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24th February 2020

24/02/2020

Market Data and Morning Chat

Morning Chat

Gone viral: Investors focused on UK stocks might not be so concerned about last week as equities were only slightly down over five days. Other European markets fell ½ to 1¼% and the US a bit worse down about 1½%. Many media comments blame the Covid-19 outbreak.  Yet consider, before Friday’s declines many markets were positive for the week, and China closed up 4¼%. Focus instead on manufacturing data and you find better-than-expected numbers in the UK and slower-than-expected PMI data in the US. Add a very weak US Services PMI and you have stronger suspects for the market declines.

The morale of the story: So, if PMI data was influential, what could move the needle this week. Well, with the pace of new Covid-19 cases slowing, it’s likely to be economic data points. The weak US PMI numbers puts the focus on the second Q4 GDP estimate, the durable goods orders (expected to decline) and sentiment data such as the Chicago PMI. Here in the UK we get Gfk consumer confidence and various house price releases while France & Italy will see early industrial and consumer sentiment data. Like Friday, market optimism likely depends on economic resilience not Covid-19.

Nevada same again: Fury v Wilder wasn’t the only fight seen in the aptly named “Battle Born” state over the weekend. The state also hosted the Democrat caucuses and Bernie Saunders appears to have had a terrific result.  60% of precincts have reported and Saunders has collected a third of the first vote – as much as Biden and Buttigeig put together – with Warren and Klobuchar only squeaking into double figures. Run the numbers through to delegates won and Bernie on pace to pick up nearly half the total available. Maybe not a knock-out but he’s definitely the clear front-runner now.

Futures have opted for a pessimistic tone carrying on from Friday with declines of 1½ to 2¼%
Best Buy (-1.8%) put up solid Q4 earnings but the Covid-19 shelf was stacked against them
Berkshire Hathaway (+0.5%) profits rallied on last year’s strong equity market gains
Royal Bank of Canada’s (+1.1%) 82% rise in investment banking fees proved telling

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -12.04 (-0.85%) at 1,412 (YTD: 2.69%; 5YR: 54.4%)
MSCI AC World Equities (USD) down -73.47 (-0.72%) at 10,190 (YTD: 2.12%; 5YR: 53.4%)
Barclays Global Aggregate Bonds up +1.92 (+0.37%) at 515 (YTD: 0.56%; 5YR: 13.6%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -35.48 (-1.05%) at 3,338 (YTD: 3.31%; 5YR: 57.8%)    
NASDAQ down -174.38 (-1.79%) at 9,577 (YTD: 6.73%; 5YR: 92.8%)    
Euro STOXX 50 down -22.60 (-0.59%) at 3,800 (YTD: 1.47%; 5YR: 7.1%)    
FTSE 100 down -32.72 (-0.44%) at 7,404 (YTD: -1.84%; 5YR: 6.5%)    
CAC down -32.58 (-0.54%) at 6,030 (YTD: 0.86%; 5YR: 23.4%)    
DAX down -84.67 (-0.62%) at 13,579 (YTD: 2.49%; 5YR: 21.2%)    
Nikkei 225  down -92.41 (-0.39%) at 23,387 (YTD: -1.14%; 5YR: 25.7%)    
Hang Seng down -467.17 (-1.71%) at 26,842 (YTD: -4.78%; 5YR: 8.5%)    
MSCI Emerging Markets down -11.10 (-1.01%) at 1,084 (YTD: -2.73%; 5YR: 9.8%)    
    
Selected Government Bond Yields    
US 2 Year down -0.05 at 1.30 (began the year at 1.57; 5 years ago it was 0.55)    
US 10 Year down -0.05 at 1.42 (began the year at 1.92; 5 years ago it was 1.98)    
UK 10 Year down 0.00 at 0.57 (began the year at 0.82; 5 years ago it was 1.76)    
Germany 10 Year down -0.03 at -0.46 (began the year at -0.19; 5 years ago it was 0.37)
France 10 Year down -0.02 at -0.23 (began the year at 0.12; 5 years ago it was 0.65)    
Italy 10 Year up +0.07 at 0.98 (began the year at 1.41; 5 years ago it was 1.46)    
Japan 10 Year down -0.02 at -0.06 (began the year at -0.02; 5 years ago it was 0.37)    
Barclays EM Basket down -0.02 at 3.91 (began the year at 4.27; 5 years ago it was 5.10)
    
Selected Currencies    
$ strengthened +0.0043 versus € (+0.40%) at 1.0815 ($: YTD: 3.69%; 5YR: 4.6%)    
€ weakened -0.0025 versus £ (+0.21%) at 1.1974 (€: YTD: -1.34%; 5YR: 13.9%)    
$ strengthened +0.0025 versus £ (+0.19%) at 1.2949 ($: YTD: 2.37%; 5YR: 16.2%)    
¥ strengthened +0.0800 versus $ (+0.07%) at 111.5800 (¥: YTD: 2.69%; 5YR: 6.6%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -1.38 (-2.39%) at 56.48 (YTD: -14.97%; 5YR: -3.1%)    
WTI Crude ($/bbl) down -0.48 (-0.89%) at 53.30 (YTD: -12.71%; 5YR: 5.9%)    
Gold ($/ozt) up +24.77 (+1.51%) at 1668.82 (YTD: 9.59%; 5YR: 39.5%)    
Copper ($/mt) up +37.00 (+0.65%) at 5765.00 (YTD: -6.62%; 5YR: 1.3%)    
    
Data sourced from Bloomberg as of the close of last trading day.    
YTD = Year-to-date return; 5YR = five year return    

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros