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8th April 2020

08/04/2020

Market Data and Morning Chat

Morning Chat

For oil intents and purposes: We’ve just seen the faster-ever bear market – a decline more than 20% – so we’re all hoping for the fastest equity recovery, and the sight of a bull market – a 20% or more rally from the trough – would help. To be fair, they’re just numbers, but the media focus on them.  We’ve seen a bull in US intraday trading, though that doesn’t count, but today opened in the zone. However, a US estimate of a 12.2million barrel-a-day decline in global oil consumption whumped prices, in turn trimming equities and putting the bull back in the barn.

Just the job: Yesterday saw the US job opening or JOLTS report. With news of increasing furloughs and rising unemployment data from February is somewhat redundant, but still pleasing to see it was stronger than expected.  However, it’s the present and looking forward that matters.  In the US, the CARES act ensures each individual earning up to $75,000 gets $1,200. The act also raises unemployment insurance by $600 a week which compares favourably with the median c$560 service worker salary – the group greatest hit by job losses. Chuck in state benefits and many might find they’ve had a pay rise!

Food for thought: So US consumers might be carried through these times more healthily than anticipated.  However, their bills – and ours – might be on the up.  While stocks, bonds and oil have all fallen, key food-stuffs prices have risen. Rice, corn and durum wheat (used in pasta) – widely acknowledged as key calorie sources much of the world’s population – are up 6-8% this year and are above the their 5-year averages for this time of year. Given global supply levels are generally robust – some flooding hit Thai rice production – price gains are thought to be over distribution constraints triggered by Covid-19.

Market futures while marginally lower in Europe, are trying for that bull again up 1¼%
Coffee's also risen 13½% in the last month but panic not, prices remain seasonally very benign
While many nations, including Italy, Norway and Denmark, contemplate easing lockdowns…
… Germany sees their new infection rate rise again, but the trend remains positive
… and Wuhan sees travel restrictions eased as China has first death-free day
Carnival Cruises (+22.2) sails ahead of UK stocks again with Easyjet (+15.1%) also flying up
… while airline-dependant Amadeus (+10.6%), Safran (+6.9%) & Airbus (+6.6%) lead in Europe

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +8.09 (+0.72%) at 1,131 (YTD: -17.77%; 5YR: 22.1%)
MSCI AC World Equities (USD) up +58.08 (+0.72%) at 8,072 (YTD: -19.11%; 5YR: 21.6%)
Barclays Global Aggregate Bonds up +1.23 (+0.24%) at 508 (YTD: -0.68%; 5YR: 13.0%)
 
Selected Equity Indices (Capital returns)
S&P 500 down -4.27 (-0.16%) at 2,659 (YTD: -17.69%; 5YR: 27.7%)
NASDAQ down -25.98 (-0.33%) at 7,887 (YTD: -12.10%; 5YR: 59.3%)
Euro STOXX 50 up +61.70 (+2.21%) at 2,858 (YTD: -23.70%; 5YR: -23.6%)
FTSE 100 up +122.06 (+2.19%) at 5,704 (YTD: -24.37%; 5YR: -17.8%)
CAC up +92.13 (+2.12%) at 4,438 (YTD: -25.76%; 5YR: -13.6%)
DAX up +281.53 (+2.79%) at 10,357 (YTD: -21.83%; 5YR: -14.0%)
Nikkei 225  up +488.85 (+2.58%) at 19,439 (YTD: -17.83%; 5YR: -1.8%)
Hang Seng down -188.71 (-0.78%) at 24,065 (YTD: -14.63%; 5YR: -8.3%)
MSCI Emerging Markets up +24.32 (+2.85%) at 878 (YTD: -21.22%; 5YR: -14.0%)
 
Selected Government Bond Yields
US 2 Year down 0.00 at 0.26 (began the year at 1.57; 5 years ago it was 0.53)
US 10 Year up +0.01 at 0.72 (began the year at 1.92; 5 years ago it was 1.90)
UK 10 Year up +0.08 at 0.41 (began the year at 0.82; 5 years ago it was 1.58)
Germany 10 Year up +0.00 at -0.31 (began the year at -0.19; 5 years ago it was 0.16)
France 10 Year up +0.00 at 0.17 (began the year at 0.12; 5 years ago it was 0.44)
Italy 10 Year down 0.00 at 1.61 (began the year at 1.41; 5 years ago it was 1.25)
Japan 10 Year up +0.00 at 0.01 (began the year at -0.02; 5 years ago it was 0.35)
Barclays EM Basket down -0.10 at 4.36 (began the year at 4.27; 5 years ago it was 4.92)
 
Selected Currencies
$ strengthened +0.0017 versus € (+0.16%) at 1.0879 ($: YTD: 3.12%; 5YR: -0.6%)
€ weakened -0.0012 versus £ (+0.11%) at 1.1335 (€: YTD: 4.22%; 5YR: 21.7%)
$ strengthened +0.0006 versus £ (+0.05%) at 1.2332 ($: YTD: 7.02%; 5YR: 17.3%)
¥ weakened -0.0700 versus $ (-0.06%) at 108.9100 (¥: YTD: 0.30%; 5YR: 10.1%)
 
Selected Commodities
Brent Crude ($/bbl) up +0.54 (+2.02%) at 27.32 (YTD: -58.87%; 5YR: -50.6%)
WTI Crude ($/bbl) down -2.45 (-9.39%) at 23.63 (YTD: -61.30%; 5YR: -56.2%)
Gold ($/ozt) down -5.25 (-0.32%) at 1646.84 (YTD: 8.14%; 5YR: 36.9%)
Copper ($/mt) up +156.00 (+3.19%) at 5040.00 (YTD: -18.37%; 5YR: -16.9%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros