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3rd April 2020

03/04/2020

Market Data and Morning Chat

Morning Chat

A little bit more: Maybe Tokyo didn’t hear the beat – Japanese equities were a sour note yesterday slipping nearly 1½% – but the other major markets were in concert singing a different tune as the Europeans were up nearly ½% and the Americans going for a bit more big & beautiful, rallying 2¼%. Oil prices were the drug the Doctor ordered to Hook enough optimism to overlook The Medicine Show.  Certainly it’s desperately sad news Covid-19 numbers have now passed a million cases, but given the recent pace of reports, it was an inevitable milestone. Meanwhile energy stocks were dancing higher.  

A little bit of energy in the oil price: Dancing? Energy stocks were positively a-twitter, with the MSCI world energy sector up 6.9%. Here, Royal Dutch Shell gushed up 9.4% and BP 5.9%.  US shale names Concho and Pioneer saw their shares pumped up by 12.1% and 10.9% respectively while Brent crude saw a best-day-ever 21.9% gain (It was 50.9% at one point).  Speaking of Twitter, it was Donald Trump’s tweet suggesting he’d brokered a deal (of course) between Saudi Arabia and Russia to cut output.  There were quick denials, but Saudi officials did confirm calling an “urgent” OPEC+ meeting.  

A little bit of an underestimate: In a world of averages, it’s the degree by which each sample average varies – the variance – that often proves significant.  The ADP employment estimate was a surprisingly benign 27,000 versus a then consensus 150,000. Statistically a big miss.  Later today we get the US non-farm payrolls mid-month survey and consensus calls for a 100,000 drop.  Maybe it’ll be equally benign.  The headline you’ll notice though is last week’s 6.6million initial jobless claims – nearly double the estimate.  However, given the way the $2trillion deal Congress and the President just ratified works, maybe not so surprising.

… and it seems the jobless claims number may be dampening future slightly this morning
Chancellor Sunak is expected to expand loan guarantees to firms with up to £½billion turnover 
At 0.02% yield, UK 3-month T-bill offers less than at the post-Brexit referendum low
Tesla (+18.0% aftremarket) drove up as deliveries of 88,400 cars in Q1 wallops expectations
Numerous analysts upgraded Dollar General (+4.3%) yesterday helping shares buck the sell-off
Kroger (+4.1%) shares were a special of the day as earnings & revenue beat forecasts

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +14.78 (+1.39%) at 1,077 (YTD: -21.72%; 5YR: 17.6%)
MSCI AC World Equities (USD) up +92.37 (+1.22%) at 7,679 (YTD: -23.05%; 5YR: 16.8%)
Barclays Global Aggregate Bonds down -1.26 (-0.25%) at 509 (YTD: -0.47%; 5YR: 13.0%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +56.40 (+2.28%) at 2,527 (YTD: -21.79%; 5YR: 22.3%)
NASDAQ up +126.73 (+1.72%) at 7,487 (YTD: -16.55%; 5YR: 53.2%)
Euro STOXX 50 up +8.19 (+0.31%) at 2,688 (YTD: -28.21%; 5YR: -27.6%)
FTSE 100 up +25.65 (+0.47%) at 5,480 (YTD: -27.34%; 5YR: -19.8%)
CAC up +13.72 (+0.33%) at 4,221 (YTD: -29.39%; 5YR: -16.8%)
DAX up +26.07 (+0.27%) at 9,571 (YTD: -27.76%; 5YR: -20.0%)
Nikkei 225  down -127.41 (-0.72%) at 17,691 (YTD: -25.22%; 5YR: -9.0%)
Hang Seng down -208.51 (-0.90%) at 23,072 (YTD: -18.16%; 5YR: -8.7%)
MSCI Emerging Markets up +11.27 (+1.36%) at 839 (YTD: -24.77%; 5YR: -15.7%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.22 (began the year at 1.57; 5 years ago it was 0.48)
US 10 Year down -0.01 at 0.59 (began the year at 1.92; 5 years ago it was 1.84)
UK 10 Year up +0.02 at 0.33 (began the year at 0.82; 5 years ago it was 1.59)
Germany 10 Year up +0.00 at -0.44 (began the year at -0.19; 5 years ago it was 0.19)
France 10 Year up +0.00 at 0.04 (began the year at 0.12; 5 years ago it was 0.48)
Italy 10 Year up +0.00 at 1.46 (began the year at 1.41; 5 years ago it was 1.30)
Japan 10 Year up +0.01 at -0.01 (began the year at -0.02; 5 years ago it was 0.36)
Barclays EM Basket up +0.05 at 4.44 (began the year at 4.27; 5 years ago it was 4.95)
 
Selected Currencies
$ weakened -0.0006 versus € (-0.06%) at 1.0848 ($: YTD: 3.39%; 5YR: 1.1%)
€ weakened -0.0008 versus £ (+0.07%) at 1.1413 (€: YTD: 3.50%; 5YR: 19.0%)
$ weakened -0.0015 versus £ (-0.12%) at 1.2381 ($: YTD: 6.65%; 5YR: 16.9%)
¥ strengthened +0.1200 versus $ (+0.11%) at 107.8500 (¥: YTD: -0.68%; 5YR: 10.4%)
 
Selected Commodities
Brent Crude ($/bbl) down -1.00 (-4.01%) at 23.91 (YTD: -64.00%; 5YR: -55.9%)
WTI Crude ($/bbl) up +4.48 (+22.06%) at 24.79 (YTD: -59.40%; 5YR: -49.6%)
Gold ($/ozt) down -2.43 (-0.15%) at 1611.27 (YTD: 5.81%; 5YR: 33.1%)
Copper ($/mt) up +97.00 (+2.02%) at 4897.00 (YTD: -20.68%; 5YR: -18.1%)
 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros