!css

25 November 2019

25/11/2019

Market Data and Morning Chat

Morning Chat 

That was the week that was: Over the week, the UK cooked up a modest 1/3% gain, while the other major markets were a bit of a dud, with the US off about ½%, Europe ½ to 1½% and Asia ¾ to as much as 3% for South Korea. The declines came from a frosty turn in the US-China trade negotiations as the US Congress passed a bill effectively condemning the actions of the Chinese government in Hong Kong. At least there was a bit of a rebound on Friday as the trade news turned a bit more positive again.

Not only, but also: Equities on Friday improved on the back of more than just trade talks signals. The Japanese composite PMI rose and was ever so close to being back to 50 at 49.9. Flash November Markit manufacturing PMIs for the US, France, Germany and the Eurozone were all improved and better-than-expected (alas, UK numbers were a bit underwhelming) – possibly what helped the mining and US industrial names (their PMI was a 7-month high). Moreover, the US Markit Services PMI and Michigan consumer survey both came in above expectations helping the financial and consumer discretionary names also do well. 

But is there more to be bedazzled by this week? Trade talk news will of course dazzle and drive markets more than other items.  However, there’s still much that could influence market sentiment.  The US second estimate of the Q3 GDP – it should remain 1.9% - and the Chicago PMI could help lift optimism. Today’s German consumer & business confidence surveys and Friday’s retail sales could strengthen the boost from last week’s GDP data. In at home, we’re likely to be swamped with election coverage – ours and the aftermath of Hong Kong’s – but UK consumer confidence data might prove distracting. 

Hong Kong stocks rally as pro-democracy candidates win 86% of seats on record 71% turnout
… meanwhile China announced it would raise penalties in intellectual property right theft
… which has helped the equity futures trade up as China’s move could help in trade talks
Michael Bloomberg puts his money where his mouth is declaring self-funded Democrat candidacy
LVMH’s $16billion, $135/share marriage proposal with Tiffany’s accepted by the jeweler’s board.
Italy sees another bridge collapse in Savona highlighting the issues of failing infrastructure

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +3.69 (+0.28%) at 1,329 (YTD: 22.69%; 5YR: 51.7%)
MSCI AC World Equities (USD) up +14.99 (+0.16%) at 9,604 (YTD: 23.57%; 5YR: 47.9%)
Barclays Global Aggregate Bonds down -0.67 (-0.13%) at 509 (YTD: 6.20%; 5YR: 10.7%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +6.75 (+0.22%) at 3,110 (YTD: 24.07%; 5YR: 50.5%)    
NASDAQ up +13.67 (+0.16%) at 8,520 (YTD: 28.40%; 5YR: 79.1%)    
Euro STOXX 50 up +7.66 (+0.21%) at 3,687 (YTD: 22.85%; 5YR: 14.3%)    
FTSE 100 up +88.26 (+1.22%) at 7,327 (YTD: 8.90%; 5YR: 8.8%)    
CAC up +11.92 (+0.20%) at 5,893 (YTD: 24.57%; 5YR: 34.5%)    
DAX up +26.18 (+0.20%) at 13,164 (YTD: 24.67%; 5YR: 33.5%)    
Nikkei 225  up +179.93 (+0.78%) at 23,293 (YTD: 16.38%; 5YR: 33.8%)    
Hang Seng up +412.05 (+1.55%) at 27,007 (YTD: 4.49%; 5YR: 13.3%)    
MSCI Emerging Markets up +3.97 (+0.38%) at 1,049 (YTD: 8.57%; 5YR: 3.9%)    
    
Selected Government Bond Yields    
US 2 Year up +0.00 at 1.63 (began the year at 2.49; 5 years ago it was 0.52)    
US 10 Year up +0.01 at 1.78 (began the year at 2.68; 5 years ago it was 2.26)    
UK 10 Year down -0.05 at 0.71 (began the year at 1.28; 5 years ago it was 2.01)    
#VALUE!    
#VALUE!    
#VALUE!    
#VALUE!    
Barclays EM Basket up +0.00 at 5.45 (began the year at 6.22; 5 years ago it was 5.07)
    
Selected Currencies    
$ unchanged 0.0000 versus € (0.00%) at 1.1024 ($: YTD: 3.74%; 5YR: 11.5%)    
€ weakened -0.0020 versus £ (+0.17%) at 1.1656 (€: YTD: -4.51%; 5YR: 8.2%)    
$ weakened -0.0022 versus £ (-0.17%) at 1.2850 ($: YTD: -0.82%; 5YR: 18.2%)    
¥ weakened -0.1500 versus $ (-0.14%) at 108.8300 (¥: YTD: -0.76%; 5YR: 8.4%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.17 (+0.27%) at 63.15 (YTD: 18.77%; 5YR: -17.9%)    
WTI Crude ($/bbl) down -0.83 (-1.42%) at 57.70 (YTD: 27.06%; 5YR: -24.5%)    
Gold ($/ozt) down -2.47 (-0.17%) at 1459.13 (YTD: 13.78%; 5YR: 21.5%)    
Copper ($/mt) up +26.00 (+0.45%) at 5855.00 (YTD: -1.84%; 5YR: -12.9%)    
    
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