Morning Update Note
Friday 14th June 2019
- Wall Street closed higher on Thursday after Donald Trump declined to set a deadline on slapping tariffs on a further $325bn-worth of Chinese imports and energy stocks rallied on the back of two oil tankers being damaged in suspected attacks off the coast of Iran.
- At the close, the Dow Jones Industrial Average was up 0.39% at 26,106.77, while the S&P 500 had gained 0.41% to 2,891.64 and the Nasdaq Composite closed 0.57% up at 7,837.17.
- On Thursday, a group of American companies, including Walmart Inc. and Target Corp. sent a letter to Trump urging him make a trade deal and end the tariff war.
- Elsewhere, oil prices recovered some of their recent losses after a tanker incident in the Gulf of Oman, bouncing back from a sell-off in the previous session when Crude futures tumbled as much as 4% to near five-month lows.
- In terms of data, the number of Americans filing for unemployment benefits unexpectedly rose last week, according to figures from the Labor Department.
- US initial jobless claims increased by 3,000 from the previous week’s revised level to 222,000. The previous week’s level was revised up by 1,000. Economists had been expecting a drop to 216,000.
- Elsewhere, US import prices dropped more than they had in the last five months in May, according to the Labor Department.
- London stocks finished on a mixed note on Thursday amid worries about Sino-US trade relations and increased tensions in the Persian Gulf after the two tankers were set ablaze, even as Boris Johnson won the first round of voting to become the next Prime Minister.
- By the end of trading, the FTSE 100 was up by 0.01% at 7,368.57, while the pound was down 0.12% against the US dollar up by 0.02% versus the euro.
- Johnson won 114 of the votes cast by the 313 Tory MPs, giving him a commanding lead and possibly raising the odds of a no-deal Brexit.
- On the data front, the latest survey from the Royal Institution of Chartered Surveyors showed that delaying the UK’s departure from the European Union helped steady the country’s housing market.
- In equity markets, plumbing and heating equipment supplier Ferguson was the standout performer after US fund manager Trian Investors took a 5.89% stake in the company.
- DS Smith gained as the packaging group reported better-than-expected full-year profits, with peers Smurfit Kappa and Mondi also higher.
- Morrisons was on the rise on news that it and Amazon are expanding their same-day grocery delivery service.
- Tesco was in the red as it said UK like-for-like sales growth slowed to 0.4% from 1.7% in the previous quarter.
- In Europe, the benchmark Stoxx 600 was ahead by 0.16% to 380.33, alongside a rise of 0.44% to 12,169.05 for the German Dax and an advance of 0.82% to 20,630.75 for Milan’s FTSE Mibtel.
- On the economic front, the market spotlight was on the Swiss National Bank, where rate-setters opted to keep official short-term interest rates at -0.75%, as expected.
- Italian issues benefitted from remarks by one of the country’s deputy prime ministers, Luigi di Maio, who said that Prime Minister Giuseppe Conte and economy minister Giovanni Tria had a “full mandate” to negotiate with Brussels in order to avoid an excess deficit procedure.
- Asian markets traded mostly lower trading Friday as geopolitical tensions rose after apparent attacks on two tankers near the Strait of Hormuz.
- At the time of writing, in China, the CSI 300 was down 0.83% at 3,654.88 and the SSE Composite in Shanghai was also down 0.99% at 2,881.97.
- In Japan, the Nikkei is up 0.40% at 21,116.89 while Hong Kong’s Hang Seng is down 0.73% at 27,095.03 and South Korea’s Kospi is down 0.37% at 2,095.41.
- 10yr and 30yr US treasuries are currently yielding at 2.06% and 2.57% respectively.
- 10yr UK gilts trade with a yield of 0.82%.
- German 10yr bund yields trade at -0.26%.
- 10yr Italian and Spanish bond yields trade at 2.33% and 0.50% respectively.
- The WTI crude oil price is $52.06.
- Brent crude is $62.28.
- The gold price is $1,355.67.
- The silver price is $15.04.
- The COMEX copper price is $2.64.
- The US dollar is trading at 108.20 against the Yen.
- The pound is trading at 1.27 against the US dollar.
- The pound is trading at 1.12 against the Euro.
The Psigma Investment Team
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