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26th March 2020

26/03/2020

Market Data and Morning Chat

Morning Chat

So two days isn’t a trend …but it’s a start. Investors seemed pleased with the general direction of travel regarding the US stimulus package though we’re not quite there yet – the House must pass it too.  Bernie Sanders – erstwhile Democratic contender for President – threatened to delay the Senate bill if four Republican senators didn’t drop their opposition to a clause granting an extra $600 a week unemployment insurance (they feared it could prompt US companies to lay off staff). Despite the political grandstanding, US markets pushed up but the gains were tempered as the day wore on by the voting delay.
 
Do you think the Fed’s extra firepower triggered the rise in gun sales? Americans are keen on their guns, and it’s shocking that there’s been a recent massive surge in US gun sales. With all the talk of the extra firepower the Fed can wield maybe some gun buyers got the wrong idea.  First off, it’s the US Federal Reserve, not “the Feds”, but second, it’s financial firepower. The Senate bill also authorises a substantial $4.7trillion increase to the Federal Reserve’s balance sheet, significantly ratcheting up the Fed’s financial market intervention capabilities. Last time that happened equities saw significant gains.
 
But don’t get too carried away just yet: Certainly substantial foundations are being laid to support the global economy with trillions in stimulus pledged to boost the global economy. Yet despite all the concomitant equity gains – markets are starting to look through the current situation – the news won’t be all great just yet. Germany published their March IFO business climate survey, and while current conditions were not too bad, the outlook suffered, with the biggest fall in services sentiment on record.  Meanwhile

Singapore saw their GDP fall by 2.2% on a year-on-year basis; forecasts were calling for a 1.5% decline. 
Equity futures are sliding following the vote, but only marginally, with China trading down only ½%
At least we’ve seen seven trading days of stability in oil prices, while gold holds over $1600
… UK retail sales were only down 0.3% in February – slightly below expected levels
…while the saw February US durable goods orders up 1.2% versus a predicted 0.8% decline
… and the French business confidence score for March of 98 – while down – was better than the 93 forecast 
Now we await the US jobless claims data due at 12:30pm later today with analysts forecasting 1million!

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +27.17 (+2.60%) at 1,072 (YTD: -22.08%; 5YR: 18.1%)
MSCI AC World Equities (USD) up +184.55 (+2.49%) at 7,594 (YTD: -23.90%; 5YR: 16.0%)
Barclays Global Aggregate Bonds up +1.05 (+0.21%) at 499 (YTD: -2.42%; 5YR: 11.0%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +28.23 (+1.15%) at 2,476 (YTD: -23.38%; 5YR: 20.4%)
NASDAQ down -33.56 (-0.45%) at 7,384 (YTD: -17.70%; 5YR: 51.8%)
Euro STOXX 50 up +85.03 (+3.13%) at 2,800 (YTD: -25.23%; 5YR: -23.7%)
FTSE 100 up +242.19 (+4.45%) at 5,688 (YTD: -24.58%; 5YR: -17.5%)
CAC 40 up +189.60 (+4.47%) at 4,432 (YTD: -25.86%; 5YR: -11.5%)
DAX up +173.69 (+1.79%) at 9,874 (YTD: -25.47%; 5YR: -16.6%)
Nikkei 225  down -882.03 (-4.51%) at 18,665 (YTD: -21.10%; 5YR: -4.1%)
Hang Seng down -165.73 (-0.70%) at 23,361 (YTD: -17.13%; 5YR: -4.6%)
MSCI Emerging Markets up +34.88 (+4.35%) at 837 (YTD: -24.95%; 5YR: -13.1%)
 
Selected Government Bond Yields
US 10 Year down -0.06 at 0.81 (began the year at 1.92; 5 years ago it was 1.99)
US 2 Year down -0.01 at 0.32 (began the year at 1.57; 5 years ago it was 0.61)
UK 10 Year down -0.03 at 0.45 (began the year at 0.82; 5 years ago it was 1.58)
Germany 10 Year down -0.05 at -0.31 (began the year at -0.19; 5 years ago it was 0.21)
France 10 Year down -0.06 at 0.15 (began the year at 0.12; 5 years ago it was 0.49)
Italy 10 Year down -0.06 at 1.48 (began the year at 1.41; 5 years ago it was 1.31)
Japan 10 Year down -0.04 at 0.00 (began the year at -0.02; 5 years ago it was 0.32)
Barclays EM Basket down -0.12 at 4.67 (began the year at 4.27; 5 years ago it was 4.99)
 
 Selected Currencies
$ weakened -0.0053 versus € (-0.49%) at 1.0914 ($: YTD: 2.81%; 5YR: -0.4%)
€ weakened -0.0019 versus £ (+0.17%) at 1.0889 (€: YTD: 8.49%; 5YR: 25.3%)
$ weakened -0.0078 versus £ (-0.66%) at 1.1886 ($: YTD: 10.38%; 5YR: 19.8%)
¥ strengthened +0.6200 versus $ (+0.56%) at 110.5400 (¥: YTD: 1.77%; 5YR: 8.0%)
  
Selected Commodities
Brent Crude ($/bbl) down -0.40 (-1.50%) at 26.29 (YTD: -60.42%; 5YR: -53.8%)
WTI Crude ($/bbl) down -1.02 (-5.10%) at 18.99 (YTD: -68.90%; 5YR: -61.0%)
Gold ($/ozt) down -7.82 (-0.48%) at 1604.84 (YTD: 5.39%; 5YR: 33.4%)
Copper ($/mt) up +41.00 (+0.85%) at 4855.00 (YTD: -21.36%; 5YR: -20.7%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros