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28 November 2019

28/11/2019

Market Data and Morning Chat

Morning Chat 

Don’t fret if you don’t get the Morning Chat tomorrow, you haven’t been stuffed, rather, there won’t be one for technical reasons, but we’re back on Monday to kick off December!

A good poll for a leak: The vast majority of polls are based a couple thousand respondents across the country and are a somewhat blunt instrument to predict the election.  Last night’s YouGov’s Multi-level Regression and Post-stratification (MRP) model is quite different as it’s based on over 100,000 responses – more than all polls in total over back to mid-October – and it correctly, and uniquely, forecast May’s lost majority last election. When the MRP results were leaked 4 hours early the pound jumped a third of a cent. Why?, because it estimates a solid 63-seat majority for Johnson this time around.

Economics to be thankful for: The US will be closed today for Thanksgiving – its why you’ve been seeing so many Black Friday events this week – and the economic data was certainly a reasonable harvest helping US equities push to new all-time highs.  The US Q3 GDP estimate was no turkey, revised up from the previous 1.9% estimate to 2.1% as business investment fell less than originally thought. October’s Consumer spending was up 0.3%, an acceleration on September’s pace. Finally, the gravy, durable goods orders were expected to fall 0.8% yet rose 0.6% while last month’s decline improved on revision too.

Trade deal anyone? No, nothing yet, but there are imminent dates reinforcing the idea a deal – if signed this year – is close.  On December 15, a swathe of new US tariffs should come into effect and to avoid those you would expect an robust agreement.  Meanwhile, China usually convokes their annual Economic Work Conference early December and it’s the kind of forum to examine such a deal.  But are they close? Tough question, but given Trump signed into law Congress’ bill supporting Hong Kong’s autonomy with gracious words for President Xi – and the Chinese haven’t left the table – then maybe.

Futures are off about ¼% today thanks to concern over the Hong Kong bill signed by Trump
Another little improvement on the continent, Swiss GDP grew at 0.4% beating the 0.2% forecast 
BATs (+3.2%) saw smoking hot profits despite vaping sales being burned by US health scare
Rolls Royce (-3.4%) shares lose altitude as S&P throttles back on the company’s debt rating
… while S&P calculated that Micron Technologies (+3.1%) debt could be rated higher 

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) up +5.20 (+0.39%) at 1,346 (YTD: 24.26%; 5YR: 53.6%)
MSCI AC World Equities (USD) up +34.16 (+0.35%) at 9,727 (YTD: 25.16%; 5YR: 50.0%)
Barclays Global Aggregate Bonds down -0.53 (-0.10%) at 509 (YTD: 6.20%; 5YR: 10.6%)
    
Selected Equity Indices (Capital returns)    
S&P 500 up +13.11 (+0.42%) at 3,154 (YTD: 25.80%; 5YR: 52.5%)    
NASDAQ up +57.24 (+0.66%) at 8,705 (YTD: 31.20%; 5YR: 81.7%)    
Euro STOXX 50 up +7.30 (+0.20%) at 3,713 (YTD: 23.70%; 5YR: 14.2%)    
FTSE 100 up +26.64 (+0.36%) at 7,430 (YTD: 10.43%; 5YR: 10.5%)    
CAC down -2.78 (-0.05%) at 5,927 (YTD: 25.28%; 5YR: 35.0%)    
DAX up +50.65 (+0.38%) at 13,287 (YTD: 25.84%; 5YR: 33.1%)    
Nikkei 225  down -28.63 (-0.12%) at 23,409 (YTD: 16.96%; 5YR: 34.1%)    
Hang Seng down -50.28 (-0.19%) at 26,904 (YTD: 4.09%; 5YR: 12.2%)    
MSCI Emerging Markets up +5.09 (+0.49%) at 1,053 (YTD: 9.02%; 5YR: 4.8%)    
    
Selected Government Bond Yields    
US 2 Year unchanged at 1.63 (began the year at 2.49; 5 years ago it was 0.47)    
US 10 Year unchanged at 1.77 (began the year at 2.68; 5 years ago it was 2.16)    
UK 10 Year up +0.03 at 0.68 (began the year at 1.28; 5 years ago it was 1.93)    
Germany 10 Year up +0.03 at -0.35 (began the year at 0.24; 5 years ago it was 0.70)    
France 10 Year up +0.03 at -0.03 (began the year at 0.70; 5 years ago it was 0.97)    
Italy 10 Year down -0.02 at 1.19 (began the year at 2.74; 5 years ago it was 2.03)    
Japan 10 Year up +0.03 at -0.09 (began the year at -0.01; 5 years ago it was 0.42)    
Barclays EM Basket up +0.03 at 5.51 (began the year at 6.22; 5 years ago it was 5.01)
    
Selected Currencies    

$ weakened -0.0006 versus € (-0.05%) at 1.1006 ($: YTD: 3.89%; 5YR: 11.5%)    
€ weakened -0.0045 versus £ (+0.38%) at 1.1758 (€: YTD: -5.34%; 5YR: 6.8%)    
$ weakened -0.0057 versus £ (-0.44%) at 1.2941 ($: YTD: -1.53%; 5YR: 17.2%)    
¥ weakened -0.0300 versus $ (-0.03%) at 109.4600 (¥: YTD: -0.18%; 5YR: 8.5%)    
    
Selected Commodities    
Brent Crude ($/bbl) down -0.28 (-0.44%) at 63.38 (YTD: 19.20%; 5YR: -8.1%)    
WTI Crude ($/bbl) down -0.30 (-0.51%) at 58.11 (YTD: 27.97%; 5YR: -21.1%)    
Gold ($/ozt) up +1.57 (+0.11%) at 1455.97 (YTD: 13.53%; 5YR: 24.7%)    
Copper ($/mt) up +21.00 (+0.35%) at 5945.00 (YTD: -0.34%; 5YR: -9.3%)    
    
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