|
Related Topics |
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 inputs in at the end.
|
Short summary of PSG's market commentary for 10 October 2019
South Africa
The JSE closed lower on Wednesday as investors waited for the start of trade negotiations between the US and China today. The local bourse closed 0.35% in the red.
United States
Wall Street rose for the first time in three sessions on Wednesday with technology stocks providing a boost, as a report that China was open to a partial trade deal soothed investor nerves ahead of high-level talks today. Shortly after the JSE closed, the Dow was up 0.45%.
Europe
German shares logged their best day in six weeks on Wednesday, leading the charge among European shares, as sentiment lifted by signs of progress in the US-China trade relations. Shortly after the JSE closed, Germany’s DAX 30 was up by 0.97%.
Hong Kong
Shares in China and Hong Kong fell yesterday as escalating trade and political tensions between Beijing and Washington a day ahead of high-level negotiations soured risk sentiment. The Hang Seng Index fell 0.81%.
Japan
Japanese shares fell on Wednesday as US-China tensions dimmed hopes for a deal in high-level trade talks this week and soured the mood of investors. The Nikkei share average fell 0.61%.
Rand
The rand appeared to ignore trade-war jitters yesterday as the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) improved to its highest level in three months. At 19h30, a dollar traded at R15.17.
Precious metals
Gold prices were steady on Wednesday as markets waited for clues on monetary easing by the US Federal Reserve. At 19h30, an ounce of spot gold traded at $1 507.55.
Oil
Oil rose yesterday after media reports that China was open to agreeing on a partial trade deal with the US, while Turkey’s military operation in northern Syria also supported prices as it could affect regional oil production. A barrel of Brent crude traded at $58.85.
The JSE closed lower on Wednesday as investors waited for the start of trade negotiations between the US and China today. The local bourse closed 0.35% in the red.
United States
Wall Street rose for the first time in three sessions on Wednesday with technology stocks providing a boost, as a report that China was open to a partial trade deal soothed investor nerves ahead of high-level talks today. Shortly after the JSE closed, the Dow was up 0.45%.
Europe
German shares logged their best day in six weeks on Wednesday, leading the charge among European shares, as sentiment lifted by signs of progress in the US-China trade relations. Shortly after the JSE closed, Germany’s DAX 30 was up by 0.97%.
Hong Kong
Shares in China and Hong Kong fell yesterday as escalating trade and political tensions between Beijing and Washington a day ahead of high-level negotiations soured risk sentiment. The Hang Seng Index fell 0.81%.
Japan
Japanese shares fell on Wednesday as US-China tensions dimmed hopes for a deal in high-level trade talks this week and soured the mood of investors. The Nikkei share average fell 0.61%.
Rand
The rand appeared to ignore trade-war jitters yesterday as the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) improved to its highest level in three months. At 19h30, a dollar traded at R15.17.
Precious metals
Gold prices were steady on Wednesday as markets waited for clues on monetary easing by the US Federal Reserve. At 19h30, an ounce of spot gold traded at $1 507.55.
Oil
Oil rose yesterday after media reports that China was open to agreeing on a partial trade deal with the US, while Turkey’s military operation in northern Syria also supported prices as it could affect regional oil production. A barrel of Brent crude traded at $58.85.
Advertisement (and yes South Africans can buy from Amazon as they deliver to SA)
Our daily update
The image below obtained from the latest United Nations Conference on Trade and Development (UNCTAD) trade and development report for 2019 shows the external debt of developing countries and economies in transition over time as well as the structure of this debt over time
The worry we have with all this debt is the fact that it needs to be repaid at some point, and in the majority of cases the developing and transition economies have to pay higher rates of interest on debt issued as the perceived risk of buying debt issued by developing and transition economies is far greater than buying debt issued by the developed world for example. So if the US issues $1 billion in debt maturing in 5 years they might only have to pay say 3% for example, but of a country like South Africa has to issue the same amount of debt for same maturity date it will have to pay rates of say 5% or even higher to compensate investors for the greater "risk" they are taking by buying developing country debt instead of developed country debt.
Essentially what this means is that if the developed and developing economies issue the same amount of debt over time, the developing countries will pay a far greater amount of money towards servicing and paying off debt than what the developed countries would, and this will mean that developing countries will always lag behind the developed countries based on the fact that money developing countries spend on higher debt and debt servicing costs compared to the developed world, and that difference in debt servicing costs the developed countries can use in actually developing their countries even more, leading to continued disparity between developed and developing economies.
Read the full article here
The worry we have with all this debt is the fact that it needs to be repaid at some point, and in the majority of cases the developing and transition economies have to pay higher rates of interest on debt issued as the perceived risk of buying debt issued by developing and transition economies is far greater than buying debt issued by the developed world for example. So if the US issues $1 billion in debt maturing in 5 years they might only have to pay say 3% for example, but of a country like South Africa has to issue the same amount of debt for same maturity date it will have to pay rates of say 5% or even higher to compensate investors for the greater "risk" they are taking by buying developing country debt instead of developed country debt.
Essentially what this means is that if the developed and developing economies issue the same amount of debt over time, the developing countries will pay a far greater amount of money towards servicing and paying off debt than what the developed countries would, and this will mean that developing countries will always lag behind the developed countries based on the fact that money developing countries spend on higher debt and debt servicing costs compared to the developed world, and that difference in debt servicing costs the developed countries can use in actually developing their countries even more, leading to continued disparity between developed and developing economies.
Read the full article here
Our JSE All Share index daily performance calendar
Visit our JSE Calendar tracker page for a expanded version of the calendar below
The graphic below provides the daily returns of the JSE All Share Index (J203) on a calendar chart. Provides a great overview of the All share index over the course of the month. It will be updated daily with our daily investment update as received from PSG.
While the month of August was negative by -1.73% lets see what the month of September holds for the South African stock market.
So for the month September 2019 the JSE All Share Index ended the month down -2.01%. First trading week of October 2019 got off to very rough start but the second trading week got off two a flyer but since then it has been two moderately red days on the markets.
There continues to be concerns about a global economic slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war. Added to market worries is the impeachment investigation currently taking place against President Donald Trump due to him asking Ukraine's president to investigate his political rivals, which most believe is a clear abuse of his powers.
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
So for the month September 2019 the JSE All Share Index ended the month down -2.01%. First trading week of October 2019 got off to very rough start but the second trading week got off two a flyer but since then it has been two moderately red days on the markets.
There continues to be concerns about a global economic slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war. Added to market worries is the impeachment investigation currently taking place against President Donald Trump due to him asking Ukraine's president to investigate his political rivals, which most believe is a clear abuse of his powers.
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article