!css

20 November 2019

20/11/2019

Market Data and Morning Chat

Morning Chat 

Somewhat of a US-China Tirade deal: Pessimism on the Chinese side and now US President Trump has added “if we don’t make a deal with China, I’ll just raise tariffs even higher”.  That kind of talk usually sends ripples through the markets disrupting equities and pushing bond yields lower. OK, UK and US bond yields were lower, but a couple hundredths of a percent doesn’t really move the dial. Meanwhile US equities were pretty calm – the Dow might have slipped, but the Nasdaq rallied and the S&P held firm.  Maybe investors are becoming inured to the constant to and fro (but see below).

A bit of drive: The German economy has been suffering in part because of the tired auto sales triggered by diesel-gate. Globally, auto sales have struggled to get in gear with registrations in the likes of the US, the UK and Japan in reverse.  Thus any indications of improvement are welcome, and yesterday provided a strong one. EU new car registrations in October were 8.7% higher than last year and the best October since 2009. While sales fell 6.7% in the UK, they were motoring across the other major European economies, led by a 30.8% gain in sales by VW. 

Maybe not as pure, but still golden:  Disgruntled US-China trade talks, Brexit disarray and a summer of softer economics helped Gold to a 24-carat run from $1270 at the end of May to $1551 in early September, a 22% gain, having passed $1500 about a month earlier.  Gold then plateaued around $1500 for nearly three months until giving ground early-November.  When you consider the optimism around trade, Brexit and the economics, it’s not surprising. Yet, with the renewed tough tone on trade and increased impeachment noise, gold’s recovered some lost lustre and with it some of the reason hold it. 

Market futures fall after US Senate unanimously passed a bill backing Hong Kong protests…
… as China’s irritation over the bill will likely make concluding a trade deal more complex
A quick YouGov poll after last night’s debate between Johnson & Corbyn shows a close draw
The CBI’s measure of factory orders, while still very weak, improves more than expected 
Halma (+8.5%), a top-performer of 2019, safely raises no alarms with strong earnings report 
Easyjet (+5.3%) shares fly higher as the airline moves to offset carbon emissions on all flights

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +0.73 (+0.05%) at 1,334 (YTD: 23.14%; 5YR: 54.0%)
MSCI AC World Equities (USD) down -3.33 (-0.03%) at 9,648 (YTD: 24.14%; 5YR: 50.1%)
Barclays Global Aggregate Bonds up +0.27 (+0.05%) at 509 (YTD: 6.35%; 5YR: 11.3%)
    
Selected Equity Indices (Capital returns)    

S&P 500 down -1.85 (-0.06%) at 3,120 (YTD: 24.47%; 5YR: 52.0%)    
NASDAQ up +20.72 (+0.24%) at 8,571 (YTD: 29.17%; 5YR: 82.3%)    
Euro STOXX 50 down -8.36 (-0.23%) at 3,697 (YTD: 23.16%; 5YR: 19.2%)    
FTSE 100 up +16.10 (+0.22%) at 7,324 (YTD: 8.85%; 5YR: 9.7%)    
CAC down -20.74 (-0.35%) at 5,909 (YTD: 24.91%; 5YR: 39.6%)    
DAX up +14.11 (+0.11%) at 13,221 (YTD: 25.21%; 5YR: 39.4%)    
Nikkei 225  down -144.08 (-0.62%) at 23,149 (YTD: 15.66%; 5YR: 33.8%)    
Hang Seng down -177.28 (-0.65%) at 26,917 (YTD: 4.14%; 5YR: 15.3%)    
MSCI Emerging Markets up +5.04 (+0.48%) at 1,057 (YTD: 9.46%; 5YR: 6.8%)    
    
Selected Government Bond Yields    
US 2 Year down -0.03 at 1.57 (began the year at 2.49; 5 years ago it was 0.51)    
US 10 Year down -0.05 at 1.74 (began the year at 2.68; 5 years ago it was 2.34)    
UK 10 Year down -0.02 at 0.73 (began the year at 1.28; 5 years ago it was 2.09)    
Germany 10 Year down -0.04 at -0.38 (began the year at 0.24; 5 years ago it was 0.80)    
France 10 Year down -0.04 at -0.06 (began the year at 0.70; 5 years ago it was 1.14)    
Italy 10 Year down -0.03 at 1.22 (began the year at 2.74; 5 years ago it was 2.30)    
Japan 10 Year down -0.02 at -0.11 (began the year at -0.01; 5 years ago it was 0.47)    
Barclays EM Basket down 0.00 at 5.45 (began the year at 6.22; 5 years ago it was 5.12)
    
Selected Currencies    
$ strengthened +0.0014 versus € (+0.13%) at 1.1067 ($: YTD: 3.36%; 5YR: 11.7%)    
€ weakened -0.0001 versus £ (+0.01%) at 1.1667 (€: YTD: -4.60%; 5YR: 7.2%)    
$ strengthened +0.0013 versus £ (+0.10%) at 1.2914 ($: YTD: -1.32%; 5YR: 17.7%)    
¥ strengthened +0.0900 versus $ (+0.08%) at 108.4100 (¥: YTD: -1.15%; 5YR: 8.9%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.09 (-0.15%) at 60.90 (YTD: 14.54%; 5YR: -22.5%)    
WTI Crude ($/bbl) down -1.84 (-3.23%) at 55.21 (YTD: 21.58%; 5YR: -26.0%)    
Gold ($/ozt) up +4.31 (+0.29%) at 1476.76 (YTD: 15.15%; 5YR: 23.7%)    
Copper ($/mt) up +45.00 (+0.77%) at 5875.00 (YTD: -1.51%; 5YR: -12.1%)    
    
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