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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 17 September 2019
South Africa
The local market started the week in the green, reaching a seven-week high, after banks rose by more than 3% and Sasol by 9.85%, boosted by the oil price jump. At the closing bell, the All Share was up by 1.28%.
United States
Wall Street opened lower on Monday, regardless of the surge in energy shares, because of investor concerns around global growth after the weekend’s attacks in Saudi Arabia. Shortly after the JSE closed, the Dow was 0.60% in the negative.
Europe
Despite the rise in oil shares on Monday, European markets fell as weak Chinese economic data and the attack on Saudi Arabian crude facilities fuelled global growth fears. At the end of trade, the STOXX 600 stood 0.58% in the red.
Hong Kong
On Monday, Asian indices were weighed down by negative Chinese economic data and the weekend’s escalating protests in Hong Kong. The Hang Seng closed down 1.03%.
Japan
The Nikkei Index was closed due to a public holiday.
Rand
The local currency took a knock on Monday after the oil price surged; as an oil importer, an increase in oil prices will negatively impact the South African currency. At 18h45, the rand traded at R14.63/$.
Precious metals
Investors flocked to safe-haven assets on Monday, boosting gold by over 1%, after the attacks in Saudi Arabia “fuelled concerns of a further escalation in Middle East tensions”. At 18h45, an ounce of spot gold traded at $1 503.92.
Oil
Oil prices rose by almost 20% at one point on Monday because of the drone attack on Saudi Arabian crude facilities over the weekend. The attack shut down 5% of the world’s crude output. At 18h45, a barrel of Brent crude traded at $65.85.
The local market started the week in the green, reaching a seven-week high, after banks rose by more than 3% and Sasol by 9.85%, boosted by the oil price jump. At the closing bell, the All Share was up by 1.28%.
United States
Wall Street opened lower on Monday, regardless of the surge in energy shares, because of investor concerns around global growth after the weekend’s attacks in Saudi Arabia. Shortly after the JSE closed, the Dow was 0.60% in the negative.
Europe
Despite the rise in oil shares on Monday, European markets fell as weak Chinese economic data and the attack on Saudi Arabian crude facilities fuelled global growth fears. At the end of trade, the STOXX 600 stood 0.58% in the red.
Hong Kong
On Monday, Asian indices were weighed down by negative Chinese economic data and the weekend’s escalating protests in Hong Kong. The Hang Seng closed down 1.03%.
Japan
The Nikkei Index was closed due to a public holiday.
Rand
The local currency took a knock on Monday after the oil price surged; as an oil importer, an increase in oil prices will negatively impact the South African currency. At 18h45, the rand traded at R14.63/$.
Precious metals
Investors flocked to safe-haven assets on Monday, boosting gold by over 1%, after the attacks in Saudi Arabia “fuelled concerns of a further escalation in Middle East tensions”. At 18h45, an ounce of spot gold traded at $1 503.92.
Oil
Oil prices rose by almost 20% at one point on Monday because of the drone attack on Saudi Arabian crude facilities over the weekend. The attack shut down 5% of the world’s crude output. At 18h45, a barrel of Brent crude traded at $65.85.
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Our daily update
Our sister site covered the latest earnings report of La-Z-Boy the maker of the famous recliner seats.
About
La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kinca id®. The company-owned Retail segment includes 155 of the 352 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.
The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 352 stand-alone La-Z-Boy Furniture Galleries® stores and 554 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units
Valuation
So based on the earnings report of La-Z-Boy (NYSE: LZB) and their fiscal outlook provided for 2020 what do we value LZB stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for La-Z-Boy (LZB) at $26.30 a stock. We therefore feel that the stock is overvalued Long term fundamental or value investors should not be buying into LZB at its current price, but rather look to buy into the stock at 10% below our target (full value) price. So we suggest looking to buy at levels around $23.70 or below
Read the full article here
About
La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The La-Z-Boy Upholstery segment companies are England and La-Z-Boy. The Casegoods segment consists of three brands: American Drew®, Hammary®, and Kinca id®. The company-owned Retail segment includes 155 of the 352 La-Z-Boy Furniture Galleries® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.
The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 352 stand-alone La-Z-Boy Furniture Galleries® stores and 554 independent Comfort Studio® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units
Valuation
So based on the earnings report of La-Z-Boy (NYSE: LZB) and their fiscal outlook provided for 2020 what do we value LZB stock at? Based on the earnings reported and the fiscal guidance provided our valuation model provides a target (full value) price for La-Z-Boy (LZB) at $26.30 a stock. We therefore feel that the stock is overvalued Long term fundamental or value investors should not be buying into LZB at its current price, but rather look to buy into the stock at 10% below our target (full value) price. So we suggest looking to buy at levels around $23.70 or below
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 just more than half way through the month of September 2019 and so far the JSE All Share Index is up by 4.32% for this period. A very strong first half of September 2019. Investors will be hoping this trend can continue, but drone attacks on Saudi Arabian crude oil facilities sent the crude oil price soaring yesterday which will not be good for investor sentiment and future inflation levels. Lets hope there is a de-escalation of tension in the middle east.
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.
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 just more than half way through the month of September 2019 and so far the JSE All Share Index is up by 4.32% for this period. A very strong first half of September 2019. Investors will be hoping this trend can continue, but drone attacks on Saudi Arabian crude oil facilities sent the crude oil price soaring yesterday which will not be good for investor sentiment and future inflation levels. Lets hope there is a de-escalation of tension in the middle east.
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.
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