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6th April 2020

06/04/2020

Market Data and Morning Chat

Morning Chat

Over my shoulder: Looking back, last week was on the verge of completing a week of little change.  Europe was generally flat-to-down ½% in anticipation of Friday’s open, the US down ½%.  Moreover, volatility was declining too.  However, the more-than-forecast – although not unimaginable – 701,000 decline in US non-farm payrolls was the worst fall in more than a decade. Oil prices gave up some ground as Trump’s deal tweets were greeted with a bit of hesitancy.  Meanwhile, the ongoing Covid-19 data showed an unhealthy spike in New York. It was enough to trim ½ to 1½% off the week’s equity moves.

Plain & simple: Covid-19 will likely remain the driving force of the week.  We’ve all become medical statisticians working out if case trends are moderating. However, I don’t want you to think this could be the only thing giving the market direction.  European finance ministers are due to meet tomorrow with an expectation they will announce a co-ordinated EU stimulus plan.  Here, in the UK, we’ll get the February monthly GDP Thursday (expect +0.1%). In the US, the FOMC meeting minutes and Tuesday’s job openings reports (still forecast at 6.48million), while Germany announces Industrial Production tomorrow and trade numbers Thursday. 

Something to believe in: Then there’s oil.  Prices have been thrown around by the waves created by Donald Trump’s twitter storm and comments coming out of Russia and Saudi Arabia.  Mid-week last week Brent touched $20.  Two days later – following it’s best rally ever on the deal/meeting news flow – Brent was on the cusp of $30. But just when you could believe the issue might ease, Saudi’s hastily-called OPEC+ meeting Monday has been delayed to Thursday with the Kingdom calling for globally-shared production cuts – including by US oil companies – and Trump’s threatening of tariffs in response has it easing again.

Monday kicks off the week on an upbeat note with Asia and equity futures trading up 1½ to 4%
… as he weekend closed with lower fatalities across the UK, Italy, Spain, France & the US
Sterling weakened 1½¢ on news of Boris Johnson being hospitalised
German factory orders for February down 1.4% - notably less than the 2.4% expected
Sainbury’s (+4.2%), JustEat (3.8%) & Morrison’s (+3.7%) see tasty gains Friday…
… while dividend-suspending Rolls-Royce (-9.6%) sees too much reverse thrust 
Air-conditioner maker Carrier (+25.0%) was the cool winner on demerger from United Tech

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -12.56 (-1.17%) at 1,064 (YTD: -22.63%; 5YR: 15.7%)
MSCI AC World Equities (USD) down -109.94 (-1.43%) at 7,569 (YTD: -24.16%; 5YR: 14.2%)
Barclays Global Aggregate Bonds down -1.18 (-0.23%) at 508 (YTD: -0.70%; 5YR: 12.7%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -38.25 (-1.51%) at 2,489 (YTD: -22.97%; 5YR: 19.6%)
NASDAQ down -114.23 (-1.53%) at 7,373 (YTD: -17.83%; 5YR: 49.9%)
Euro STOXX 50 down -25.50 (-0.95%) at 2,663 (YTD: -28.89%; 5YR: -28.3%)
FTSE 100 down -64.72 (-1.18%) at 5,416 (YTD: -28.20%; 5YR: -20.8%)
CAC down -66.38 (-1.57%) at 4,155 (YTD: -30.50%; 5YR: -18.1%)
DAX down -45.05 (-0.47%) at 9,526 (YTD: -28.10%; 5YR: -20.4%)
Nikkei 225  up +520.11 (+2.92%) at 18,340 (YTD: -22.47%; 5YR: -5.5%)
Hang Seng up +284.61 (+1.22%) at 23,521 (YTD: -16.56%; 5YR: -6.9%)
MSCI Emerging Markets down -6.81 (-0.81%) at 832 (YTD: -25.38%; 5YR: -17.3%)
 
Selected Government Bond Yields
US 2 Year up +0.01 at 0.24 (began the year at 1.57; 5 years ago it was 0.50)
US 10 Year up +0.03 at 0.63 (began the year at 1.92; 5 years ago it was 1.90)
UK 10 Year down -0.02 at 0.31 (began the year at 0.82; 5 years ago it was 1.59)
Germany 10 Year down 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 0.07 (began the year at 0.12; 5 years ago it was 0.48)
Italy 10 Year up +0.00 at 1.55 (began the year at 1.41; 5 years ago it was 1.30)
Japan 10 Year up +0.02 at 0.00 (began the year at -0.02; 5 years ago it was 0.34)
Barclays EM Basket up +0.00 at 4.45 (began the year at 4.27; 5 years ago it was 4.95)
 
Selected Currencies
$ weakened -0.0040 versus € (-0.37%) at 1.0827 ($: YTD: 3.58%; 5YR: 1.5%)
€ strengthened +0.0029 versus £ (-0.26%) at 1.1306 (€: YTD: 4.48%; 5YR: 20.2%)
$ weakened -0.0015 versus £ (-0.12%) at 1.2242 ($: YTD: 7.70%; 5YR: 18.1%)
¥ weakened -0.4800 versus $ (-0.44%) at 108.9700 (¥: YTD: 0.36%; 5YR: 9.3%)
 
Selected Commodities
Brent Crude ($/bbl) down -1.19 (-3.99%) at 28.67 (YTD: -56.84%; 5YR: -49.8%)
WTI Crude ($/bbl) up +3.55 (+14.32%) at 28.34 (YTD: -53.59%; 5YR: -42.3%)
Gold ($/ozt) down -0.56 (-0.03%) at 1618.54 (YTD: 6.29%; 5YR: 32.7%)
Copper ($/mt) down -57.50 (-1.17%) at 4839.50 (YTD: -21.61%; 5YR: -19.1%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros