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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 inputs in at the end.
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Short summary of PSG's market commentary for 11 July 2019
South Africa
The local bourse closed higher on Wednesday as the US Federal Reserve (Fed) pointed to a loosened monetary policy in the near future. Shortly after the closing bell, the All Share was up 1.11%.
United States
Financial markets traded higher on Wednesday as US Fed chairman Jerome Powell’s comment that the central bank will do everything in its power to sustain US growth reinforced expectations of an aggressive interest rate cut. At 18h20, the Dow was trading 0.28% in the green.
Europe
European shares slipped for a fourth consecutive day on Wednesday on global growth concerns, while the British pound rebounded from a two-year low recorded in the previous session as data pointed to an expansion in the UK’s economy during May. At 18h40, the FTSE 100 Index and the DAX had lost 0.07% and 0.51% respectively.
Hong Kong
Shares in Hong Kong traded higher on Wednesday as the US and China resumed trade talks aimed at halting the protracted trade dispute, while investors kept a close eye on Powell’s testimony. At 18h44, the Hang Seng gained 0.16%.
Japan
Japan’s Nikkei was range-bound and traded lower on Wednesday in thin trade, as investors scrutinised Powell’s testimony on the state of the world’s biggest economy and sought clarity on the Fed’s monetary policies. At the closing bell, the Nikkei had lost 0.15%.
Rand
The rand endured a day of choppy trade on Wednesday but managed to maintain its upper hand against major global currencies as investors cheered the Fed’s dovish stance on monetary policy, boosting hopes of a possible interest rate cut. At 18h50, the rand traded at R14.03 against the dollar.
Precious metals
Gold prices eased on Wednesday due to a decline in demand amid a steady dollar environment. The price of gold has continued to slip this week after the release of a solid US jobs report, adjusting expectations of a hefty interest rate cut in the near future. At 19h05, spot gold was trading in the green at $1 411.09 an ounce.
Oil
The price of oil rose by about 2% on Wednesday after the release of data that indicated a drop in US inventories, while production in the US was disrupted ahead of a storm. At 18h30, a barrel of Brent crude was trading at $67.05.
The local bourse closed higher on Wednesday as the US Federal Reserve (Fed) pointed to a loosened monetary policy in the near future. Shortly after the closing bell, the All Share was up 1.11%.
United States
Financial markets traded higher on Wednesday as US Fed chairman Jerome Powell’s comment that the central bank will do everything in its power to sustain US growth reinforced expectations of an aggressive interest rate cut. At 18h20, the Dow was trading 0.28% in the green.
Europe
European shares slipped for a fourth consecutive day on Wednesday on global growth concerns, while the British pound rebounded from a two-year low recorded in the previous session as data pointed to an expansion in the UK’s economy during May. At 18h40, the FTSE 100 Index and the DAX had lost 0.07% and 0.51% respectively.
Hong Kong
Shares in Hong Kong traded higher on Wednesday as the US and China resumed trade talks aimed at halting the protracted trade dispute, while investors kept a close eye on Powell’s testimony. At 18h44, the Hang Seng gained 0.16%.
Japan
Japan’s Nikkei was range-bound and traded lower on Wednesday in thin trade, as investors scrutinised Powell’s testimony on the state of the world’s biggest economy and sought clarity on the Fed’s monetary policies. At the closing bell, the Nikkei had lost 0.15%.
Rand
The rand endured a day of choppy trade on Wednesday but managed to maintain its upper hand against major global currencies as investors cheered the Fed’s dovish stance on monetary policy, boosting hopes of a possible interest rate cut. At 18h50, the rand traded at R14.03 against the dollar.
Precious metals
Gold prices eased on Wednesday due to a decline in demand amid a steady dollar environment. The price of gold has continued to slip this week after the release of a solid US jobs report, adjusting expectations of a hefty interest rate cut in the near future. At 19h05, spot gold was trading in the green at $1 411.09 an ounce.
Oil
The price of oil rose by about 2% on Wednesday after the release of data that indicated a drop in US inventories, while production in the US was disrupted ahead of a storm. At 18h30, a barrel of Brent crude was trading at $67.05.
Our daily update
Yesterday we looked at the latest Price to Earnings ratio (PE) of the JSE All Share Index. Below an extract from that article
So since January 2011, the JSE All Share average PE ratio is sitting at 17.78 As at the end of June 2019, the JSE All Share PE ratio was sitting at 18.14 (so just above the average levels since the start of 2011).
And the longer term PE ratio as measured by the 13 month moving average (which has been in constant decline for some time now), came in at 18.04, at just below the level that the latest PE ratio of the markets came in at. So what does it tell us about the markets and its valuation? Well market valuations have certainly come down strongly since late 2016 when the market PE ratio was around the 23 mark. Since then company profits and earnings have been disappointing sending share prices tumbling down and dragging down PE ratios with them.
It is handy to know what the overall market PE currently is, what it's longer term trend and average value is and when looking at the valuations and PE ratios of individual shares listed on the JSE one can compare individual company PE ratios and see how they compare to the overall market average PE.
Read the full article here
So since January 2011, the JSE All Share average PE ratio is sitting at 17.78 As at the end of June 2019, the JSE All Share PE ratio was sitting at 18.14 (so just above the average levels since the start of 2011).
And the longer term PE ratio as measured by the 13 month moving average (which has been in constant decline for some time now), came in at 18.04, at just below the level that the latest PE ratio of the markets came in at. So what does it tell us about the markets and its valuation? Well market valuations have certainly come down strongly since late 2016 when the market PE ratio was around the 23 mark. Since then company profits and earnings have been disappointing sending share prices tumbling down and dragging down PE ratios with them.
It is handy to know what the overall market PE currently is, what it's longer term trend and average value is and when looking at the valuations and PE ratios of individual shares listed on the JSE one can compare individual company PE ratios and see how they compare to the overall market average PE.
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.
So the South African stock market is still up substantially for the year, with the only negative months so far being the month of May in which markets pulled back pretty sharply. But the markets rebounded in June with it ending up close to 5% for the month.
For the first trading week of July 2019, the market was down just over 1% for the first trading week of the 2nd half of 2019. On the bright side though is the fact that the South African Rand has been very strong recently with it breaking through the R14/$ barrier for the first time in months. Sadly strong jobs numbers in the US reduced the odds of a FED rate cut which saw the US dollar strengthen and the Rand trading well above $14 again.
The second trading week of July 2019 got off to a positive start. But the positive mood was soon spoiled with the markets closing down a substantial -1.34% for the second trading day of the week, which was followed by a strong rally the day thereafter. The overall South African Stock Exchange is down by -1.02% for July 2019 so far
For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
For the first trading week of July 2019, the market was down just over 1% for the first trading week of the 2nd half of 2019. On the bright side though is the fact that the South African Rand has been very strong recently with it breaking through the R14/$ barrier for the first time in months. Sadly strong jobs numbers in the US reduced the odds of a FED rate cut which saw the US dollar strengthen and the Rand trading well above $14 again.
The second trading week of July 2019 got off to a positive start. But the positive mood was soon spoiled with the markets closing down a substantial -1.34% for the second trading day of the week, which was followed by a strong rally the day thereafter. The overall South African Stock Exchange is down by -1.02% for July 2019 so far
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