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23 January 2020

23/01/2020

Market Data and Morning Chat

Morning Chat 

Nudge, Nudge: Despite the good intentions of a green field of futures yesterday, nudged up by abating Chinese coronavirus fears, nudged up by decent earnings data Tuesday and by Macron & Trump’s handshake deal to avoid tariffs, markets turned red.  By the close, European equity gains winked out with markets down around ½%. Trump started talking tough on trade stating the EU had no choice but to agree a deal to avoid tariffs. What’s he like? Oh, and Luigi Di Maio announced his resignation as Italy’s Five Star party’s leader prompting election worries and knocking Italian banks. Say no more.

Pining for the Fjords: Oil prices took a tumble with Brent and West Texas Intermediate slipping from their respective $63½ and $58 perches and sliding back down below December’s opening levels.  The price gains over the elimination of Iran general Qasen Solemani for now, have ceased to be. Instead, oil prices have weakened over concerns of over-supply as the US Energy Information Administration forecast another US production increase for February, a huge new North Sea field has expanded Norway’s production to a 9-year high which won’t leave Norwegians blue, and the Libyan production shutdown looks to only have been stunned.

And finally, monsieur, a wafer-thin gain: By the close US equities managed to post a gain, though only a tiny little thin one. Yet it was a more varied day than that, expanding and blowing up with many individual names moving on results. After Tuesday’s gain, Netflix swapped programmes dropping 3.6% as investors focused on their guidance. Beyond Meat moved more with yesterday’s 6.6% drop taking a big bite out of Tuesday’s 18.4% gain. Apple, though, saw an appealing rise to an all-time high, while IBM shook off its albatross leading tech companies with a 3.4% gain on Tuesday’s results.

Futures are suffering just a flesh wound in showing a modest decline; The UK is getting better.
China prohibits travel from Wuhan to achieve holy grail of eliminating the coronavirus threat
Abbott Labs (+2.4%) improved results beating expectations the right medicine to boost shares
J&J (-0.7%) shares have a negative reaction to only in-line results, though growth is healthy
Blue-chip Texas Instruments’ (+1.9%) results look like marking the bottom of shipment cycle 
ASML (-0.4%) beats on earnings results and focuses buyback at a higher rate than expected
ST Micro (+1.1%) reports revenues higher than highest estimate driven by auto sector sales 

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +1.60 (+0.11%) at 1,411 (YTD: 2.62%; 5YR: 60.6%)
MSCI AC World Equities (USD) up +4.19 (+0.04%) at 10,205 (YTD: 2.27%; 5YR: 60.0%)
Barclays Global Aggregate Bonds up +0.14 (+0.03%) at 512 (YTD: 0.16%; 5YR: 12.8%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +0.96 (+0.03%) at 3,322 (YTD: 2.82%; 5YR: 61.9%)    
NASDAQ up +12.96 (+0.14%) at 9,384 (YTD: 4.58%; 5YR: 97.2%)    
Euro STOXX 50 down -19.33 (-0.51%) at 3,770 (YTD: 0.66%; 5YR: 11.4%)    
FTSE 100 down -38.78 (-0.51%) at 7,572 (YTD: 0.39%; 5YR: 10.8%)    
CAC down -35.01 (-0.58%) at 6,011 (YTD: 0.55%; 5YR: 29.5%)    
DAX down -40.12 (-0.30%) at 13,516 (YTD: 2.01%; 5YR: 26.9%)    
Nikkei 225  down -235.91 (-0.98%) at 23,795 (YTD: 0.59%; 5YR: 35.9%)    
Hang Seng down -556.22 (-1.96%) at 27,785 (YTD: -1.44%; 5YR: 11.8%)    
MSCI Emerging Markets up +6.55 (+0.58%) at 1,133 (YTD: 1.68%; 5YR: 14.4%)    
    
Selected Government Bond Yields    
US 2 Year down -0.01 at 1.51 (began the year at 1.57; 5 years ago it was 0.49)    
US 10 Year down -0.02 at 1.75 (began the year at 1.92; 5 years ago it was 1.80)    
UK 10 Year up +0.00 at 0.64 (began the year at 0.82; 5 years ago it was 1.48)    
Germany 10 Year down -0.01 at -0.27 (began the year at -0.19; 5 years ago it was 0.36)
France 10 Year down -0.01 at -0.02 (began the year at 0.12; 5 years ago it was 0.54)    
Italy 10 Year down -0.02 at 1.33 (began the year at 1.41; 5 years ago it was 1.52)    
Japan 10 Year down -0.01 at -0.02 (began the year at -0.02; 5 years ago it was 0.23)    
Barclays EM Basket down -0.02 at 4.14 (began the year at 4.27; 5 years ago it was 4.98)
    
Selected Currencies    
$ weakened -0.0003 versus € (-0.03%) at 1.1089 ($: YTD: 1.25%; 5YR: 1.5%)    
€ weakened -0.0004 versus £ (+0.03%) at 1.1846 (€: YTD: -0.28%; 5YR: 12.6%)    
$ weakened -0.0009 versus £ (-0.07%) at 1.3138 ($: YTD: 0.94%; 5YR: 12.5%)    
¥ strengthened +0.2700 versus $ (+0.25%) at 109.6000 (¥: YTD: 0.93%; 5YR: 7.5%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.36 (-0.58%) at 61.81 (YTD: -6.94%; 5YR: 34.7%)    
WTI Crude ($/bbl) down -1.70 (-2.91%) at 56.64 (YTD: -7.24%; 5YR: 23.2%)    
Gold ($/ozt) down -1.19 (-0.08%) at 1556.64 (YTD: 2.22%; 5YR: 20.7%)    
Copper ($/mt) down -54.00 (-0.88%) at 6106.00 (YTD: -1.10%; 5YR: 7.8%)    
    

 

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros