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2 December 2019

02/12/2019

Market Data and Morning Chat

Morning Chat 

Cheers, drink to that: Well, we’ve finished with November, now only 23 shopping days to Christmas and 30 to the new decade! At least the month closed on a high – repeatedly. US equity indices attained new highs over and over on the way to a 3¼% monthly gain and over 26% for the year.  Meanwhile, in Europe, major equity markets were up around 2½% – certainly worth toasting. The continued Brexit situation and brewing election battle, limited the UK to ½% or so, but still a gain. Japan also grabbed a cool ¾% rise, while Chinese equities stayed in the red.

Fading? The election for the Parliamentary mad house continues.  Last week saw the complicated YouGov MRP poll telling Boris “you da one”, looking at the second largest Tory majority since World War II. Yet YouGov’s poll uses slightly dated data, and the question existing now is – have the numbers moved? In many polls since, the Conservative lead has closed by 2 to 4% with one 7% tighter leaving some numb with worry over a Corbyn victory. Yet others haven’t moved at all.  Average the polls since the MRP gives a 9.7% lead and – based on ElectoralCalculus.co.uk’s model – a 42-seat majority.

What Now? There’s still 10 days to the UK election, and the tragic London Bridge attack may have an effect.  There’s still 13 days until new US tariffs against China are due to be applied, possibly adding impetus to striking a deal – though the new Congressional law supporting Hong Kong may hamper negotiations. Then the opening days of December are packed with data points worthy of consideration. Right now we’ll get the final Markit manufacturing numbers with services on Wednesday. Thursday, the third estimate of Eurozone Q3 GDP, then if you’re willing to wait to Friday, the US jobs report.

Equity futures are up about ¼% on a better-than-expected Chinese manufacturing PMI score
Germany’s government coalition under threat as SPD partner lurches leftward with new leaders
Easyjet (-1.3%) may land in the FTSE 100 with Hiscox (+0.2%) losing its claim in index reshuffle
Fresnillo (+1.2%) polishes its silver output to reveal a little less lustre in 2020, lowering guidance 

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -6.79 (-0.50%) at 1,339 (YTD: 23.57%; 5YR: 53.0%)
MSCI AC World Equities (USD) down -38.89 (-0.40%) at 9,685 (YTD: 24.62%; 5YR: 49.7%)
Barclays Global Aggregate Bonds up +0.24 (+0.05%) at 509 (YTD: 6.22%; 5YR: 11.2%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -12.65 (-0.40%) at 3,141 (YTD: 25.30%; 5YR: 52.0%)    
NASDAQ down -39.70 (-0.46%) at 8,665 (YTD: 30.60%; 5YR: 82.2%)    
Euro STOXX 50 down -0.90 (-0.02%) at 3,704 (YTD: 23.39%; 5YR: 14.4%)    
FTSE 100 down -69.90 (-0.94%) at 7,347 (YTD: 9.19%; 5YR: 9.0%)    
CAC down -7.55 (-0.13%) at 5,905 (YTD: 24.83%; 5YR: 34.6%)    
DAX down -9.20 (-0.07%) at 13,236 (YTD: 25.36%; 5YR: 33.2%)    
Nikkei 225  up +235.59 (+1.01%) at 23,530 (YTD: 17.56%; 5YR: 33.2%)    
Hang Seng up +118.47 (+0.45%) at 26,465 (YTD: 2.40%; 5YR: 11.9%)    
MSCI Emerging Markets down -10.35 (-0.99%) at 1,040 (YTD: 7.69%; 5YR: 5.6%)    
    
Selected Government Bond Yields    
US 2 Year up +0.02 at 1.63 (began the year at 2.49; 5 years ago it was 0.54)    
US 10 Year up +0.04 at 1.82 (began the year at 2.68; 5 years ago it was 2.29)    
UK 10 Year up +0.02 at 0.70 (began the year at 1.28; 5 years ago it was 1.97)    
Germany 10 Year up +0.04 at -0.32 (began the year at 0.24; 5 years ago it was 0.74)    
France 10 Year up +0.04 at -0.01 (began the year at 0.70; 5 years ago it was 1.01)    
Italy 10 Year up +0.05 at 1.28 (began the year at 2.74; 5 years ago it was 2.01)    
Japan 10 Year down -0.01 at -0.09 (began the year at -0.01; 5 years ago it was 0.42)    
Barclays EM Basket up +0.01 at 5.52 (began the year at 6.22; 5 years ago it was 5.11)
    
Selected Currencies    
$ weakened -0.0006 versus € (-0.05%) at 1.1022 ($: YTD: 3.75%; 5YR: 11.0%)    
€ strengthened +0.0020 versus £ (-0.17%) at 1.1719 (€: YTD: -5.03%; 5YR: 7.7%)    
$ strengthened +0.0016 versus £ (+0.12%) at 1.2916 ($: YTD: -1.33%; 5YR: 17.4%)    
¥ weakened -0.1700 versus $ (-0.16%) at 109.5700 (¥: YTD: -0.08%; 5YR: 8.8%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.32 (-0.52%) at 61.02 (YTD: 14.76%; 5YR: -13.6%)    
WTI Crude ($/bbl) down -2.94 (-5.06%) at 55.17 (YTD: 21.49%; 5YR: -16.6%)    
Gold ($/ozt) down -4.12 (-0.28%) at 1459.83 (YTD: 13.83%; 5YR: 21.8%)    
Copper ($/mt) down -28.00 (-0.48%) at 5864.00 (YTD: -1.69%; 5YR: -7.7%)    
    
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