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4th February 2020

04/02/2020

Market Data and Morning Chat

Morning Chat

What to make of the markits: Monday was Markit-day, with the release of various Markit manufacturing Purchasing Managers’ Indices (PMIs). In Asia, the news wasn’t so upbeat with PMIs falling in China, South Korea and Indonesia – though India’s strengthening numbers should curry favour with investors. European PMIs should also hearten investors with only Spain’s slipping, while France and, ready for it, the UK both moving to expansionary levels. Canada followed their lead and although the US dipped it was not as much as feared. All round, the surveys show a strengthening outlook which probably helped lift the developed equity markets.

Duel or no-duel Brexit: The lull’s beginning to end, trade negotiations soon to start, and both sides are marking out red lines. So far, there seems little over-lap yet many contentious issues to fight over such as fishing rights. The principal issue, however, is the “level playing field”. Michel Barnier fired off that the UK must accept the EU’s social and regulatory model for a deep deal. Boris Johnson shot back a deal shouldn’t mean “accepting EU rules on competition policy, subsidies, social protection, the environment or…similar”, any more than the EU need accept UK rules. Pistols at dawn, Gentlemen?

Alphabet’s numbers and more: Alphabet, Google’s parent listing, reported earnings yesterday and for the first time detailed segment revenues for YouTube and Cloud. Those segments were very robust – YouTube’s $15.2billion in revenues, up 36%, are roughly on par with – or a little ahead of – the likes of CBS and Sky, while Cloud revenues, up 53%, tally a further $8.9billion. However, it wasn’t enough. The $46.1billion in overall revenues missed estimates and the shares are down 1.26% in total yesterday.  Gilead had a good day though, rising 5.0% after announcing their remdesivir is being tested on humans to tackle the coronavirus.

… and China scores on the rebound, sorry, hockey reference, but the CSI300 rallied 4.1% today
… helping push equity futures up ½ to ¾% across the European and US markets today
 The great state of Iowa says “I’ll owe ya” as “inconsistencies” delay release of caucus results
Tesla (+19.9%) drove home a $23billion gain in market cap (more than Fiat Chrysler) yesterday
… on Panasonic’s 10.0% rally on earnings aided by first battery profit in JV with Tesla
So Ryanair’s great earnings did help yesterday as their shares were flying high up 5.8%

Market Data

Selected Global Aggregates (Total returns, unhedged) 
MSCI AC World Equities (Local) up +5.90 (+0.43%) at 1,373 (YTD: -0.17%; 5YR: 55.6%)
MSCI AC World Equities (USD) up +38.45 (+0.39%) at 9,960 (YTD: -0.20%; 5YR: 55.4%)
Barclays Global Aggregate Bonds down -1.05 (-0.20%) at 517 (YTD: 1.07%; 5YR: 13.4%)
 
Selected Equity Indices (Capital returns) 
S&P 500 up +23.40 (+0.73%) at 3,249 (YTD: 0.56%; 5YR: 59.1%) 
NASDAQ up +122.47 (+1.34%) at 9,273 (YTD: 3.35%; 5YR: 96.6%) 
Euro STOXX 50 up +20.36 (+0.56%) at 3,661 (YTD: -2.24%; 5YR: 7.2%) 
FTSE 100 up +40.30 (+0.55%) at 7,326 (YTD: -2.87%; 5YR: 6.8%) 
CAC up +26.17 (+0.45%) at 5,833 (YTD: -2.43%; 5YR: 24.2%) 
DAX up +63.22 (+0.49%) at 13,045 (YTD: -1.54%; 5YR: 19.6%) 
Nikkei 225  up +112.65 (+0.49%) at 23,085 (YTD: -2.42%; 5YR: 30.6%) 
Hang Seng up +306.27 (+1.16%) at 26,663 (YTD: -5.42%; 5YR: 8.0%) 
MSCI Emerging Markets down -2.02 (-0.19%) at 1,060 (YTD: -4.87%; 5YR: 8.1%) 
 
Selected Government Bond Yields 
US 2 Year up +0.03 at 1.38 (began the year at 1.57; 5 years ago it was 0.48) 
US 10 Year up +0.03 at 1.55 (began the year at 1.92; 5 years ago it was 1.75) 
UK 10 Year down -0.01 at 0.51 (began the year at 0.82; 5 years ago it was 1.53) 
Germany 10 Year up +0.02 at -0.43 (began the year at -0.19; 5 years ago it was 0.37) 
France 10 Year up +0.01 at -0.17 (began the year at 0.12; 5 years ago it was 0.59) 
Italy 10 Year up +0.01 at 0.96 (began the year at 1.41; 5 years ago it was 1.55) 
Japan 10 Year down -0.01 at -0.07 (began the year at -0.02; 5 years ago it was 0.38) 
Barclays EM Basket down -0.02 at 4.01 (began the year at 4.27; 5 years ago it was 4.96)
 
Selected Currencies 
$ strengthened +0.0007 versus € (+0.06%) at 1.1052 ($: YTD: 1.58%; 5YR: 3.2%) 
€ strengthened +0.0042 versus £ (-0.36%) at 1.1718 (€: YTD: 0.81%; 5YR: 13.7%) 
$ strengthened +0.0056 versus £ (+0.43%) at 1.2949 ($: YTD: 2.37%; 5YR: 14.8%) 
¥ weakened -0.2700 versus $ (-0.25%) at 108.9400 (¥: YTD: 0.33%; 5YR: 7.9%) 
 
Selected Commodities 
Brent Crude ($/bbl) up +0.38 (+0.71%) at 53.62 (YTD: -19.27%; 5YR: 0.9%) 
WTI Crude ($/bbl) down -1.45 (-2.81%) at 50.11 (YTD: -17.93%; 5YR: -5.5%) 
Gold ($/ozt) down -3.22 (-0.20%) at 1572.49 (YTD: 3.26%; 5YR: 24.5%) 
Copper ($/mt) down -42.00 (-0.75%) at 5525.00 (YTD: -10.51%; 5YR: -2.9%) 

 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros