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4th May 2020

04/05/2020

Market Data and Morning Chat

Morning Chat

Mind what you have learned: With European markets closed Friday – thus preserving their positive week – it fell to the UK and US to set the tone.  Given it was a week with increased moves to ease lockdowns, the beginnings of an oil price recovery (which increased gasoline usage numbers might help) plus some upbeat earnings helped the Nasdaq get to within touching distance of closing positive year-to-date. But it was also reminded investors that GDP will be down, with the US, France & EU posting negative growth and Trump was talking tariffs again. Result? A Friday slide and down week.

May the forth be with you: This might not be the day your looking for – given Friday, I’ve got a bad feeling about today. Well, not as bad as some days recently, but probably a weak day, well a down day, probably. China & Jaoan are on holiday (Japan until Thursday), so they didn’t provide any leadership. Plus we had a really strong rally over April – the third best monthly gain since WWII – so there’s less excitement and maybe some fear – at least in the markets – over the easing of lockdown restrictions. Oh, and we get the finalised PMI data.

Difficult to see. Always in motion is the future: As well as today’s manufacturing PMIs, this week witnesses the continuation of earnings season – there are 1,300 companies reporting in the US alone (no, the Morning Chat will not cover them all) – with a  range of consumer-focussed names like Disney, General Motors, Anheuser-Busch & Paypal plus shale-oil producers reporting.  Tomorrow sees US balance of trade data. Services PMIs Wednesday and Thursday, the Bank of England rate decision (figure unchanged) & US non-farm payrolls (estimated at 21million). Additionally, we’ll discover if investors have a disturbing lack of faith in the easing of lockdowns.

Equity futures are down, but only by ½% or so in the UK and US, which is not too bad
… While Europe makes up for sleeping in on Friday with markets playing catch-up
Covid-19 lockdown restrictions continue to ease across the continent
… the Canaries and Mallorca will see hotels, bars and restaurants allowed to trade
… Germany will allow churches, museums, zoos & playgrounds will re-open
Weekday traffic in Wuhan is now mostly back to normal following the rest of China
Australian building permits only down 4% in March, not the 15% fall expected
Royal Bank of Scotland (+2.4%) as trading profits counters provision increase.
Colgate (-2.5%) shows an earnings beat as we’re washing our hands and feeding our pets 
Estee Lauder (-1.9%) results looked much better-than-expected beating forecasts by 17%
Chevron (-2.9%) found earnings greased by refined products margin improvement
But Exxon (-6.9%) didn’t show the same energy with first dividend cut in 13 years

 

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -25.44 (-2.09%) at 1,191 (YTD: -13.41%; 5YR: 27.4%)
MSCI AC World Equities (USD) down -204.19 (-2.33%) at 8,552 (YTD: -14.30%; 5YR: 26.8%)
Barclays Global Aggregate Bonds down -0.24 (-0.05%) at 520 (YTD: 1.58%; 5YR: 15.3%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -81.72 (-2.81%) at 2,831 (YTD: -12.38%; 5YR: 33.9%)
NASDAQ down -284.60 (-3.20%) at 8,605 (YTD: -4.10%; 5YR: 71.5%)
Euro STOXX 50 unchanged 0.00 (0.00%) at 2,928 (YTD: -21.82%; 5YR: -19.4%)
FTSE 100 down -138.15 (-2.34%) at 5,763 (YTD: -23.59%; 5YR: -17.5%)
CAC down -98.93 (-2.12%) at 4,572 (YTD: -23.52%; 5YR: -9.4%)
DAX down -246.10 (-2.22%) at 10,862 (YTD: -18.02%; 5YR: -5.2%)
Nikkei 225  down -574.34 (-2.84%) at 19,619 (YTD: -17.07%; 5YR: 0.4%)
Hang Seng down -984.02 (-3.99%) at 23,660 (YTD: -16.07%; 5YR: -15.9%)
MSCI Emerging Markets down -8.17 (-0.88%) at 917 (YTD: -17.75%; 5YR: -12.5%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.19 (began the year at 1.57; 5 years ago it was 0.60)
US 10 Year down -0.03 at 0.61 (began the year at 1.92; 5 years ago it was 2.14)
UK 10 Year up +0.02 at 0.25 (began the year at 0.82; 5 years ago it was #N/A Start Date)
Germany 10 Year up +0.00 at -0.59 (began the year at -0.19; 5 years ago it was 0.45)
France 10 Year up +0.00 at -0.11 (began the year at 0.12; 5 years ago it was 0.72)
Italy 10 Year up +0.00 at 1.76 (began the year at 1.41; 5 years ago it was 1.53)
Japan 10 Year up +0.01 at -0.03 (began the year at -0.02; 5 years ago it was 0.36)
Barclays EM Basket down -0.02 at 3.85 (began the year at 4.27; 5 years ago it was 5.00)
 
Selected Currencies
$ strengthened +0.0053 versus € (+0.48%) at 1.0935 ($: YTD: 2.62%; 5YR: 2.0%)
€ strengthened +0.0005 versus £ (-0.04%) at 1.1383 (€: YTD: 3.78%; 5YR: 19.1%)
$ strengthened +0.0065 versus £ (+0.52%) at 1.2448 ($: YTD: 6.14%; 5YR: 17.7%)
¥ strengthened +0.0500 versus $ (+0.05%) at 106.7300 (¥: YTD: -1.73%; 5YR: 12.6%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.53 (-2.26%) at 22.93 (YTD: -65.48%; 5YR: -64.9%)
WTI Crude ($/bbl) up +0.94 (+4.99%) at 19.78 (YTD: -67.61%; 5YR: -66.6%)
Gold ($/ozt) up +3.35 (+0.20%) at 1701.02 (YTD: 11.70%; 5YR: 43.0%)
Copper ($/mt) down -78.50 (-1.51%) at 5110.00 (YTD: -17.23%; 5YR: -20.2%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros