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8 January 2020

08/01/2020

Market Data and Morning Chat

Morning Chat

 

A little less action, a little more conversation, please: Barring the S&P and Dow, the major equity markets saw green on their screens yesterday. OK, it might have been marginal – a 0.02% gain in the US, a 0.04% gain here but they’re still gains.  Elsewhere the moves were more, but nothing too exciting – at the index level – and there wasn’t a drop of news about US-China trade talks.  There was significant commentary about a reduction of the US-Iran tensions.  US troops are not leaving Iraq. There were softly, softly chastisements of the US by Europe and Iran remained fairly quiet.

 

It’s now, not never: Spain’s Pedro Sánchez won his vote – just – with only two votes in it.  Spain now has its first ruling coalition since the 1930’s and a left-wing government.  There’s some worry the roughly 2% GDP growth rate Spain enjoys without a government (countries unable to form government’s often seem to have good growth rates) could be under threat from the planned policies. Forming his coalition, Sánchez had to pledge the likes of increasing taxes on the rich, abolishing aspects of Rajoy’s labour reforms, and boosting the minimum wage. Oh, and agreeing a dialogue with the Catalonia separatists.

 

Help me make it through the Sen-night: Republicans are certainly making hay out of the Democrats condemnation of Trump’s decision to eliminate Iran’s General Soleimani, painting a picture of Democrats as too weak to take action and sympathising with the enemy.  Senate leader Mitch McConnell is also taking the opportunity to blunt the main Democrat weapon – the impeachment motion. Democrat House leader Nancy Pelosi held back sending the motion to the Senate to force an agreement on trial rules, so McConnell’s opted to define the rules of the trial unilaterally and thwart her play.  Pelosi’s move may have been trumped.

 

Iran launched missiles at US forces in Iraq apparently ineffectually – Trump’s tweeted “All is well”
Speaking of missing, German manufacturing orders fell 1.3% versus the 0.2% expected rise
… driven in part by a slump in German car production to a 23-year low… speaking of cars…
Tesla (+50.7% year-to-date) now worth $463,000 per car produced versus $6k for Ford and GM
… and while producing 1 in 5 electric cars is worth as much as Ford and GM combined.

 

Market Data

 

Selected Global Aggregates (Total returns, unhedged)   
MSCI AC World Equities (Local) up +1.24 (+0.09%) at 1,381 (YTD: 0.43%; 5YR: 59.1%)
MSCI AC World Equities (USD) down -8.13 (-0.08%) at 9,999 (YTD: 0.20%; 5YR: 58.1%)
Barclays Global Aggregate Bonds down -1.38 (-0.27%) at 512 (YTD: 0.06%; 5YR: 12.6%)

               

Selected Equity Indices (Capital returns)
&P 500 down -9.10 (-0.28%) at 3,237 (YTD: 0.20%; 5YR: 57.0%) 
NASDAQ down -2.88 (-0.03%) at 9,069 (YTD: 1.07%; 5YR: 91.5%)
Euro STOXX 50 up +6.73 (+0.18%) at 3,759 (YTD: 0.38%; 5YR: 19.9%)        
FTSE 100 down -1.49 (-0.02%) at 7,574 (YTD: 0.42%; 5YR: 15.3%)
CAC down -1.24 (-0.02%) at 6,012 (YTD: 0.57%; 5YR: 41.1%)         
DAX up +99.84 (+0.76%) at 13,227 (YTD: -0.17%; 5YR: 34.5%)       
Nikkei 225  down -370.96 (-1.57%) at 23,205 (YTD: -1.91%; 5YR: 35.2%)  
Hang Seng down -250.51 (-0.88%) at 28,072 (YTD: -0.42%; 5YR: 17.8%)   
MSCI Emerging Markets up +3.31 (+0.30%) at 1,116 (YTD: 0.11%; 5YR: 16.4%)      


Selected Government Bond Yields
US 2 Year down -0.02 at 1.52 (began the year at 1.57; 5 years ago it was 0.61)
US 10 Year down -0.03 at 1.79 (began the year at 1.92; 5 years ago it was 2.02)
UK 10 Year up +0.02 at 0.79 (began the year at 0.82; 5 years ago it was 1.65)
Germany 10 Year up +0.04 at -0.25 (began the year at -0.19; 5 years ago it was 0.51)
France 10 Year up +0.04 at 0.05 (began the year at 0.12; 5 years ago it was 0.80)
taly 10 Year down -0.07 at 1.31 (began the year at 1.41; 5 years ago it was 1.84)
Japan 10 Year down -0.01 at -0.03 (began the year at -0.02; 5 years ago it was 0.29)
Barclays EM Basket up +0.01 at 4.25 (began the year at 4.27; 5 years ago it was 5.24)

Selected Currencies
$ weakened -0.0005 versus € (-0.04%) at 1.1148 ($: YTD: 0.72%; 5YR: 5.7%)
€ weakened -0.0005 versus £ (+0.04%) at 1.1787 (€: YTD: 0.22%; 5YR: 8.6%)
$ weakened -0.0011 versus £ (-0.08%) at 1.3139 ($: YTD: 0.93%; 5YR: 13.1%)
¥ strengthened +0.1500 versus $ (+0.14%) at 108.4000 (¥: YTD: -0.17%; 5YR: 10.3%)         

Selected Commodities
Brent Crude ($/bbl) up +0.51 (+0.74%) at 68.98 (YTD: 3.85%; 5YR: 37.2%)
WTI Crude ($/bbl) down -0.57 (-0.90%) at 62.70 (YTD: 2.69%; 5YR: 28.9%)
Gold ($/ozt) up +18.02 (+1.15%) at 1589.96 (YTD: 4.41%; 5YR: 31.0%)
Copper ($/mt) up +10.50 (+0.17%) at 6149.00 (YTD: -0.40%; 5YR: 0.6%)  

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