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30th April 2020

30/04/2020

Market Data and Morning Chat

Morning Chat

That’s like hitting the crossbar! Equities had another pitch-perfect day. The major markets (Swiss & Japanese aside) all joined the game, showing 2-3½% gains with the Nasdaq setting the pace.  More amazingly, intraday, the Nasdaq came within ¼% of flat (you could almost hear the ting) year-to-date as investors appear to be ignoring coronavirus when buying health care and tech sector stocks (Globally, the Morgan Stanley Capital Index Health Care & Information Technology sectors are only down 0.51% and 0.91% year-to-date respectively in total return terms) leaving the health care / tech-heavy Nasdaq at least 8% ahead of other indices.  

So good coaching, better players? There were strong performers on the field yesterday. Alphabet primed the crowd with strong numbers Tuesday driving their shares up 5.8% in two days (9.3% since results).  Facebook surged forward 14.3% with a robust 18% adverting increase – and they warned it was weakening! Moreover, their revenue trends appear now to be stabilising. Microsoft (+4.1%) saw their sales improve as their long-distance play – cloud services – was aided by the global work-from-home push under lockdown.  Finally, Tesla (+9.0%) bagged their first-ever quarterly profit in Q1 with net income beating the analysts who opted to go too low.

Maybe just stronger all round: OK, we’re not there yet, but after yesterday, the S&P could see its best single month gain since Liverpool beat Newcastle 3-0 to win their second FA cup (If the index rallies more than 2.6% today it’ll be the best single month since 1938). Certainly tech sector earnings were a big factor. More, though, the EIA announced an oil inventory build of only 8.99million barrels – less-than-expected – plus oil prices rallied. Jerome Powell announced the Federal Reserve was committed to helping the economy, and the FDA announced they’ll aim to make remdesivir available “as quickly as possible”.
 
… Remdesivir, Gilead’s anti-viral drug showed strong test results in battling Covid-19
… all of which is pushing equity futures up this morning by ½ to 1½%
… and would leave the Nasdaq positive year-to-date if it holds over the day
… Oh, yeah, Liverpool won their second FA cup in May 1974.
French GDP was reported down by 5.8% led by an 11.8% decline in fixed investment
However, Japan’s industrial production only dropped a less-than-expected 3.7% in March
AstraZeneca (+0.2%) shares underwhelmed as great earnings hit the top of estimates
While Glaxo (-0.6%) shares declines despite their broad-based earnings beat
Airbus (+10.4%0 jets higher despite a difficult quarter and heavy bribery case settlement 
Singapore’s DBS Bank (+4.6%) follows the global trend, setting aside half of profits in provisions
Medical insurer Humana (+4.0%) sees healthy earnings and management maintains guidance
Mastercard (+7.8%) charged ahead as they see the worst of the Covid-19 spending cuts pass
Volkswagen (+5.8%) shares revs up as production restart offsets weak Q1 earnings
Yum Brands (+0.3%), despite being burnt on Covid-19, starts to see benefit of April re-openings 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +25.94 (+2.16%) at 1,227 (YTD: -10.78%; 5YR: 32.5%)
MSCI AC World Equities (USD) up +203.33 (+2.36%) at 8,832 (YTD: -11.50%; 5YR: 31.9%)
Barclays Global Aggregate Bonds up +1.12 (+0.22%) at 518 (YTD: 1.18%; 5YR: 14.4%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +76.12 (+2.66%) at 2,940 (YTD: -9.02%; 5YR: 40.9%)
NASDAQ up +306.98 (+3.57%) at 8,915 (YTD: -0.65%; 5YR: 80.4%)
Euro STOXX 50 up +64.02 (+2.18%) at 2,996 (YTD: -20.00%; 5YR: -17.1%)
FTSE 100 up +156.75 (+2.63%) at 6,115 (YTD: -18.92%; 5YR: -12.1%)
CAC up +101.32 (+2.22%) at 4,671 (YTD: -21.86%; 5YR: -7.4%)
DAX up +312.11 (+2.89%) at 11,108 (YTD: -16.16%; 5YR: -3.0%)
Nikkei 225  up +514.88 (+2.60%) at 20,286 (YTD: -14.25%; 5YR: 1.1%)
Hang Seng up +67.63 (+0.28%) at 24,644 (YTD: -12.58%; 5YR: -12.4%)
MSCI Emerging Markets up +16.96 (+1.88%) at 920 (YTD: -17.49%; 5YR: -12.2%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.19 (began the year at 1.57; 5 years ago it was 0.57)
US 10 Year down -0.02 at 0.61 (began the year at 1.92; 5 years ago it was 2.03)
UK 10 Year down 0.00 at 0.29 (began the year at 0.82; 5 years ago it was 1.83)
Germany 10 Year up +0.00 at -0.50 (began the year at -0.19; 5 years ago it was 0.36)
France 10 Year up +0.00 at -0.04 (began the year at 0.12; 5 years ago it was 0.64)
Italy 10 Year up +0.00 at 1.75 (began the year at 1.41; 5 years ago it was 1.50)
Japan 10 Year up +0.00 at -0.05 (began the year at -0.02; 5 years ago it was 0.34)
Barclays EM Basket down -0.01 at 3.89 (began the year at 4.27; 5 years ago it was 5.00)
 
Selected Currencies
$ weakened -0.0018 versus € (-0.17%) at 1.0866 ($: YTD: 3.23%; 5YR: 3.1%)
€ weakened -0.0021 versus £ (+0.18%) at 1.1484 (€: YTD: 2.86%; 5YR: 19.1%)
$ weakened -0.0043 versus £ (-0.35%) at 1.2478 ($: YTD: 5.92%; 5YR: 18.6%)
¥ strengthened +0.2200 versus $ (+0.21%) at 106.4600 (¥: YTD: -1.99%; 5YR: 12.4%)
 
Selected Commodities
Brent Crude ($/bbl) up +1.95 (+9.44%) at 22.61 (YTD: -65.96%; 5YR: -65.1%)
WTI Crude ($/bbl) up +2.72 (+22.04%) at 15.06 (YTD: -75.34%; 5YR: -74.3%)
Gold ($/ozt) up +14.19 (+0.83%) at 1714.56 (YTD: 12.59%; 5YR: 45.1%)
Copper ($/mt) up +38.00 (+0.73%) at 5261.00 (YTD: -14.79%; 5YR: -14.4%)
 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros