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17 January 2020

17/01/2020

Market Data and Morning Chat

Morning Chat 

Price Tag: European and US shares rose following the signing of the US-China trade deal on Wednesday.  Initially, yesterday, market futures showed tepid enthusiasm, but coupled with the ongoing solid start to the US earnings season – over three-quarters of companies have reported better-than-expected earnings – the mood picked up.  OK, maybe not for the UK and Germany (moderately down and flat respectively) but Europe rallied overall.  The trend continued in the US as the S&P broke 3300 for the first time. Now we need a bit of earnings support and catch-up to cover the slightly expensive price tags shares are showing.

Bank, Bank, one of ‘em zoomed: The last major US banks reported yesterday and proved to be polar opposites. Morgan Stanley (+6.6%) took pages from the books of JP Morgan, Citibank and Goldmans with much-improved numbers on their bond trading operations that were a third higher than estimated.  Wealth management revenues rose 11% and investment management nearly doubled the year before. Bank of New York Mellon (-7.8%) also swung their bat, but despite a 19.2% rise in revenues and significant improvement in net income, investors said wait a minute, Fed rate cuts are hurting and disappointingly interest revenue’s down 8%.   

Woman with the bag: Nancy Pelosi, Democrat leader of the US House of Representatives, and her colleagues voted to send the articles of impeachment to the Senate. House Clerk Cheryl Johnson and the sergeant-at-arms, accompanied by the seven newly-sworn impeachment managers led by Adam Schiff, delivered the two articles to the Senate at midday, yesterday, which were duly accepted. Chief Justice Roberts was then sworn in as judge, and the 100 senators swore an oath to be impartial. The impeachment process now starts in the Senate in earnest with the trial scheduled to open at 1pm Eastern Tuesday next week. 

Index futures a good shade of green as Chinese industrial production up 6.9% & Retail sales 8%
UK equities led lower yesterday on weak earnings from Pearson (-8.9%) and Whitbread (-5.2%)
… but AB Foods (4.2%) up as their expanded retail footprint helped clothe a 4.5% sales rise.
Peugeot (-0.2%), Vauxhall’s owner, saw sales decline 10% as Asian volumes took a wrong turn
and then there were four. Alphabet (Google) becomes the fourth listed trillion dollar company 
Mikhail Mishustin confirmed as Russia’s new PM as Putin continues plans to extend his rule  

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +7.90 (+0.56%) at 1,409 (YTD: 2.45%; 5YR: 64.6%)
MSCI AC World Equities (USD) up +60.24 (+0.59%) at 10,187 (YTD: 2.09%; 5YR: 62.8%)
Barclays Global Aggregate Bonds down -0.25 (-0.05%) at 512 (YTD: -0.01%; 5YR: 12.0%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +27.52 (+0.84%) at 3,317 (YTD: 2.66%; 5YR: 64.2%)    
NASDAQ up +98.44 (+1.06%) at 9,357 (YTD: 4.29%; 5YR: 101.9%)    
Euro STOXX 50 up +5.18 (+0.14%) at 3,774 (YTD: 0.77%; 5YR: 17.9%)    
FTSE 100 down -32.99 (-0.43%) at 7,610 (YTD: 0.89%; 5YR: 16.2%)    
CAC up +6.42 (+0.11%) at 6,039 (YTD: 1.02%; 5YR: 37.9%)    
DAX down -2.87 (-0.02%) at 13,429 (YTD: 1.36%; 5YR: 32.1%)    
Nikkei 225  up +108.13 (+0.45%) at 24,041 (YTD: 1.63%; 5YR: 42.6%)    
Hang Seng up +76.69 (+0.27%) at 28,960 (YTD: 2.73%; 5YR: 20.1%)    
MSCI Emerging Markets up +2.64 (+0.23%) at 1,141 (YTD: 2.33%; 5YR: 19.1%)    
    
Selected Government Bond Yields    
US 2 Year down -0.01 at 1.56 (began the year at 1.57; 5 years ago it was 0.48)    
US 10 Year up +0.02 at 1.83 (began the year at 1.92; 5 years ago it was 1.84)    
UK 10 Year down -0.01 at 0.64 (began the year at 0.82; 5 years ago it was 1.53)    
Germany 10 Year up +0.03 at -0.19 (began the year at -0.19; 5 years ago it was 0.45)    
France 10 Year up +0.02 at 0.06 (began the year at 0.12; 5 years ago it was 0.63)    
Italy 10 Year down -0.02 at 1.41 (began the year at 1.41; 5 years ago it was 1.66)    
Japan 10 Year down -0.01 at 0.00 (began the year at -0.02; 5 years ago it was 0.24)    
Barclays EM Basket down -0.01 at 4.17 (began the year at 4.27; 5 years ago it was 5.08)
    
Selected Currencies    
$ weakened -0.0004 versus € (-0.04%) at 1.1139 ($: YTD: 0.80%; 5YR: 3.5%)    
€ weakened -0.0002 versus £ (+0.02%) at 1.1744 (€: YTD: 0.59%; 5YR: 11.7%)    
$ weakened -0.0008 versus £ (-0.06%) at 1.3082 ($: YTD: 1.36%; 5YR: 13.6%)    
¥ weakened -0.0500 versus $ (-0.05%) at 110.2000 (¥: YTD: 1.47%; 5YR: 6.7%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.11 (+0.17%) at 64.93 (YTD: -2.24%; 5YR: 36.2%)    
WTI Crude ($/bbl) up +0.71 (+1.23%) at 58.52 (YTD: -4.16%; 5YR: 20.2%)    
Gold ($/ozt) up +3.42 (+0.22%) at 1555.01 (YTD: 2.11%; 5YR: 21.8%)    
Copper ($/mt) down -9.50 (-0.15%) at 6277.50 (YTD: 1.68%; 5YR: 9.8%)    

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros