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24th April 2020

24/04/2020

Market Data and Morning Chat

Morning Chat

Big difference, little difference: There a few headline numbers thrown around yesterday.  Markets kicked off with Markit’s – PMI’s that is, Purchasing Manager Indices. We know purchasing managers are gloomy, many businesses are furloughed or shuttered, so estimates were set to a low bar. The PMI’s still managed to limbo under (limbo probably an apt term given Eastertide lockdown) with the differences so noticeable one wonders if some estimates were set by dartboard. Then US continuing jobless claims came out – 16million – not so far from expectations and better-than-hoped.  On balance, equities reacted fairly calmly. Indeed, the US fell only 0.05% by the close!

A lightbulb in a world of moths: The EU leaders met again by videoconference – given their speed of reaction compared to other governments, they probably weren’t using Zoom. Christine Lagarde, President of the European Central Bank, challenged EU leaders by shining a light on the concern European GDP could shrink as much as 15% if too little was done too late. Attracting some support, Angela Merkel backed offering significant stimulus, but in the end EU leaders could only agree to €540billion in support – a quarter what hoped for. Still, much better than nothing though, leading European markets to modest gains.

Hope springs… a small leak: When taking yesterday’s news as a whole – wildly varied PMIs, decent US continuing jobless claims, at least some EU stimulus, oh, and a 20% oil price rally on continued tensions over Iranian gunboats – markets looked upbeat. By the European close, the US was up 1½%. At 5:44pm our time it was still up 1½%, but by 5:46pm it was flat on the day. The problem was the WHO erroneously published a report stating Chinese trials of Gilead’s Remdesivir didn’t improve patients conditions.  Although quickly taken down, the story was out there hence the rapid reaction.  

Given the Gilead news, European futures are down this morning with the US slightly off
Oil prices appear to be stabilising back near $20 after drilling below zero earlier this week
The US House of Representatives pass the Senate bill adding another £400billion in stimulus
… meanwhile US Covid-19 cases are up at the slowest pace in a month
… and Italy saw daily recoveries overtake new cases for the first time easing pressures
Dassault Systems (-0.7%) sees sales trimmed by Covid-19 but reconfirms dividend 
Union Pacific (+3.5%) earnings & cost-cutting on track and they also maintained dividend
Intel (-6.9%) hurt as 2021 chip sales likely to be fried as Apple switches to their own processors
… which will be manufactured by Taiwan Semiconductor (-1.2%) 
Despite strong sales, Domino’s Pizza (-4.7%) burned as longer-term guidance withdrawn

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +2.63 (+0.22%) at 1,175 (YTD: -14.59%; 5YR: 24.7%)
MSCI AC World Equities (USD) up +26.86 (+0.32%) at 8,417 (YTD: -15.65%; 5YR: 24.3%)
Barclays Global Aggregate Bonds up +1.53 (+0.30%) at 515 (YTD: 0.60%; 5YR: 13.9%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -1.51 (-0.05%) at 2,798 (YTD: -13.40%; 5YR: 32.1%)
NASDAQ down -0.63 (-0.01%) at 8,495 (YTD: -5.33%; 5YR: 66.8%)
Euro STOXX 50 up +17.56 (+0.62%) at 2,852 (YTD: -23.84%; 5YR: -23.2%)
FTSE 100 up +55.98 (+0.97%) at 5,827 (YTD: -22.75%; 5YR: -17.6%)
CAC up +39.20 (+0.89%) at 4,451 (YTD: -25.54%; 5YR: -14.4%)
DAX up +98.76 (+0.95%) at 10,514 (YTD: -20.64%; 5YR: -11.0%)
Nikkei 225  down -214.76 (-1.11%) at 19,215 (YTD: -18.78%; 5YR: -4.0%)
Hang Seng down -121.24 (-0.51%) at 23,856 (YTD: -15.37%; 5YR: -15.0%)
MSCI Emerging Markets up +3.18 (+0.36%) at 892 (YTD: -19.99%; 5YR: -15.9%)
 
Selected Government Bond Yields
US 2 Year up +0.00 at 0.22 (began the year at 1.57; 5 years ago it was 0.50)
US 10 Year down -0.01 at 0.59 (began the year at 1.92; 5 years ago it was 1.91)
UK 10 Year down -0.04 at 0.29 (began the year at 0.82; 5 years ago it was 1.65)
Germany 10 Year up +0.00 at -0.43 (began the year at -0.19; 5 years ago it was 0.15)
France 10 Year down 0.00 at 0.08 (began the year at 0.12; 5 years ago it was 0.42)
Italy 10 Year down 0.00 at 1.98 (began the year at 1.41; 5 years ago it was 1.44)
Japan 10 Year down -0.02 at -0.02 (began the year at -0.02; 5 years ago it was 0.29)
Barclays EM Basket down -0.02 at 3.88 (began the year at 4.27; 5 years ago it was 5.02)
 
Selected Currencies
$ strengthened +0.0048 versus € (+0.44%) at 1.0766 ($: YTD: 4.12%; 5YR: 0.8%)
€ weakened -0.0030 versus £ (+0.26%) at 1.1462 (€: YTD: 3.06%; 5YR: 21.9%)
$ strengthened +0.0020 versus £ (+0.16%) at 1.2341 ($: YTD: 6.95%; 5YR: 18.6%)
¥ weakened -0.1400 versus $ (-0.13%) at 107.6600 (¥: YTD: -0.85%; 5YR: 10.6%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.55 (+2.74%) at 20.63 (YTD: -68.94%; 5YR: -67.6%)
WTI Crude ($/bbl) up +3.47 (+28.26%) at 15.75 (YTD: -74.21%; 5YR: -72.2%)
Gold ($/ozt) down -1.84 (-0.11%) at 1724.32 (YTD: 13.23%; 5YR: 46.6%)
Copper ($/mt) up +29.00 (+0.57%) at 5160.50 (YTD: -16.42%; 5YR: -13.1%)

 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros