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17 December 2019

17/12/2019

Market Data and Morning Chat

Morning Chat 

The best day: After futures signalled a positive start UK equities did not disappoint posting a more than 2¼% gain – the best single day gain for over three years – and pushed the market to a four-month high.  The gains came on the back of the UK election results and news of a US-China trade deal.  But wait, there was more. The Bank of England were fearless in their confirmation that the big UK banks would easily meet the challenges of a no-deal Brexit or a worse recession than in the financial crisis. No wonder the banking sector led equities up.

Shake it off: European equities also rallied yesterday though not as robustly as the UK as the markets ignored the flash Markit manufacturing PMI’s for the big economies. The PMI’s were disappointing and show Europe’s not yet out of the woods.  Germany reversed three months of improvement falling back to 43.4. France, at 50.3, was expected to see a small slowdown but dropped from 51.7 last month. Meanwhile the UK manufacturing numbers continued to slide falling to 47.4 (versus 49.3 expected). The various services PMI’s were not much better, with only France exceeding expectations. Helpfully, US-China trade news trumped PMIs

Welcome to New York: Moving swiftly across the Atlantic, US stocks also saw sparks fly as all three major indices attained new highs. That trade deal news helping again, but so too the Markit PMI data though the Empire State number was marginally disappointing. Unlike the European results, the flash US manufacturing PMI was in-line with expectations and only marginally off last month. Back to December, the US services PMI rose to 52.2 from 51.6 last month – better-than-expected.  As to Empire State manufacturing? It was expected to be 4, but came in at 3.5. Still, beats the 2.9 last month.

After yesterday’s strong gains, futures a bit more mixed today
The boys (and girls) are back in town as Parliament reconvenes today
Unilever (+1.9%) airs some dirty washing as South Asia slowdown hampers 2020 sales growth.
Boeing (-4.3%) aims to cut the cash afterburners by shuttering 737Max production temporarily
Micron (+3.4%) and ServiceNow (+3.2%) helped Tech sector stocks lead the S&P gains

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +9.16 (+0.68%) at 1,363 (YTD: 25.84%; 5YR: 61.7%)
MSCI AC World Equities (USD) up +75.14 (+0.77%) at 9,883 (YTD: 27.17%; 5YR: 58.4%)
Barclays Global Aggregate Bonds down -0.88 (-0.17%) at 510 (YTD: 6.48%; 5YR: 10.9%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +22.65 (+0.71%) at 3,191 (YTD: 27.31%; 5YR: 58.6%)    
NASDAQ up +79.35 (+0.91%) at 8,814 (YTD: 32.84%; 5YR: 89.8%)    
Euro STOXX 50 up +41.67 (+1.12%) at 3,773 (YTD: 25.70%; 5YR: 23.6%)    
FTSE 100 up +165.61 (+2.25%) at 7,519 (YTD: 11.76%; 5YR: 18.7%)    
CAC up +72.64 (+1.23%) at 5,992 (YTD: 26.66%; 5YR: 45.7%)    
DAX up +124.94 (+0.94%) at 13,408 (YTD: 26.98%; 5YR: 40.5%)    
Nikkei 225  up +113.77 (+0.47%) at 24,066 (YTD: 20.24%; 5YR: 43.1%)    
Hang Seng up +302.92 (+1.10%) at 27,811 (YTD: 7.60%; 5YR: 23.1%)    
MSCI Emerging Markets up +1.04 (+0.10%) at 1,088 (YTD: 12.65%; 5YR: 18.5%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.63 (began the year at 2.49; 5 years ago it was 0.62)    
US 10 Year down -0.01 at 1.86 (began the year at 2.68; 5 years ago it was 2.14)    
UK 10 Year up +0.03 at 0.82 (began the year at 1.28; 5 years ago it was 1.77)    
Germany 10 Year down -0.02 at -0.29 (began the year at 0.24; 5 years ago it was 0.59)    
France 10 Year down -0.02 at 0.00 (began the year at 0.70; 5 years ago it was 0.87)    
Italy 10 Year down -0.03 at 1.27 (began the year at 2.74; 5 years ago it was 1.96)    
Japan 10 Year up +0.01 at -0.01 (began the year at -0.01; 5 years ago it was 0.36)    
Barclays EM Basket up +0.01 at 4.22 (began the year at 6.22; 5 years ago it was 5.47)
    
Selected Currencies    
$ weakened -0.0002 versus € (-0.02%) at 1.1145 ($: YTD: 2.68%; 5YR: 10.2%)    
€ strengthened +0.0051 versus £ (-0.43%) at 1.1909 (€: YTD: -6.54%; 5YR: 5.9%)    
$ strengthened +0.0055 versus £ (+0.41%) at 1.3271 ($: YTD: -4.12%; 5YR: 15.2%)    
¥ strengthened +0.0200 versus $ (+0.02%) at 109.6000 (¥: YTD: -0.05%; 5YR: 7.3%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.05 (+0.07%) at 67.16 (YTD: 26.31%; 5YR: 12.1%)    
WTI Crude ($/bbl) up +0.14 (+0.23%) at 60.21 (YTD: 32.59%; 5YR: 7.7%)    
Gold ($/ozt) up +0.20 (+0.01%) at 1476.40 (YTD: 15.12%; 5YR: 24.1%)    
Copper ($/mt) up +69.00 (+1.13%) at 6199.00 (YTD: 3.92%; 5YR: -2.6%)    
    
Data sourced from Bloomberg as of the close of last trading day.    
YTD = Year-to-date return; 5YR = five year return    

 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros