!css

11 December 2019

11/12/2019

Market Data and Morning Chat

Morning Chat

 

The realms of probability: Domestic issues are not capturing the voters & media attention in tomorrow’s UK election, more it’s Brexit and, for many, a fear over a Corbyn/McDonnell government.  Scarred by Theresa May’s evaporating lead last time, there’s an anxiety over polls.  Last week saw YouGov’s massive MRP poll – the only poll correctly forecasting May’s lost majority – predicted the Tories romping to a 68-seat majority. Subsequently, smaller polls saw the lead slipping. So now we have last night’s second and final MRP; the Tories still lead by 9%, but Labour’s 2% gain cuts the Tory’s majority down to 28.

 

Trade-offs: Equities generally saw marginal declines over various trade items. Obviously, with falling markets, one assumes the news wasn’t good, but it wasn’t bad either, and much was promising.  Yes, President Trump waded in, wanting a near-term deal. So much for the bad news. Otherwise, there are reports the US will defer December 15’s tariff hikes, setting a better tone for trade talks. China’s Ministry of Finance noted Chinese companies increased US soybean purchases. Great. Finally, Pelosi’s Democrats and the White House agreed terms for the North American USMCA trade deal with Mexico, Canada and the US quickly ratifying it.

 

Left on pause: There was a broad range of UK economic data releases yesterday, balance of trade, plus output, production & orders and monthly GDP data. Given the numbers, it appears someone pressed pause while the country decided on the election and consequentially Brexit.  Trade saw a slowdown and wider balance. Industrial and manufacturing production growth was anemic – but was still growth – while housebuilding saw a notable drop hitting construction output and trimming construction orders by 6.8%. As for GDP? It came in at 0.0% for both the month and the rolling quarter – the slowest three months in ten years.

 

Asia marginally up and futures fairly level in anticipation of Fed meeting and trade news
Palladium converted lower South African output over power cuts into a near-$1,900 price level
German economic sentiment index leapt substantially into positive territory to 20-month high
US Labour productivity fell by 0.2% in Q3 as output gains came through working longer hours
Despite agreeing USMCA, the Democrats issue articles of impeachment on Trump
We reach one deadline today as the Federal Open Market Committee issue their rate decision

 

Market Data

 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -1.82 (-0.14%) at 1,336 (YTD: 23.27%; 5YR: 55.8%)
MSCI AC World Equities (USD) down -11.98 (-0.12%) at 9,679 (YTD: 24.54%; 5YR: 52.7%)
Barclays Global Aggregate Bonds up +0.23 (+0.05%) at 509 (YTD: 6.36%; 5YR: 11.3%)

 

Selected Equity Indices (Capital returns)
S&P 500 down -3.44 (-0.11%) at 3,133 (YTD: 24.96%; 5YR: 53.9%)
NASDAQ down -5.64 (-0.07%) at 8,616 (YTD: 29.85%; 5YR: 83.0%)
Euro STOXX 50 down -0.40 (-0.01%) at 3,672 (YTD: 22.33%; 5YR: 16.2%)
FTSE 100 down -20.14 (-0.28%) at 7,214 (YTD: 7.22%; 5YR: 11.6%)
CAC up +10.78 (+0.18%) at 5,848 (YTD: 23.62%; 5YR: 38.4%)
DAX down -34.89 (-0.27%) at 13,071 (YTD: 23.79%; 5YR: 32.5%)
Nikkei 225  down -18.33 (-0.08%) at 23,392 (YTD: 16.87%; 5YR: 35.5%)
Hang Seng up +215.35 (+0.81%) at 26,652 (YTD: 3.12%; 5YR: 14.3%)
MSCI Emerging Markets down -1.61 (-0.15%) at 1,050 (YTD: 8.67%; 5YR: 10.9%)

Selected Government Bond Yields
US 2 Year down -0.01 at 1.64 (began the year at 2.49; 5 years ago it was 0.60)
US 10 Year down -0.01 at 1.83 (began the year at 2.68; 5 years ago it was 2.16)
UK 10 Year up +0.04 at 0.80 (began the year at 1.28; 5 years ago it was 1.91)
Germany 10 Year down -0.01 at -0.31 (began the year at 0.24; 5 years ago it was 0.68)
France 10 Year down -0.01 at 0.00 (began the year at 0.70; 5 years ago it was 0.95)
Italy 10 Year up +0.01 at 1.25 (began the year at 2.74; 5 years ago it was 2.05)
Japan 10 Year up +0.02 at -0.01 (began the year at -0.01; 5 years ago it was 0.41)
Barclays EM Basket down 0.00 at 4.22 (began the year at 6.22; 5 years ago it was 5.30)

Selected Currencies
$ strengthened +0.0001 versus € (+0.01%) at 1.1086 ($: YTD: 3.20%; 5YR: 10.5%)
€ strengthened +0.0052 versus £ (-0.44%) at 1.1840 (€: YTD: -6.00%; 5YR: 7.1%)
$ strengthened +0.0057 versus £ (+0.43%) at 1.3126 ($: YTD: -2.98%; 5YR: 16.4%)
¥ strengthened +0.0200 versus $ (+0.02%) at 108.7200 (¥: YTD: -0.86%; 5YR: 9.8%)

 

 

 

Selected Commodities
Brent Crude ($/bbl) down -0.23 (-0.35%) at 65.06 (YTD: 22.36%; 5YR: 3.6%)
WTI Crude ($/bbl) up +0.22 (+0.37%) at 59.24 (YTD: 30.46%; 5YR: -2.8%)
Gold ($/ozt) up +0.35 (+0.02%) at 1464.71 (YTD: 14.21%; 5YR: 19.3%)
Copper ($/mt) up +25.00 (+0.41%) at 6100.00 (YTD: 2.26%; 5YR: -4.9%)

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