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5 December 2019

05/12/2019

Market Data and Morning Chat

Morning Chat 

The bite of the whipsaw: US President Donald Trump does speak off the cuff, and that cuff seems quite smudged of late.  When asked if the NHS was “on the table”, he said he didn’t know where that rumour started (clue, he started it or nudged it along in a June speech). This time he’s made comments saying discussions with China are going very well. Yet only Monday he was saying the deal might not be done until after the 2020 election. Result? Continental European equities have closed up around 1¼% and the UK up nearly ½% reversing yesterday slides.

Troubling waters for oil: Oil prices have been relatively stable – barring the September spike over the Abqaiq attack – they’ve stayed mostly between $52-$58 (West Texas) and $58-$64 (Brent) since mid-June.  The stability comes from OPEC production targets holding firm and a declining US rig count both suggesting tighter supply – handy when demand is muted.  Doesn’t mean there’s no turbulence as two recent items have moved prices sharply by 4% ($2).  Iraqi Prime Minister Adel Abdul Mahdi’s resignation Monday in the face of rioting raised assumptions of higher supply trimming the price. Yesterday, surprising lower US inventories cause prices to gush.

It’s not just polls, it’s the pollster: Assessing the last five polls, with leads of 9%, 7%, 12%, 9% and 13% and the Tories appear to be slipping. But those polls are from different pollsters which makes a difference.  Of those last five, YouGov, ICM, Kantar, Survation and Deltapoll, only Kantar and Survation vary from their previous poll leads, with Kantar up 1% to 12% and Survation at 9% down from 11%.  Not that the poll lead has been static, but with numerous pollsters with their own assumptions and inbuilt biases, taking a sample of recent polls can skew results.

US equities close up over ½%, Asian stocks and European futures mostly higher on trade hopes
Alphabet (Google, +1.9%) & Expedia (+6.2%) both jump as their respective CEOs step down 
Concho (+4.0%) gives a scare drilling down 4% before fully recovering after results let down
Slack (-4.0% after hours +1.9%) anything but with solid earnings but also less than loose costs
Tiffany and Dollar General close out the US earnings season today while Aramco starts trading

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +5.71 (+0.43%) at 1,327 (YTD: 22.44%; 5YR: 50.8%)
MSCI AC World Equities (USD) up +52.95 (+0.55%) at 9,616 (YTD: 23.73%; 5YR: 48.4%)
Barclays Global Aggregate Bonds down -0.83 (-0.16%) at 510 (YTD: 6.41%; 5YR: 12.2%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +19.56 (+0.63%) at 3,113 (YTD: 24.17%; 5YR: 50.0%)    
NASDAQ up +46.03 (+0.54%) at 8,567 (YTD: 29.11%; 5YR: 79.2%)    
Euro STOXX 50 up +49.03 (+1.36%) at 3,660 (YTD: 21.94%; 5YR: 11.7%)    
FTSE 100 up +29.74 (+0.42%) at 7,189 (YTD: 6.84%; 5YR: 6.6%)    
CAC up +72.46 (+1.27%) at 5,800 (YTD: 22.60%; 5YR: 31.2%)    
DAX up +151.28 (+1.16%) at 13,141 (YTD: 24.45%; 5YR: 30.3%)    
Nikkei 225  up +164.86 (+0.71%) at 23,300 (YTD: 16.41%; 5YR: 30.0%)    
Hang Seng up +156.90 (+0.60%) at 26,219 (YTD: 1.45%; 5YR: 9.2%)    
MSCI Emerging Markets down -0.81 (-0.08%) at 1,037 (YTD: 7.33%; 5YR: 5.2%)    
    
Selected Government Bond Yields    
US 2 Year down 0.00 at 1.57 (began the year at 2.49; 5 years ago it was 0.64)    
US 10 Year down -0.01 at 1.77 (began the year at 2.68; 5 years ago it was 2.31)    
UK 10 Year up +0.07 at 0.74 (began the year at 1.28; 5 years ago it was 2.02)    
Germany 10 Year down -0.01 at -0.33 (began the year at 0.24; 5 years ago it was 0.78)    
France 10 Year down -0.01 at -0.02 (began the year at 0.70; 5 years ago it was 1.03)    
Italy 10 Year up +0.00 at 1.29 (began the year at 2.74; 5 years ago it was 1.98)    
Japan 10 Year up +0.02 at -0.03 (began the year at -0.01; 5 years ago it was 0.42)    
Barclays EM Basket down -0.02 at 4.21 (began the year at 6.22; 5 years ago it was 5.23)
    
Selected Currencies    
$ weakened -0.0006 versus € (-0.05%) at 1.1084 ($: YTD: 3.21%; 5YR: 9.8%)    
€ weakened -0.0037 versus £ (+0.31%) at 1.1855 (€: YTD: -6.12%; 5YR: 7.0%)    
$ weakened -0.0048 versus £ (-0.37%) at 1.3139 ($: YTD: -3.08%; 5YR: 15.7%)    
¥ unchanged 0.0000 versus $ (0.00%) at 108.8600 (¥: YTD: -0.73%; 5YR: 11.6%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.08 (-0.13%) at 62.78 (YTD: 18.07%; 5YR: -8.0%)    
WTI Crude ($/bbl) up +2.33 (+4.15%) at 58.43 (YTD: 28.67%; 5YR: -12.5%)    
Gold ($/ozt) up +1.78 (+0.12%) at 1476.40 (YTD: 15.12%; 5YR: 23.8%)    
Copper ($/mt) up +70.00 (+1.20%) at 5885.00 (YTD: -1.34%; 5YR: -9.0%)    
    
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