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12 November 2019

12/11/2019

Market Data and Morning Chat

Morning Chat 

Ah, might as well jump: UK equities slipped 0.4% yesterday on the old broken record of US-China trade concerns, and, if you turn your back against the record machine and look this side of the Atlantic, the UK GDP number.  It ain’t the worst that you’ve seen, but it was only +0.3% when forecasters were expecting a modest 0.4% jump. While the services and construction sectors did their part – up 0.4% and 0.6% respectively – the manufacturing sector just sat still.  There was a pleasing recovery in transport equipment but mining & quarrying dug deeper into a hole offseting the gain.

Go ahead an’ jump: The pound saw a decent gain, rising 0.7% against the dollar and 0.5% against the Euro.  As with most recent sterling moves, politics provided the impetus. Nigel Farage – ever one to roll with the punches – announced the Brexit party would not contest the 317 seats the Conservatives won last election, focussing instead on the ones not won. The move should help the Tories and raise the deal-Brexit probability hence the pound’s move. Moreover, and further reassuringly for markets, polling since Parliament’s dissolution on the 6th gives the Tories 39.6%, Labour 28.6%, Lib-Dems 15.8% and Brexit 8.6%.

Jump: Yesterday also saw some broader optimism.  Shares in your local Boots – Walgreen Boots Alliance – leapt 5.1% on a report that KKR, the American investment firm, may take it private in the biggest leveraged buy-out ever. Boeing flew up 4.7% after the company announced that they could resume deliveries of their 737Max next month with commercial service possibly resuming in January. House-builder DR Horton laid decent foundations for their results today hopping up 3.0%. Tesla charged up 2.4% on an analyst upgrade capping a 35% rally since they announced results on October 23.  Just some companies skipping yesterday’s weak market.

RBS (+4.0%), Lloyds Bank (+4.0%) & Persimmon (+3.9%) lead UK shares on Brexit party move 
After two disappointing quarters, revenues were on message for Vodafone with guidance also up
ITV channels solid Q3 advertising revenues on the back of rugby to help meet full year vision
Market futures are pointing up after yesterday’s weak showing on Hong Kong protests

Market Data


Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -3.20 (-0.24%) at 1,324 (YTD: 22.23%; 5YR: 54.1%)
MSCI AC World Equities (USD) down -9.68 (-0.10%) at 9,563 (YTD: 23.05%; 5YR: 49.8%)
Barclays Global Aggregate Bonds up +0.08 (+0.02%) at 506 (YTD: 5.55%; 5YR: 10.3%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -6.07 (-0.20%) at 3,087 (YTD: 23.14%; 5YR: 51.5%)    
NASDAQ down -11.04 (-0.13%) at 8,464 (YTD: 27.56%; 5YR: 81.0%)    
Euro STOXX 50 down -2.83 (-0.08%) at 3,697 (YTD: 23.17%; 5YR: 21.3%)    
FTSE 100 down -30.84 (-0.42%) at 7,329 (YTD: 8.92%; 5YR: 10.9%)    
CAC up +4.12 (+0.07%) at 5,894 (YTD: 24.59%; 5YR: 41.0%)    
DAX down -30.19 (-0.23%) at 13,198 (YTD: 25.00%; 5YR: 43.3%)    
Nikkei 225  up +188.17 (+0.81%) at 23,520 (YTD: 17.51%; 5YR: 36.8%)    
Hang Seng up +132.78 (+0.49%) at 27,059 (YTD: 4.70%; 5YR: 13.0%)    
MSCI Emerging Markets down -11.97 (-1.12%) at 1,053 (YTD: 9.02%; 5YR: 5.7%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.68 (began the year at 2.49; 5 years ago it was 0.54)    
US 10 Year up +0.00 at 1.94 (began the year at 2.68; 5 years ago it was 2.37)    
UK 10 Year up +0.02 at 0.81 (began the year at 1.28; 5 years ago it was 2.19)    
Germany 10 Year up +0.00 at -0.24 (began the year at 0.24; 5 years ago it was 0.81)    
France 10 Year up +0.00 at 0.05 (began the year at 0.70; 5 years ago it was 1.17)    
Italy 10 Year up +0.02 at 1.28 (began the year at 2.74; 5 years ago it was 2.36)    
Japan 10 Year up +0.05 at -0.03 (began the year at -0.01; 5 years ago it was 0.53)    
Barclays EM Basket up +0.00 at 5.47 (began the year at 6.22; 5 years ago it was 5.17)
    
Selected Currencies    
$ strengthened +0.0009 versus € (+0.08%) at 1.1030 ($: YTD: 3.68%; 5YR: 11.3%)    
€ weakened -0.0002 versus £ (+0.02%) at 1.1650 (€: YTD: -4.46%; 5YR: 9.0%)    
$ strengthened +0.0012 versus £ (+0.09%) at 1.2846 ($: YTD: -0.78%; 5YR: 18.7%)    
¥ weakened -0.2500 versus $ (-0.23%) at 109.2700 (¥: YTD: -0.36%; 5YR: 5.7%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +0.13 (+0.21%) at 62.54 (YTD: 17.62%; 5YR: -20.7%)    
WTI Crude ($/bbl) down -0.38 (-0.66%) at 56.86 (YTD: 25.21%; 5YR: -27.1%)    
Gold ($/ozt) down -3.93 (-0.27%) at 1451.97 (YTD: 13.22%; 5YR: 24.9%)    
Copper ($/mt) down -45.50 (-0.77%) at 5878.50 (YTD: -1.45%; 5YR: -12.2%)    
    
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