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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 18 September 2019
South Africa
Although the market expects the local repo rate to remain unchanged today, the JSE lost ground on Wednesday as investors acted cautiously ahead of the US Federal Reserve Bank’s (Fed) interest rate decision. At the closing bell, the All Share was down 1.19%.
United States
US indices opened lower on Wednesday due to a warning by FedEx about their full-year results and as investors treaded carefully ahead of the Fed announcing its interest rate decision. Just after the JSE closed, the Nasdaq was 0.39% lower.
Europe
Tech shares offset earlier losses from luxury goods on Wednesday, boosting European markets slightly; however, trade was subdued as investors awaited the Fed’s rate announcement. At the end of trade, the STOXX 600 stood 0.02% in the green.
Hong Kong
Chinese shares rose on Wednesday on hopes of lower local, and US, borrowing costs as well as improving relations between Beijing and Washington. The Shanghai Index closed 0.25% up.
Japan
After a 10-day rally, Japanese indices slipped slightly on Wednesday due to investors cashing in profits ahead of key central bank meetings in the US and Japan. The Nikkei fell 0.18%.
Rand
The rand regained some losses on Wednesday as fears of oil price increases died down, and investors awaited the interest rate decision for the US. At 18h00, the rand traded at R14.63 per dollar.
Precious metals
Gold prices inched higher on Wednesday, remaining above $1 500 per ounce, as investors kept their eyes on the US, expecting an interest rate cut. At 18h00, an ounce of spot gold traded at $1 507.37.
Oil
On Wednesday, oil prices extended the previous day’s losses, after Saudi Arabia announced their plans to restore production quickly and US stockpiles rose more than anticipated. At 18h00, a barrel of Brent crude traded at $64.56.
Although the market expects the local repo rate to remain unchanged today, the JSE lost ground on Wednesday as investors acted cautiously ahead of the US Federal Reserve Bank’s (Fed) interest rate decision. At the closing bell, the All Share was down 1.19%.
United States
US indices opened lower on Wednesday due to a warning by FedEx about their full-year results and as investors treaded carefully ahead of the Fed announcing its interest rate decision. Just after the JSE closed, the Nasdaq was 0.39% lower.
Europe
Tech shares offset earlier losses from luxury goods on Wednesday, boosting European markets slightly; however, trade was subdued as investors awaited the Fed’s rate announcement. At the end of trade, the STOXX 600 stood 0.02% in the green.
Hong Kong
Chinese shares rose on Wednesday on hopes of lower local, and US, borrowing costs as well as improving relations between Beijing and Washington. The Shanghai Index closed 0.25% up.
Japan
After a 10-day rally, Japanese indices slipped slightly on Wednesday due to investors cashing in profits ahead of key central bank meetings in the US and Japan. The Nikkei fell 0.18%.
Rand
The rand regained some losses on Wednesday as fears of oil price increases died down, and investors awaited the interest rate decision for the US. At 18h00, the rand traded at R14.63 per dollar.
Precious metals
Gold prices inched higher on Wednesday, remaining above $1 500 per ounce, as investors kept their eyes on the US, expecting an interest rate cut. At 18h00, an ounce of spot gold traded at $1 507.37.
Oil
On Wednesday, oil prices extended the previous day’s losses, after Saudi Arabia announced their plans to restore production quickly and US stockpiles rose more than anticipated. At 18h00, a barrel of Brent crude traded at $64.56.
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Our daily update
The summary below shows the inflation rates per province in South Africa for August 2019. And surprise surprise the inflation rate of the Western Cape was the highest once again. For the30th month in a row
So for the last 30 months, the Western Cape has had the highest inflation rate of any of South Africa's provinces. And it is attributed to the growth rate in their property rent. See more regarding this in our Cape Town Property Bubble article.
The extremely low rates of inflation for durable and semi-durable goods (all goods expected to last between a year and 5 years such as appliances, and clothing and footwear etc) shows that retailers are struggling to sell these type of goods thus very little price increases are levied on such goods else retailers wont be able to move the stock as consumers wont buy it. It is a manifestation of the weak economic conditions and struggling consumer demand in South Africa. With the SARB monetary policy committee meeting today and tomorrow to decide on South Africa's interest rates one wonders if another interest rate cut is coming considering the inflation rate is still well within the 3% and 6% target.
- Western Cape: 4.9%
- Limpopo: 4.7%
- Northern Cape: 4.6%
- Mpumalanga: 4.4%
- South Africa: 4.3%
- Free State: 4.2%
- Gauteng: 4.1%
- KwaZulu-Natal: 4.1%
- Eastern Cape: 4.0%
- North West: 3.8%
So for the last 30 months, the Western Cape has had the highest inflation rate of any of South Africa's provinces. And it is attributed to the growth rate in their property rent. See more regarding this in our Cape Town Property Bubble article.
- Pensioners inflation: 4.4%
- Inflation for services: 4.7%
- Inflation for all goods: 3.9%
- Inflation for durable goods: 2.6%
- Inflation for semi-durable goods: 2.0%
- Inflation for non durable goods: 4.5%
The extremely low rates of inflation for durable and semi-durable goods (all goods expected to last between a year and 5 years such as appliances, and clothing and footwear etc) shows that retailers are struggling to sell these type of goods thus very little price increases are levied on such goods else retailers wont be able to move the stock as consumers wont buy it. It is a manifestation of the weak economic conditions and struggling consumer demand in South Africa. With the SARB monetary policy committee meeting today and tomorrow to decide on South Africa's interest rates one wonders if another interest rate cut is coming considering the inflation rate is still well within the 3% and 6% target.
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 1.47% for this period and it looks like it is struggling to hold on to the gains made earlier in the month.
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 1.47% for this period and it looks like it is struggling to hold on to the gains made earlier in the month.
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