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30th March 2020

30/03/2020

Market Data and Morning Chat

It’s not that easy being green: … but markets put up a valiant effort last week.  In fact, they were close to establishing a new bull market (a 20% rise from the lowest close) thanks to the myriad of stimulus programs tallying £4trillion. However, because markets rallied strongly off the previous Friday’s low,  US equities just missed, managing only an intra-day 20% bull gain before equities hesitated. We closed with a broadly red Friday, down 3-4% in the main, cutting the weekly gain to 6-8% for the principal European exchanges, call it 11-12% for the US & 15% for Japan. 


Movin' right along in search of good times and good news: Congress took their time joining the stimulus party, but US President Donald Trump has signed into effect their $2trillion program.  Moreover, global central bankers have supportively pledged to do whatever it takes also helps. The only major component missing is a co-ordinated EU plan – though European finance ministers have been meeting by video-conference, so maybe. This week then will likely be driven by new case numbers, but maybe also by the US non-farm payrolls and final PMI data as they help give some handle on the global sequestering effects
 

Is there more I could have said? What we’ve seen so far from global governments is the quick responses, the shotgun initiatives.  However, there’s possibly more in the pipelines. Japan’s Shinzo Abe announced his plans for an additional budget statement next week to augment the economic stimulus program. China’s Politburo looks to be authorising an expansion of their fiscal deficit. Australia is expected to announce more targeted plans for workers. Meanwhile, US Treasury Secretary Steve Mnuchin is aiming to roll out a small business loan program. Oh, and the US Fed’s quantitative easing program is to be “unlimited in size”.   

Futures also appear slightly more hopeful trading ¾-1% higher this morning…
…although Japan and China – already running stronger – trade a little lower
Oil may see a turbulent week though as the world runs out of places to store crude
… demand down an estimated 26million barrels/day, rigs shut down, refineries scaling back 
… pipelines filled to capacity and stationary tankers being filled – quickly lifting tanker rates, 
… while Wyoming crude prices have turned negative to get customers to haul supply away!
Insurers Legal & General (+33.3%) & Phoenix Group (+30.3%) led the UK market last week…
…with high street names Whitbread (+27.0%) and JD Sports (+25.8%) close behind

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -29.21 (-2.62%) at 1,085 (YTD: -21.11%; 5YR: 18.1%)
MSCI AC World Equities (USD) down -205.27 (-2.57%) at 7,771 (YTD: -22.13%; 5YR: 17.8%)
Barclays Global Aggregate Bonds up +3.65 (+0.72%) at 510 (YTD: -0.25%; 5YR: 13.9%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -88.60 (-3.37%) at 2,541 (YTD: -21.34%; 5YR: 21.8%)
NASDAQ down -295.16 (-3.79%) at 7,502 (YTD: -16.39%; 5YR: 51.6%)
Euro STOXX 50 down -119.13 (-4.18%) at 2,729 (YTD: -27.14%; 5YR: -26.8%)
FTSE 100 down -305.40 (-5.25%) at 5,510 (YTD: -26.94%; 5YR: -20.0%)
CAC down -192.09 (-4.23%) at 4,351 (YTD: -27.21%; 5YR: -14.4%)
DAX down -368.44 (-3.68%) at 9,633 (YTD: -27.30%; 5YR: -20.3%)
Nikkei 225  down -600.25 (-3.10%) at 18,789 (YTD: -20.58%; 5YR: -3.2%)
Hang Seng down -110.93 (-0.47%) at 23,373 (YTD: -17.09%; 5YR: -6.0%)
MSCI Emerging Markets down -8.74 (-1.03%) at 843 (YTD: -24.41%; 5YR: -13.0%)
 
Selected Government Bond Yields
US 2 Year up +0.01 at 0.25 (began the year at 1.57; 5 years ago it was 0.58)
US 10 Year down -0.02 at 0.66 (began the year at 1.92; 5 years ago it was 1.95)
UK 10 Year down -0.03 at 0.37 (began the year at 0.82; 5 years ago it was 1.58)
Germany 10 Year up +0.00 at -0.48 (began the year at -0.19; 5 years ago it was 0.21)
France 10 Year down 0.00 at -0.07 (began the year at 0.12; 5 years ago it was 0.51)
Italy 10 Year up +0.00 at 1.32 (began the year at 1.41; 5 years ago it was 1.31)
Japan 10 Year down -0.01 at 0.00 (began the year at -0.02; 5 years ago it was 0.37)
Barclays EM Basket down -0.11 at 4.44 (began the year at 4.27; 5 years ago it was 4.98)
 
Selected Currencies
$ strengthened +0.0020 versus € (+0.18%) at 1.1078 ($: YTD: 1.34%; 5YR: -2.4%)
€ strengthened +0.0008 versus £ (-0.07%) at 1.1175 (€: YTD: 5.71%; 5YR: 22.5%)
$ strengthened +0.0031 versus £ (+0.25%) at 1.2382 ($: YTD: 6.64%; 5YR: 16.4%)
¥ strengthened +0.2800 versus $ (+0.26%) at 107.7200 (¥: YTD: -0.80%; 5YR: 11.5%)
 
Selected Commodities
Brent Crude ($/bbl) down -1.29 (-5.26%) at 23.25 (YTD: -65.00%; 5YR: -57.6%)
WTI Crude ($/bbl) down -1.09 (-4.82%) at 21.51 (YTD: -64.77%; 5YR: -56.0%)
Gold ($/ozt) down -9.02 (-0.56%) at 1615.15 (YTD: 6.06%; 5YR: 36.3%)
Copper ($/mt) down -13.50 (-0.28%) at 4790.50 (YTD: -22.41%; 5YR: -20.9%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros