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13 December 2019

13/12/2019

Market Data and Morning Chat

Morning Chat 

One Vision: One man, one goal, one Brexit vision, but maybe not just one sore loser as Corbyn’s Labour is slaughtered and Jo Swinton lost her seat. 650 races, one hope, one real decision. Or so the exit poll and early results indicated.  The 10pm exit poll predicted an 86-seat majority and it’s looking like 78 seats officially. Sterling quickly leapt 2.0% and is now up 2.4%. The Queen will ask Boris to form a government and give her visions of one sweet union and a glimpse of hope and unity – maybe. There’s still the trade deal to sort out.

Speaking of trade deals: There are reports the US and China have reached a trade-deal-in-principal which could be signed by US trade negotiator Robert Lighthizer and China’s US ambassador Cui Tiankai sometime today – Trump’s given his approval .  It’s only a framework deal needing detail refinement (bar that pending tariffs will be dropped and others slashed by half), but it appears to be moving to the next stage.  Some – such as Senator Marco Rubio – are concerned the deal gives too much for too little on subsidies, technology transfers and market access but Investors appear happy with indices rising about ¾%.

And there were other results: Over in the States, as well as companies like Advanced Micro Devices (+7.9%) and Western Digital (+5.2%) reacting to trade news there were others publishing results afterhours. Adobe (+2.9%) – maker of Photoshop software – provided some snappy numbers as they beat earnings and revenue forecasts. Broadcom (+2.5% by the close, -1.5% aftermarket) chipped in with decent numbers and that they were passing through the trough in the semiconductor market. Oracle (-2.6%) lost ground on weak revenue and not seeing off enough of the growing cloud competition. Some winners, some losers – just like the nights other results.

Futures are loving the results, with European indices up 1¼% - the UK though only slightly
UK Gilt yields expected to rise on the strong election results and growing Brexit clarity
UK domestic economy-focussed stocks and nationalisation targets likely to rally 
US House Democrats have moved forward with articles of impeachment of Donald Trump
One issue yesterday that wasn’t working – US initial jobless claims were higher than expected 
So Friday the 13th would seem to be lucky for some, less so for others!

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +8.94 (+0.67%) at 1,348 (YTD: 24.42%; 5YR: 59.6%)
MSCI AC World Equities (USD) up +61.59 (+0.63%) at 9,763 (YTD: 25.62%; 5YR: 56.3%)
Barclays Global Aggregate Bonds down -1.54 (-0.30%) at 509 (YTD: 6.19%; 5YR: 10.5%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +26.94 (+0.86%) at 3,169 (YTD: 26.40%; 5YR: 58.2%)    
NASDAQ up +63.27 (+0.73%) at 8,717 (YTD: 31.38%; 5YR: 87.3%)    
Euro STOXX 50 up +18.90 (+0.51%) at 3,706 (YTD: 23.49%; 5YR: 20.8%)    
FTSE 100 up +57.22 (+0.79%) at 7,273 (YTD: 8.11%; 5YR: 15.4%)    
CAC up +23.38 (+0.40%) at 5,884 (YTD: 24.38%; 5YR: 43.2%)    
DAX up +74.90 (+0.57%) at 13,222 (YTD: 25.22%; 5YR: 37.8%)    
Nikkei 225  up +598.29 (+2.55%) at 24,023 (YTD: 20.03%; 5YR: 38.3%)    
Hang Seng up +603.46 (+2.24%) at 27,598 (YTD: 6.78%; 5YR: 18.7%)    
MSCI Emerging Markets up +12.48 (+1.18%) at 1,071 (YTD: 10.86%; 5YR: 14.1%)    
    
Selected Government Bond Yields    
US 2 Year up +0.00 at 1.66 (began the year at 2.49; 5 years ago it was 0.54)    
US 10 Year up +0.01 at 1.91 (began the year at 2.68; 5 years ago it was 2.08)    
UK 10 Year up +0.05 at 0.82 (began the year at 1.28; 5 years ago it was 1.80)    
Germany 10 Year up +0.04 at -0.23 (began the year at 0.24; 5 years ago it was 0.62)    
France 10 Year up +0.03 at 0.07 (began the year at 0.70; 5 years ago it was 0.90)    
Italy 10 Year up +0.11 at 1.34 (began the year at 2.74; 5 years ago it was 2.06)    
Japan 10 Year down 0.00 at -0.03 (began the year at -0.01; 5 years ago it was 0.39)    
Barclays EM Basket up +0.00 at 4.21 (began the year at 6.22; 5 years ago it was 5.31)
    
Selected Currencies    
$ weakened -0.0055 versus € (-0.50%) at 1.1165 ($: YTD: 2.51%; 5YR: 10.4%)    
€ weakened -0.0220 versus £ (+1.83%) at 1.2018 (€: YTD: -7.39%; 5YR: 5.0%)    
$ weakened -0.0309 versus £ (-2.36%) at 1.3418 ($: YTD: -5.27%; 5YR: 14.6%)    
¥ weakened -0.3400 versus $ (-0.31%) at 109.6100 (¥: YTD: -0.05%; 5YR: 8.0%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.05 (+0.08%) at 66.33 (YTD: 24.75%; 5YR: 8.6%)    
WTI Crude ($/bbl) up +0.42 (+0.71%) at 59.18 (YTD: 30.32%; 5YR: 2.4%)    
Gold ($/ozt) down -0.31 (-0.02%) at 1469.50 (YTD: 14.59%; 5YR: 20.2%)    
Copper ($/mt) unchanged 0.00 (0.00%) at 6156.00 (YTD: 3.20%; 5YR: -5.1%)    
    
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