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9th April 2020

09/04/2020

Market Data and Morning Chat

Morning Chat

In time the savage bull doth bear the yoke: Markets have closed (hath?), and, after a seemingly long few days, a technical bull market (20% rally from the low) arrived for the US, Germany and global equities overall.  The fastest correction, fastest bear market, now fastest bull market… ermm, since 2008.  It’s worth remembering 2008. It only took 11 trading days (one less than now) but didn’t last. Yes, much this time is, well, different – rapid massive stimulus, stronger banks and lower interest rates. But we also still have Covid-19. Time is needed to see if this bull is strong enough.

I'll lead you to some Biden. Hearty thanks! The opening acts 2020’s US election have now been played out.  Bernie Sanders’ decision to exit stage right after his mauling in the Primaries has cleared the way amidst current tragedies for the drama to shift to battles ahead, Joe Biden for the Democrats against the incumbent Donald Trump.  National polling gives Biden the edge, but California overstates the Democrat Electoral College position.  So it remains for Wisconsin, Michigan, Pennsylvania, North Carolina, Florida & Arizona to play their part as swing states, with the economy & Covid-19 no doubt playing  decisive roles

Not a mouse shall disturb this hallow'd house: Disney+ may however give Shakespeare a twist in his tale.  Their new streaming service had one of the best aids to its launch – mass sequestrations across the US and Europe to tackle Covid-19. When Disney reported earnings on February 4, the company had 26.5million subscribers. Two months later and the total has now passed 50million – the level they hoped to reach by 2024 (Netflix has 167million)! Disney shares gained a decent 6.8% on the news to be 22% down on the pre-covid-19 level – not bad for a heavily people-oriented business in lockdown.

Equity future look to eke out further slight gains today as Asia follows gains in the US
A sign an OPEC+ deal is probable? The Saudis sovereign wealth fund added $1billion of shares
…  in four oil majors Royal Dutch, Total, Eni & Equinor, plus added an 8.2% stake in Carnival
JustEat sees Q1 orders rise 50%. The take-away? Food delivery services benefit from Covid-19
Travel & Leisure stock lead yesterday’s market gains, with Carnival (+6.0%) floating higher
New Zealand PM Jacinda Ardern declares Easter Bunny an essential worker – Happy Easter!!
... The Morning Chat will resume after the Easter weekend - Stay Healthy!!

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +22.91 (+2.03%) at 1,154 (YTD: -16.10%; 5YR: 23.8%)
MSCI AC World Equities (USD) up +193.53 (+2.40%) at 8,266 (YTD: -17.17%; 5YR: 24.1%)
Barclays Global Aggregate Bonds up +0.49 (+0.10%) at 509 (YTD: -0.59%; 5YR: 13.8%)
 
Selected Equity Indices (Capital returns)
S&P 500 up +90.57 (+3.41%) at 2,750 (YTD: -14.88%; 5YR: 31.5%)
NASDAQ up +203.64 (+2.58%) at 8,091 (YTD: -9.83%; 5YR: 62.6%)
Euro STOXX 50 down -6.40 (-0.22%) at 2,851 (YTD: -23.87%; 5YR: -24.6%)
FTSE 100 down -26.72 (-0.47%) at 5,678 (YTD: -24.72%; 5YR: -19.1%)
CAC up +4.48 (+0.10%) at 4,443 (YTD: -25.68%; 5YR: -14.7%)
DAX down -23.81 (-0.23%) at 10,333 (YTD: -22.01%; 5YR: -15.1%)
Nikkei 225  down -98.50 (-0.51%) at 19,255 (YTD: -18.61%; 5YR: -3.4%)
Hang Seng up +170.43 (+0.71%) at 24,141 (YTD: -14.36%; 5YR: -10.4%)
MSCI Emerging Markets down -4.30 (-0.49%) at 874 (YTD: -21.60%; 5YR: -15.0%)
 
Selected Government Bond Yields
US 2 Year down -0.01 at 0.24 (began the year at 1.57; 5 years ago it was 0.55)
US 10 Year down -0.03 at 0.74 (began the year at 1.92; 5 years ago it was 1.96)
UK 10 Year down -0.03 at 0.38 (began the year at 0.82; 5 years ago it was 1.57)
Germany 10 Year down 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 0.45)
Italy 10 Year down 0.00 at 1.65 (began the year at 1.41; 5 years ago it was 1.30)
Japan 10 Year down -0.01 at 0.00 (began the year at -0.02; 5 years ago it was 0.36)
Barclays EM Basket down -0.06 at 4.29 (began the year at 4.27; 5 years ago it was 4.95)
 
Selected Currencies
$ unchanged 0.0000 versus € (0.00%) at 1.0864 ($: YTD: 3.25%; 5YR: -1.8%)
€ strengthened +0.0024 versus £ (-0.21%) at 1.1395 (€: YTD: 3.67%; 5YR: 21.2%)
$ strengthened +0.0026 versus £ (+0.21%) at 1.2380 ($: YTD: 6.66%; 5YR: 16.0%)
¥ weakened -0.3000 versus $ (-0.28%) at 108.9400 (¥: YTD: 0.33%; 5YR: 10.5%)
 
Selected Commodities
Brent Crude ($/bbl) down -0.32 (-1.15%) at 27.49 (YTD: -58.61%; 5YR: -50.8%)
WTI Crude ($/bbl) up +1.46 (+6.18%) at 25.09 (YTD: -58.91%; 5YR: -50.2%)
Gold ($/ozt) down -1.81 (-0.11%) at 1648.17 (YTD: 8.23%; 5YR: 37.9%)
Copper ($/mt) down -37.50 (-0.74%) at 5002.50 (YTD: -18.97%; 5YR: -16.8%)

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros