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26th January 2020

26/02/2020

Market Data & Morning Chat

Morning Chat

Goodbye Ruby Tuesday: While the Italians tried to work out where the coronavirus came from and where it’s going, Anne Schuchat, principal deputy director of the US Center for Disease Control and Prevention warned there was a possibility Covid-19 might prove difficult to chain up – and it didn’t help that Iran’s deputy Health Minister tested positive. Result? Those emerald green market futures turned ruby red yesterday, with equities continuing to slide between 1¼% (Italy interestingly) to 3¼%. Again, the airline stocks were shot down, with American Airlines down 9.2%, Southwest down 8.2% and EasyJet 3.5% while Carnival Cruises sank 5.9%.

You can’t always get what you want: But sometimes you get what you need, and the Confederation of British Industry’s Distributive Trends Survey – their retail sales review – gave some upbeat news. While sales were disappointingly flat and poor for this time of year, there was a “noticeable improvement” in investment plans with the largest swing in the survey’s history (since 1983). The views did vary by sector, with large firms, grocers, clothiers and non-store retailing being the most upbeat. Motor traders – who have been hard hit by the diesel collapse – also saw a strong growth in sales. Every little helps.

Looks like the wild horses won: Two CEO’s stood down under cover of the Covid-19 news flow. Disney’s 69-year old Bob Iger announced he is ducking out with immediate effect and that Bob Chapek is stepping into the role. Over a 15-year tenure, Iger directed a successful reformation of Disney culminating in the purchase of Marvel, Lucasfilm, Fox, the launch of Disney+, and a 438% return – guess the 2.5% sell-off after his announcement isn’t so bad. Meanwhile Salesforce’s shares also declined, falling 1.8%, as Co-CEO Keith Block announced he’s stepped down and leaving Marc Benioff as sole CEO and Chairman.

Futures continue to point down for Europe, but the US is showing a minor recovery
Meggitt (-5.2%) noted Covid-19 is not affecting their supply chain and revenues above estimates
Rio Tinto (-1.3%) digs into their fattened wallet to increase their dividend as revenues up 7%  
Scotiabank (-0.9%) & Bank of Montreal (-2.2%) post profit Q1 gains on improved capital markets
American Tower (0.4%) signals solid Q4 revenues and net profit gains with churn falling
Bernie-bashing affirmed Saunders’ frontrunner status in last night’s Democratic debate

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -32.71 (-2.39%) at 1,338 (YTD: -2.71%; 5YR: 46.1%)
MSCI AC World Equities (USD) down -259.96 (-2.63%) at 9,626 (YTD: -3.54%; 5YR: 44.9%)
Barclays Global Aggregate Bonds up +1.41 (+0.27%) at 518 (YTD: 1.16%; 5YR: 14.5%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -97.68 (-3.03%) at 3,128 (YTD: -3.17%; 5YR: 48.2%)    
NASDAQ down -255.67 (-2.77%) at 8,966 (YTD: -0.08%; 5YR: 79.7%)    
Euro STOXX 50 down -75.47 (-2.07%) at 3,573 (YTD: -4.61%; 5YR: -0.1%)    
FTSE 100 down -138.95 (-1.94%) at 7,018 (YTD: -6.95%; 5YR: 1.0%)    
CAC down -112.19 (-1.94%) at 5,680 (YTD: -4.99%; 5YR: 15.7%)    
DAX down -244.75 (-1.88%) at 12,790 (YTD: -3.46%; 5YR: 12.9%)    
Nikkei 225  down -179.22 (-0.79%) at 22,426 (YTD: -5.20%; 5YR: 19.4%)    
Hang Seng down -235.43 (-0.88%) at 26,658 (YTD: -5.43%; 5YR: 7.1%)    
MSCI Emerging Markets up +1.22 (+0.12%) at 1,057 (YTD: -5.21%; 5YR: 6.3%)    
    
Selected Government Bond Yields    
US 2 Year down -0.04 at 1.18 (began the year at 1.57; 5 years ago it was 0.65)    
US 10 Year down -0.01 at 1.34 (began the year at 1.92; 5 years ago it was 2.03)    
UK 10 Year down -0.02 at 0.52 (began the year at 0.82; 5 years ago it was 1.73)    
Germany 10 Year down -0.01 at -0.52 (began the year at -0.19; 5 years ago it was 0.30)
France 10 Year up +0.00 at -0.25 (began the year at 0.12; 5 years ago it was 0.58)    
Italy 10 Year up +0.01 at 1.00 (began the year at 1.41; 5 years ago it was 1.34)    
Japan 10 Year up +0.01 at -0.10 (began the year at -0.02; 5 years ago it was 0.34)    
Barclays EM Basket up +0.00 at 3.89 (began the year at 4.27; 5 years ago it was 5.07)
    
Selected Currencies    
$ strengthened +0.0013 versus € (+0.12%) at 1.0870 ($: YTD: 3.20%; 5YR: 2.9%)    
€ strengthened +0.0013 versus £ (-0.11%) at 1.1943 (€: YTD: -1.09%; 5YR: 15.3%)    
$ strengthened +0.0030 versus £ (+0.23%) at 1.2982 ($: YTD: 2.12%; 5YR: 15.7%)    
¥ weakened -0.3400 versus $ (-0.31%) at 110.3700 (¥: YTD: 1.62%; 5YR: 8.2%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.33 (-0.61%) at 54.01 (YTD: -18.68%; 5YR: -9.5%)    
WTI Crude ($/bbl) down -1.57 (-3.06%) at 49.76 (YTD: -18.51%; 5YR: -1.3%)    
Gold ($/ozt) down -2.88 (-0.17%) at 1645.96 (YTD: 8.09%; 5YR: 36.0%)    
Copper ($/mt) down -4.00 (-0.07%) at 5685.00 (YTD: -7.92%; 5YR: -1.6%)    
    
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