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26 November 2019

26/11/2019

Market Data and Morning Chat

Morning Chat 

Manifesto destiny: All three major UK parties have released their election manifestos with little to surprise.  Conservatives opted for a light-weight 59 pages to outline plans including holding taxes firm and modestly increase in spending.  Lib-Dems a more taxing programme including the elimination of the capita gains tax allowance.  Labour’s tome nearly doubles the Tories at 107 pages of increased taxes, nationalisation plans and give-aways for all. Early polling apparently gives Labour a slight nod on their policies with the last three polls of ICM, Deltapoll and Survation trimming the Tory lead by 2-3%, though still enough for a majority

Germane to the Dax: Germany’s Dax posted a reasonable 0.7% gain yesterday for a year-to-date gain over 28%. Meanwhile, the 10-year yield, while still in negative territory at -0.35%, is now halfway back to positive from the early-September 0.70% low.  The improving outlook on the US-China trade talks has helped, but the news in Germany has been improving too. Recession was avoided with Q3 growth of +0.1%. Yesterday, the November Ifo business climate survey rallied a little bit more to 95.0 from the 94.7 in October. All very German, little incremental improvements on each iteration, but improvements all the same.

Entrance polls: Most elections see the candidate field thinning after initial declarations, but this week Billionaire Michael Bloomberg and former Massachusetts governor Deval Patrick entered the race.  With low polling, they start with a tough hill to climb, and will miss early primaries, but Bloomberg is blanketing the Super Tuesday states – the collection of states with same day primaries – to raise his numbers while Patrick starts small.  They’re entering to bolster what they see as a weak field led by a slipping Biden, ultra-left Warren and amid an apparently faltering impeachment attempt (impeachment support has slipped from 49.9% to 46.3%).

… this while the trade talks offered an optimistic boost with yesterday’s late communications
… pushing most futures marginally into positive territory this morning – bar Hong Kong
… where leader Carrie Lam said she would “reflect on these views” after an election thumping
… Oh, and the next deadline is December 15th when a further $160billion in tariffs are due
Hewlett Packard Enterprise (-4.5%) solved cost cutting to boost earnings, but not revenue growth

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +9.96 (+0.75%) at 1,339 (YTD: 23.61%; 5YR: 52.6%)
MSCI AC World Equities (USD) up +71.61 (+0.75%) at 9,675 (YTD: 24.49%; 5YR: 48.5%)
Barclays Global Aggregate Bonds down -0.07 (-0.01%) at 509 (YTD: 6.18%; 5YR: 10.4%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +23.35 (+0.75%) at 3,134 (YTD: 25.00%; 5YR: 51.2%)    
NASDAQ up +112.60 (+1.32%) at 8,632 (YTD: 30.10%; 5YR: 80.3%)    
Euro STOXX 50 up +20.36 (+0.55%) at 3,708 (YTD: 23.53%; 5YR: 14.9%)    
FTSE 100 up +69.48 (+0.95%) at 7,396 (YTD: 9.93%; 5YR: 9.9%)    
CAC up +31.73 (+0.54%) at 5,925 (YTD: 25.24%; 5YR: 35.5%)    
DAX up +82.57 (+0.63%) at 13,246 (YTD: 25.45%; 5YR: 33.6%)    
Nikkei 225  up +80.51 (+0.35%) at 23,373 (YTD: 16.78%; 5YR: 34.5%)    
Hang Seng down -53.26 (-0.20%) at 26,940 (YTD: 4.23%; 5YR: 11.7%)    
MSCI Emerging Markets up +4.93 (+0.47%) at 1,053 (YTD: 9.08%; 5YR: 4.1%)    
    
Selected Government Bond Yields    
US 2 Year down -0.01 at 1.60 (began the year at 2.49; 5 years ago it was 0.52)    
US 10 Year up +0.00 at 1.76 (began the year at 2.68; 5 years ago it was 2.24)    
UK 10 Year down -0.01 at 0.70 (began the year at 1.28; 5 years ago it was 1.98)    
Germany 10 Year up +0.00 at -0.35 (began the year at 0.24; 5 years ago it was 0.74)    
France 10 Year up +0.01 at -0.03 (began the year at 0.70; 5 years ago it was 1.05)    
Italy 10 Year up +0.02 at 1.19 (began the year at 2.74; 5 years ago it was 2.16)    
Japan 10 Year unchanged at -0.09 (began the year at -0.01; 5 years ago it was 0.43)    
Barclays EM Basket up +0.03 at 5.48 (began the year at 6.22; 5 years ago it was 5.04)
    
Selected Currencies    
$ weakened -0.0007 versus € (-0.06%) at 1.1013 ($: YTD: 3.83%; 5YR: 11.9%)    
€ strengthened +0.0012 versus £ (-0.10%) at 1.1699 (€: YTD: -4.86%; 5YR: 7.9%)    
$ strengthened +0.0005 versus £ (+0.04%) at 1.2884 ($: YTD: -1.08%; 5YR: 18.4%)    
¥ unchanged 0.0000 versus $ (0.00%) at 108.9600 (¥: YTD: -0.64%; 5YR: 8.0%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.08 (+0.13%) at 63.13 (YTD: 18.73%; 5YR: -17.3%)    
WTI Crude ($/bbl) up +0.24 (+0.42%) at 57.94 (YTD: 27.59%; 5YR: -21.9%)    
Gold ($/ozt) up +0.66 (+0.05%) at 1456.00 (YTD: 13.53%; 5YR: 21.5%)    
Copper ($/mt) up +13.00 (+0.22%) at 5868.00 (YTD: -1.63%; 5YR: -11.2%)    
    
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