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5th May 2020

05/05/2020

Market Data and Morning Chat

Morning Chat

Golden brown stuff: After the lows of the May futures contract, oil prices have seen a fairly continuous rally closing higher each day since bar last Monday and Tuesday, and the run since then is the longest upswing since last July!  The West Texas spot price cracked $20, and the June future rallied up over 7% to close over $21 a barrel capping a near-66% run up for the week.  Early news that inventories at Cushing Oklahoma might only rise by a modest 1.8million barrels shows how Permian-based oil companies are capping production helping bring the rampant over-supply under control. 

5 minutes: That’s about how long it took for Monday’s equity move to be completed by most European markets.  After Friday’s holiday to celebrate Labour day by not working, it was highly likely Friday’s declines felt by the US and UK would echo in Europe.  They did. However, after the initial declines as soon as the Continental exchanges opened their doors, they appeared to get a grip and mostly track sideways for the rest of the day.  Meanwhile, UK equities barely moved.  Given the only major data was manufacturing PMIs which just confirmed the flash estimates, it was rather unsurprising.

Big in America: As has been typical of late, once European markets close for the day, the US takes a little directional shift of its own.  Yesterday followed the habit with a late-in-the-day rally to see indices close up (only just for the Dow).  Some of the gains came on the back of the oil price gains, as energy sector stocks jumped nearly 3¾%. Meanwhile, the tech sector was pushed up by the big guys seeing gains, Microsoft (+2.5%), it appears, on a deal to strengthen its Azure offering, while Apple (+1.5%) rallied on news of a new debt issuance.
 
Easing lockdowns and the rising price of oil are pushing equity futures up this morning
Air Canada (-8.7%) CEO Rovinescu sees airlines facing 3 years of turbulence over Covid-19
Tyson Foods (-7.0%) reports weaker earnings over a pig of a quarter with costs rising
… with worker shortages leading to plant shutdowns and reduced beef & chicken output
BNP Paribas (-5.5%)saw their earnings till raided to raise bad debt provisions by €½billion
… so far, European banks have doubled debt provisions, US banks quintupled
Ferrari (+1.5%) Q1 earnings on a solid pace considering virus hit, but guidance dented

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -5.89 (-0.49%) at 1,185 (YTD: -13.84%; 5YR: 28.1%)
MSCI AC World Equities (USD) down -29.23 (-0.34%) at 8,523 (YTD: -14.59%; 5YR: 27.6%)
Barclays Global Aggregate Bonds down -1.77 (-0.34%) at 518 (YTD: 1.24%; 5YR: 15.4%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +12.03 (+0.42%) at 2,843 (YTD: -12.01%; 5YR: 36.1%)
NASDAQ up +105.77 (+1.23%) at 8,711 (YTD: -2.92%; 5YR: 76.4%)
Euro STOXX 50 down -111.45 (-3.81%) at 2,816 (YTD: -24.80%; 5YR: -20.6%)
FTSE 100 down -9.28 (-0.16%) at 5,754 (YTD: -23.71%; 5YR: -16.9%)
CAC down -193.95 (-4.24%) at 4,378 (YTD: -26.76%; 5YR: -12.0%)
DAX down -394.84 (-3.64%) at 10,467 (YTD: -21.00%; 5YR: -7.6%)
Nikkei 225  down -574.34 (-2.84%) at 19,619 (YTD: -17.07%; 5YR: 0.4%)
Hang Seng up +205.25 (+0.87%) at 23,819 (YTD: -15.50%; 5YR: -14.2%)
MSCI Emerging Markets down -28.79 (-3.14%) at 888 (YTD: -20.34%; 5YR: -15.3%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.18 (began the year at 1.57; 5 years ago it was 0.62)
US 10 Year up +0.02 at 0.63 (began the year at 1.92; 5 years ago it was 2.19)
UK 10 Year down -0.02 at 0.23 (began the year at 0.82; 5 years ago it was 1.97)
Germany 10 Year down 0.00 at -0.57 (began the year at -0.19; 5 years ago it was 0.51)
France 10 Year up +0.00 at -0.06 (began the year at 0.12; 5 years ago it was 0.82)
Italy 10 Year up +0.00 at 1.76 (began the year at 1.41; 5 years ago it was 1.80)
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 -0.01 at 3.84 (began the year at 4.27; 5 years ago it was 5.07)
 
Selected Currencies

$ weakened -0.0006 versus € (-0.06%) at 1.0906 ($: YTD: 2.88%; 5YR: 2.6%)
€ weakened -0.0021 versus £ (+0.18%) at 1.1428 (€: YTD: 3.37%; 5YR: 18.8%)
$ weakened -0.0030 versus £ (-0.24%) at 1.2463 ($: YTD: 6.03%; 5YR: 18.0%)
¥ strengthened +0.2100 versus $ (+0.20%) at 106.6200 (¥: YTD: -1.84%; 5YR: 12.4%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.03 (+0.12%) at 24.78 (YTD: -62.69%; 5YR: -62.7%)
WTI Crude ($/bbl) up +0.61 (+3.08%) at 20.39 (YTD: -66.61%; 5YR: -65.4%)
Gold ($/ozt) down -5.35 (-0.31%) at 1701.06 (YTD: 11.70%; 5YR: 42.5%)
Copper ($/mt) up +13.00 (+0.25%) at 5123.00 (YTD: -17.02%; 5YR: -20.0%)
 

Nathalie Plantevin Directeur Société Générale Entrepreneurs Société Générale Private Banking France