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24 January 2020

24/01/2020

Market Data and Morning Chat

Morning Chat

WHO helped US equities post a gain: In the absence of trade talks driving the market, US & global equities have caught a cold over the spread of the Chinese coronavirus.  Moreover, the market fever over the virus has offset the decent earnings reports the tech sector names have been posting this week.  At least following a “wafer thin” gain on Wednesday, the US market pulled off the same trick again last night after recouping earlier losses thanks to the World Health Organization announcing that it was “too early to consider [the coronavirus] a public health emergency of international concern” 

Pop, pop, pop: Yes, this quarter’s earnings reports have been decent.  Last week it was the banks offering good news drive by a substantial uplift in bond trading revenues.  This week started with tech names offering good news to the market. Now, Union Pacific (+3.5%) rallied as CEO Lance Fritz said the US-China trade pact should push up 2020 volumes – that was enough to offset a slightly weak set of earnings. Intel (+5.2% aftermarket) walloped expectations with $1.30 in earnings versus the $1.05 expected.  ST Micro (+6.6%) continued to leap on the strength of yesterday’s late earnings announcement.

Whiff, Whiff, Whiff: In baseball, swinging at a pitch and missing is often called a whiff, swing and a miss, a strike.  Not all earnings releases have been hits, a few whiffed too. Here’s three. Maybe you heard the Cats movie wasn’t purr-fect. It was odd enough to significantly contribute to the near halving of Comcast’s film profits and trimming shares by 3.8%. Procter & Gamble (-0.5%) found the dollar too strong and their baby segment too weak to beat estimates. Meanwhile, Travelers (-5.1%) insured they dampened down market results as their margins were hurt by the litigious environment.

Futures are going more for pop than whiff with green gains almost completely across the board
Phoenix Group (+1.3%) rallies on 10x over-subscribed bond issue to finance ReAssure buyout
Intel (+7.8% aftermarket) as they found every cloud has a silver chip on data centre gains
Gilead (+0.8%) rose after suggesting their ebola virus treatment might help with the coronavirus
Netflix (+7.2%) has been flicking back up after there subscriber numbers were reassessed
Viewing figures for the Trump impeachment trial dropped dramatically on the second day
… while Trump postulates Pelosi delayed the trial to help Biden over Warren & Sanders in Iowa

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -3.53 (-0.25%) at 1,408 (YTD: 2.36%; 5YR: 60.2%)
MSCI AC World Equities (USD) down -16.85 (-0.17%) at 10,188 (YTD: 2.10%; 5YR: 59.7%)
Barclays Global Aggregate Bonds up +1.00 (+0.20%) at 513 (YTD: 0.35%; 5YR: 13.1%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +3.79 (+0.11%) at 3,326 (YTD: 2.93%; 5YR: 62.1%)    
NASDAQ up +18.71 (+0.20%) at 9,402 (YTD: 4.79%; 5YR: 97.6%)    
Euro STOXX 50 down -32.94 (-0.87%) at 3,737 (YTD: -0.22%; 5YR: 10.5%)    
FTSE 100 down -64.25 (-0.85%) at 7,508 (YTD: -0.46%; 5YR: 9.9%)    
CAC down -39.19 (-0.65%) at 5,972 (YTD: -0.10%; 5YR: 28.7%)    
DAX down -127.33 (-0.94%) at 13,388 (YTD: 1.05%; 5YR: 25.7%)    
Nikkei 225  up +31.74 (+0.13%) at 23,827 (YTD: 0.72%; 5YR: 36.1%)    
Hang Seng up +40.52 (+0.15%) at 27,950 (YTD: -0.85%; 5YR: 12.5%)    
MSCI Emerging Markets down -11.21 (-0.99%) at 1,122 (YTD: 0.68%; 5YR: 13.3%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.52 (began the year at 1.57; 5 years ago it was 0.49)    
US 10 Year up +0.01 at 1.74 (began the year at 1.92; 5 years ago it was 1.80)    
UK 10 Year down -0.04 at 0.59 (began the year at 0.82; 5 years ago it was 1.48)    
Germany 10 Year up +0.02 at -0.29 (began the year at -0.19; 5 years ago it was 0.36)    
France 10 Year up +0.02 at -0.04 (began the year at 0.12; 5 years ago it was 0.54)    
Italy 10 Year up +0.02 at 1.27 (began the year at 1.41; 5 years ago it was 1.52)    
Japan 10 Year down 0.00 at -0.03 (began the year at -0.02; 5 years ago it was 0.23)    
Barclays EM Basket down -0.05 at 4.09 (began the year at 4.27; 5 years ago it was 4.98)
    
Selected Currencies    
$ strengthened +0.0005 versus € (+0.05%) at 1.1046 ($: YTD: 1.63%; 5YR: 1.9%)    
€ weakened -0.0015 versus £ (+0.13%) at 1.1876 (€: YTD: -0.53%; 5YR: 12.4%)    
$ weakened -0.0008 versus £ (-0.06%) at 1.3118 ($: YTD: 1.09%; 5YR: 12.7%)    
¥ weakened -0.1800 versus $ (-0.16%) at 109.5400 (¥: YTD: 0.88%; 5YR: 7.6%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.31 (+0.50%) at 61.90 (YTD: -6.81%; 5YR: 34.9%)    
WTI Crude ($/bbl) down -1.14 (-2.01%) at 55.50 (YTD: -9.11%; 5YR: 22.7%)    
Gold ($/ozt) down -7.58 (-0.48%) at 1559.76 (YTD: 2.43%; 5YR: 20.9%)    
Copper ($/mt) down -119.00 (-1.95%) at 5987.00 (YTD: -3.03%; 5YR: 8.5%)    

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros