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24th March 2020

24/03/2020

Market Data and Morning Chat

Morning Chat

Maybe third times a charm: The US Senate failed again to pass their near-$2trillion stimulus plan.  US President Trump was pushing senators to “make a deal” and pass the stimulus package to quickly “save American workers”. Again, it was a procedural vote – this time over H.R.748, an amendment to the Internal Revenue Code repealing the Obamacare or Affordable Care Act’s tax on high-cost employer health plans. You can see why Democrats are fighting the procedural, but also wonder why Republicans are even bothered right now. Equities fell on the battle, but Steve Mnuchin’s efforts for a third vote lifted spirits.  
 
Is it irony, or just a wrinkle to the lockdown: Across the globe we’re seeing varying degrees of lockdown.  Last night, Prime Minister Boris Johnson announced the toughest UK restrictions yet though still not as strident as on the continent – at least not yet. Meanwhile, London has seen the first gasoline priced below $1 a gallon at the pumps – London, Kentucky that is.  Over in North America, various US states and Canadian Provinces have also ushered in significant constraints on travel and social interaction. Concomitantly, US gasoline has fallen to an all-time low with a ¢15 a gallon wholesale price.
  
If it’s not part of the problem maybe it’s part of the solution: It will be tough to cope through the UK lockdown, but there are signs that the lockdown – and intensive infection testing –  may finally be having an impact in Italy.  For a second day both the number of fatalities and new cases have fallen. As a result, the Italian stock market declined less than any of the other major European markets. Meanwhile, the Italian 10-year bond yield which had leapt to 3% after running at 1% for ages has slipped back by nearly half to just over 1.5%.
 
Congress may not have acted, but the Fed has spoken leading Japan equities to jump 7.1%
… while the futures markets are showing green – the US up over 4%, oil up and the dollar down
… the Fed announced they would buy corporate debt for the first time since 2008
Japan’s manufacturing PMI was better than expected at 44.8 for March (versus 43.7 forecast), 
… but the services PMI was battered to 32.7 – well below the 41.8 expected
Europe’s PMI’s come out from 8:15 this morning

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -31.14 (-3.12%) at 966 (YTD: -29.75%; 5YR: 4.8%)
MSCI AC World Equities (USD) down -207.32 (-2.95%) at 6,811 (YTD: -31.74%; 5YR: 2.1%)
Barclays Global Aggregate Bonds up +3.00 (+0.61%) at 495 (YTD: -3.31%; 5YR: 9.8%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -67.52 (-2.93%) at 2,237 (YTD: -30.75%; 5YR: 7.0%)
NASDAQ down -18.85 (-0.27%) at 6,861 (YTD: -23.54%; 5YR: 37.4%)
Euro STOXX 50 down -62.96 (-2.47%) at 2,486 (YTD: -33.63%; 5YR: -33.4%)
FTSE 100 down -196.89 (-3.79%) at 4,994 (YTD: -33.79%; 5YR: -28.9%)
CAC down -134.49 (-3.32%) at 3,914 (YTD: -34.52%; 5YR: -23.1%)
DAX down -187.80 (-2.10%) at 8,741 (YTD: -34.02%; 5YR: -27.2%)
Nikkei 225 up +334.95 (+2.02%) at 16,888 (YTD: -28.61%; 5YR: -14.3%)
Hang Seng down -1108.94 (-4.86%) at 21,696 (YTD: -23.04%; 5YR: -11.1%)
MSCI Emerging Markets down -45.03 (-5.61%) at 758 (YTD: -31.98%; 5YR: -22.3%)
 
Selected Government Bond Yields
US 2 Year down 0.00 at 0.31 (began the year at 1.57; 5 years ago it was 0.57)
US 10 Year down -0.06 at 0.79 (began the year at 1.92; 5 years ago it was 1.91)
UK 10 Year down -0.14 at 0.43 (began the year at 0.82; 5 years ago it was 1.51)
Germany 10 Year down -0.05 at -0.38 (began the year at -0.19; 5 years ago it was 0.22)
France 10 Year down 0.00 at 0.10 (began the year at 0.12; 5 years ago it was 0.49)
Italy 10 Year down -0.05 at 1.58 (began the year at 1.41; 5 years ago it was 1.29)
Japan 10 Year unchanged at 0.06 (began the year at -0.02; 5 years ago it was 0.30)
Barclays EM Basket down -0.05 at 4.83 (began the year at 4.27; 5 years ago it was 5.01)
 
Selected Currencies
$ strengthened +0.0004 versus € (+0.04%) at 1.0747 ($: YTD: 4.29%; 5YR: 1.6%)
€ weakened -0.0009 versus £ (+0.08%) at 1.0758 (€: YTD: 9.81%; 5YR: 26.5%)
$ weakened -0.0004 versus £ (-0.03%) at 1.1561 ($: YTD: 12.83%; 5YR: 22.2%)
¥ strengthened +0.2300 versus $ (+0.21%) at 111.0000 (¥: YTD: 2.18%; 5YR: 7.8%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.68 (+2.64%) at 26.40 (YTD: -60.25%; 5YR: -50.9%)
WTI Crude ($/bbl) down -2.07 (-9.23%) at 20.36 (YTD: -66.66%; 5YR: -56.5%)
Gold ($/ozt) up +5.69 (+0.36%) at 1565.39 (YTD: 2.79%; 5YR: 31.1%)
Copper ($/mt) down -15.00 (-0.31%) at 4810.00 (YTD: -22.09%; 5YR: -20.4%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros