago it was 4.94)
 
Selected Currencies
$ strengthened +0.0003 versus € (+0.03%) at 1.0864 ($: YTD: 3.25%; 5YR: -1.1%)
€ strengthened +0.0020 versus £ (-0.17%) at 1.1481 (€: YTD: 2.89%; 5YR: 20.8%)
$ strengthened +0.0025 versus £ (+0.20%) at 1.2473 ($: YTD: 5.96%; 5YR: 16.3%)
¥ weakened -0.2300 versus $ (-0.21%) at 107.8300 (¥: YTD: -0.70%; 5YR: 10.7%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.87 (-3.62%) at 23.14 (YTD: -65.16%; 5YR: -62.2%)
WTI Crude ($/bbl) down -1.60 (-8.05%) at 18.27 (YTD: -70.08%; 5YR: -67.2%)
Gold ($/ozt) down -4.73 (-0.28%) at 1682.36 (YTD: 10.48%; 5YR: 40.8%)
Copper ($/mt) up +71.00 (+1.38%) at 5211.00 (YTD: -15.60%; 5YR: -14.0%)
 

 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros