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In our continued efforts to give our readers a broad number of views, opinions and information, we continue to provide PSG's daily market updates and add our own daily rant at the end.
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Short summary of PSG's market commentary for 1 November 2018
South Africa
The JSE surged more than 2% on Wednesday as Naspers gained over 9%, following a decision by global index firm MSCI not to penalise Naspers for having dual share classes. This boosted the company's share price while Tencent rebounded more than 4% after having been ditched by investors over the last few months. The JSE All Share closed 3.22% higher.
United States
US investors were not spooked by Halloween as stocks rose for a second consecutive day on Wednesday, after strong earnings from General Motors and Facebook lifted investor sentiment. The Dow crossed above its 200-day moving average, a key level watched by traders, while the Nasdaq Composite advanced 1.90% and climbed out of correction territory.
Europe
European stocks traded higher on Wednesday, with drug stocks and major oil companies leading the pack. Stocks globally seized on upbeat earnings news and shook off disappointing economic data out of China. The pan-European STOXX 600 benchmark finished 1.84% in the green.
Hong Kong
Hong Kong stocks enjoyed gains on Wednesday, shrugging off China’s worse-than-expected manufacturing data. The gains came in spite of October being a brutal month for Hong Kong and mainland markets, as slowing economic growth and the escalating trade dispute weighed investor sentiment. The Hang-Seng index ended the day 1.38% higher.
Japan
Japan's Nikkei rose 2.16% on Wednesday after the Bank of Japan (BoJ) kept monetary policy steady, lowering its price forecasts. The central bank also kept its short-term interest rate target at -0.10%. The Nikkei share average ended higher on 21 896.50 points.
Rand
The rand weakened 1.40% against the dollar on Wednesday, after the South African Reserve Bank (SARB) announced that local interest rates are set to rise within the next two years, as consumer inflation could hit the upper band of the Bank’s 3% to 6% inflation target. At 17h30 the rand traded R14.80 against the dollar.
Precious metals
Gold prices took a knock on Wednesday, on the back of a firmer dollar and a global rally in equities, after what analysts call the worst month since 2012. Strong US economic data signalled “a return to risk-on equities” with stronger ADP job numbers dragging down the price of gold. Spot gold was trading at $1 215.67 an ounce at 17h45.
Oil
Oil prices went slightly up by 1% on Wednesday as markets anticipated US sanctions imposed on Iran in the next week and as global markets bounced from some of their recent losses. At 17h30 Benchmark Brent crude was trading at $76.28 a barrel.
The JSE surged more than 2% on Wednesday as Naspers gained over 9%, following a decision by global index firm MSCI not to penalise Naspers for having dual share classes. This boosted the company's share price while Tencent rebounded more than 4% after having been ditched by investors over the last few months. The JSE All Share closed 3.22% higher.
United States
US investors were not spooked by Halloween as stocks rose for a second consecutive day on Wednesday, after strong earnings from General Motors and Facebook lifted investor sentiment. The Dow crossed above its 200-day moving average, a key level watched by traders, while the Nasdaq Composite advanced 1.90% and climbed out of correction territory.
Europe
European stocks traded higher on Wednesday, with drug stocks and major oil companies leading the pack. Stocks globally seized on upbeat earnings news and shook off disappointing economic data out of China. The pan-European STOXX 600 benchmark finished 1.84% in the green.
Hong Kong
Hong Kong stocks enjoyed gains on Wednesday, shrugging off China’s worse-than-expected manufacturing data. The gains came in spite of October being a brutal month for Hong Kong and mainland markets, as slowing economic growth and the escalating trade dispute weighed investor sentiment. The Hang-Seng index ended the day 1.38% higher.
Japan
Japan's Nikkei rose 2.16% on Wednesday after the Bank of Japan (BoJ) kept monetary policy steady, lowering its price forecasts. The central bank also kept its short-term interest rate target at -0.10%. The Nikkei share average ended higher on 21 896.50 points.
Rand
The rand weakened 1.40% against the dollar on Wednesday, after the South African Reserve Bank (SARB) announced that local interest rates are set to rise within the next two years, as consumer inflation could hit the upper band of the Bank’s 3% to 6% inflation target. At 17h30 the rand traded R14.80 against the dollar.
Precious metals
Gold prices took a knock on Wednesday, on the back of a firmer dollar and a global rally in equities, after what analysts call the worst month since 2012. Strong US economic data signalled “a return to risk-on equities” with stronger ADP job numbers dragging down the price of gold. Spot gold was trading at $1 215.67 an ounce at 17h45.
Oil
Oil prices went slightly up by 1% on Wednesday as markets anticipated US sanctions imposed on Iran in the next week and as global markets bounced from some of their recent losses. At 17h30 Benchmark Brent crude was trading at $76.28 a barrel.
Our daily rant..
Yesterday we posted an article regarding the South African Reserve Bank (SARB) monetary policy review, in which the bank suggested interest rates could rise as much as 100 basis points over the next two years. And this as a result of their forecasted higher levels of future inflation. To be honest SARB's inflation forecasting sucks, so they should be careful in forecasting interest rates when they can barely forecast inflation properly. And with government tightening the belt on it's spending, and the monetary policy committee looking to have a more hawkish/contractionary policy, South Africa will have both a contractionary monetary and fiscal policy, and these two combined is not goods for economic growth. As we have shown in the past, South Africa's monetary and fiscal policy mix is hardly ever aligned with one another, but if both are aligned on the contractionary side, South Africa's economic growth rate will certainly feel it. So no hope of any meaningful economic growth out of South Africa any time soon then.