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23rd March 2020

23/03/2020

Market Data and Morning Chat

Morning Chat

Oil drops and market whine: It was a long week last week. Investments swung wildly making it hard to see how everything moved. Oil prices had their worst week in nearly thirty years slipping to the low-to-mid-$20 a barrel thanks to Russia and Saudi’s production dust-up.  Neither side has blinked, willing it seems to take the pain. Thus, energy stocks helped lead markets down. Despite Covid-19 worries maybe not as much as thought. The various international stimulus packages helped keep last week’s equity declines to 1½ to 3¼% in Europe and 3½% in the US. Not great, but possibly less than expected.

What we have here is a failure to negotiate: Equity futures are weak because the US Senate appears to be stumbling at a late hurdle. Last week, Senate Republicans proposed a near-$1trillion covid-19 relief plan including cash payments of $1,200 to individuals earning less than $75.000 and “rapid relief” for small businesses. Democrats have stymied the bill at a procedural vote because too much went to companies and not enough to workers. Yes, the bill added some Democrat wishes – like a stock buyback ban for borrowing firms akin to the TARP plan for banks – but not enough, triggering the slide.

… Flash by name, flash by nature: The front pages of global newspapers will remain dominated this week by the Covid-19 numbers and the effects of the increased use of self-isolation and quarantine. Any coronavirus news is likely to damage sentiment unless its shows some early efficacy in curbing the virus spread.  Meanwhile though, we will also see the Markit flash March PMI data for a host of countries, including the US, UK, Eurozone (including France & Germany) and Japan.  It may give some indication as to the scale of business concern and an early read on the stimulus packages.

The US Senate disagreement has led market futures point lower – but not limit down

…Meanwhile, Germany is looking to borrow as much as £320billion to fight Covid-19

Euro-area consumer confidence comes out 8:30am today, the PMIs tomorrow 

UK faces greater lock-down if two metre social distancing is not observed

Carnival (+20.2%), EasyJet (+18.3%) & Intercontinental Hotels (+15.5%) led Friday’s UK gains

… while Carnival, MGM (+18.3%), United Airlines (+15.1%) and Marriott (11.7%) led US

Market Data
 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -102.62 (-9.19%) at 1,014 (YTD: -26.24%; 5YR: 11.3%
MSCI AC World Equities (USD) down -759.77 (-9.50%) at 7,236 (YTD: -27.49%; 5YR: 11.1%)
Barclays Global Aggregate Bonds up +1.24 (+0.24%) at 515 (YTD: 0.72%; 5YR: 16.5%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -324.89 (-11.98%) at 2,386 (YTD: -26.14%; 5YR: 15.0%)
NASDAQ down -970.28 (-12.32%) at 6,905 (YTD: -23.05%; 5YR: 39.8%)
Euro STOXX 50 down -135.65 (-5.25%) at 2,450 (YTD: -34.57%; 5YR: -33.3%)
FTSE 100 down -215.03 (-4.01%) at 5,151 (YTD: -31.71%; 5YR: -24.7%)
CAC down -236.90 (-5.75%) at 3,881 (YTD: -35.07%; 5YR: -22.8%)
DAX down -489.83 (-5.31%) at 8,742 (YTD: -34.02%; 5YR: -27.0%)
Nikkei 225  up +9.49 (+0.06%) at 17,012 (YTD: -28.09%; 5YR: -12.5%)
Hang Seng up +221.26 (+0.96%) at 23,285 (YTD: -17.40%; 5YR: -2.6%)
MSCI Emerging Markets down -58.01 (-6.51%) at 833 (YTD: -25.25%; 5YR: -12.2%)
 
Selected Government Bond Yields
US 2 Year up +0.03 at 0.39 (began the year at 1.57; 5 years ago it was 0.67)
US 10 Year up +0.09 at 0.81 (began the year at 1.92; 5 years ago it was 2.05)
UK 10 Year up +0.03 at 0.44 (began the year at 0.82; 5 years ago it was 1.68)
Germany 10 Year up +0.04 at -0.42 (began the year at -0.19; 5 years ago it was 0.28)
France 10 Year up +0.06 at 0.22 (began the year at 0.12; 5 years ago it was 0.53)
Italy 10 Year down -0.10 at 2.06 (began the year at 1.41; 5 years ago it was 1.27)
Japan 10 Year down 0.00 at 0.01 (began the year at -0.02; 5 years ago it was 0.42)
Barclays EM Basket up +0.21 at 4.58 (began the year at 4.27; 5 years ago it was 5.15)
 
Selected Currencies
$ strengthened +0.0023 versus € (+0.21%) at 1.1136 ($: YTD: 0.83%; 5YR: -5.1%)
€ weakened -0.0011 versus £ (+0.10%) at 1.0970 (€: YTD: 7.68%; 5YR: 26.9%)
$ strengthened +0.0020 versus £ (+0.16%) at 1.2215 ($: YTD: 7.90%; 5YR: 17.2%)
¥ weakened -0.8800 versus $ (-0.82%) at 106.8400 (¥: YTD: -1.63%; 5YR: 13.6%)
 
Selected Commodities
Brent Crude ($/bbl) up +1.46 (+5.23%) at 29.39 (YTD: -55.75%; 5YR: -42.7%)
WTI Crude ($/bbl) down -3.03 (-9.55%) at 28.70 (YTD: -53.00%; 5YR: -34.6%)
Gold ($/ozt) down -4.57 (-0.31%) at 1487.80 (YTD: -2.30%; 5YR: 29.5%)
Copper ($/mt) down -169.50 (-3.10%) at 5290.50 (YTD: -14.31%; 5YR: -9.5%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros