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6 December 2019

06/12/2019

Market Data and Morning Chat

Morning Chat 

Continental drift: European major market equities – bar France’s – closed ¼ to ¾% lower with pan-European indices marginally down. Trade talk sentiment probably gave some investors their 19th nervous breakdown despite little fresh news to work with.  There were however a number of less-noted economic releases that likely engendered mixed emotions. Both German factory orders and Spanish industrial production were both pretty beat up falling more than expected. There were mixed emotions over French retail sales up 0.1% from last month’s notable 1.5% decline but lower than forecast. Yet, surprise, surprise, the German construction PMI was up, solidly ahead of expectations. 

Hold back: OPEC kicked off their winter meeting and while too early for a formal resolution, it appears Saudi Arabia is telling assembled members you gotta move on production. Iran’s oil minister hinted a deal was reached – sounds familiar – with the anticipation OPEC will flip the switch on a further 500,000 barrel a day cut – more than originally expected. Ah, so with that cut it must be good times for oil prices you might think, but the market’s reaction was muted, with Brent crude up only 0.4% and West Texas Intermediate actually down 0.1% thanks to the effect of over-production

You can't always get what you want: But if you try sometimes you just might find you get what you need – at least the US House Democrats hope so. The House Judiciary Committee heard testimony from four legal academics interpreting the Constitutional impeachment criteria.  Amazingly, the three Democrat-selected scholars unequivocally concluded President Trump’s dealings with Ukraine reached the standard for impeachment. Meanwhile, the Republican-selected scholar – who stated he voted against Trump – was not as forceful in opposition, but still found the proceedings failed to satisfy the standard and created a dangerous precedent for the future. Satisfaction for some, maybe.

Positive trade noises mean Friday is off to a good start with Asia and equity futures up 
France comes to a halt as union workers take to the streets to protest Macron’s pension reforms
Aramco IPO launches successfully valuing the company as a whole at $1.7trillion
Glencore (-9.0%) has an ore-ful day on confirming their investigation by the Serious Fraud Office
DS Smith (-7.2%) boxed about by lower-than-expected volumes and prices for paper cut
Not all bad news though, Dunelm (+19.6%) furnishes great profits off strong website sales

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +2.31 (+0.17%) at 1,329 (YTD: 22.66%; 5YR: 51.1%)
MSCI AC World Equities (USD) up +15.03 (+0.16%) at 9,631 (YTD: 23.92%; 5YR: 48.6%)
Barclays Global Aggregate Bonds down -0.16 (-0.03%) at 509 (YTD: 6.37%; 5YR: 12.1%)
    
Selected Equity Indices (Capital returns)    

S&P 500 up +4.67 (+0.15%) at 3,117 (YTD: 24.36%; 5YR: 50.2%)    
NASDAQ up +4.03 (+0.05%) at 8,571 (YTD: 29.17%; 5YR: 79.3%)    
Euro STOXX 50 down -11.89 (-0.32%) at 3,648 (YTD: 21.55%; 5YR: 11.3%)    
FTSE 100 down -50.65 (-0.70%) at 7,138 (YTD: 6.09%; 5YR: 5.9%)    
CAC up +1.87 (+0.03%) at 5,802 (YTD: 22.64%; 5YR: 31.3%)    
DAX down -85.77 (-0.65%) at 13,055 (YTD: 23.64%; 5YR: 29.4%)    
Nikkei 225  up +54.31 (+0.23%) at 23,354 (YTD: 16.69%; 5YR: 30.3%)    
Hang Seng up +287.59 (+1.10%) at 26,505 (YTD: 2.55%; 5YR: 10.4%)    
MSCI Emerging Markets up +6.28 (+0.61%) at 1,043 (YTD: 7.98%; 5YR: 5.8%)    
    
Selected Government Bond Yields    
US 2 Year up +0.00 at 1.59 (began the year at 2.49; 5 years ago it was 0.64)    
US 10 Year down -0.01 at 1.80 (began the year at 2.68; 5 years ago it was 2.31)    
UK 10 Year up +0.03 at 0.77 (began the year at 1.28; 5 years ago it was 2.02)    
Germany 10 Year up +0.00 at -0.29 (began the year at 0.24; 5 years ago it was 0.78)    
France 10 Year up +0.00 at 0.02 (began the year at 0.70; 5 years ago it was 1.03)    
Italy 10 Year up +0.00 at 1.37 (began the year at 2.74; 5 years ago it was 1.98)    
Japan 10 Year up +0.02 at -0.02 (began the year at -0.01; 5 years ago it was 0.42)    
Barclays EM Basket up +0.02 at 4.24 (began the year at 6.22; 5 years ago it was 5.23)
    
Selected Currencies    
$ strengthened +0.0002 versus € (+0.02%) at 1.1103 ($: YTD: 3.05%; 5YR: 9.7%)    
€ strengthened +0.0007 versus £ (-0.06%) at 1.1841 (€: YTD: -6.00%; 5YR: 7.1%)    
$ strengthened +0.0012 versus £ (+0.09%) at 1.3146 ($: YTD: -3.14%; 5YR: 15.7%)    
¥ strengthened +0.0200 versus $ (+0.02%) at 108.6700 (¥: YTD: -0.91%; 5YR: 11.8%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.03 (-0.05%) at 64.14 (YTD: 20.63%; 5YR: -6.0%)    
WTI Crude ($/bbl) unchanged 0.00 (0.00%) at 58.43 (YTD: 28.67%; 5YR: -11.3%)    
Gold ($/ozt) down -3.00 (-0.20%) at 1473.05 (YTD: 14.86%; 5YR: 23.5%)    
Copper ($/mt) up +3.00 (+0.05%) at 5888.00 (YTD: -1.29%; 5YR: -8.7%)    
    
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