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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 1 November 2019
South Africa
Despite concerns around Finance Minister Tito Mboweni’s medium-term budget speech on Wednesday, the local bourse made gains on Thursday, boosted by strong performances in the mining sector and certain rand hedges. At the closing bell, the Top 40 had gained 0.99%.
United States
US equities opened slightly stronger on Thursday thanks to strong quarterly reports from Apple and Facebook, however, took a hit from rising uncertainty around a possible trade deal between the US and China. At 19h10, the Dow Jones was 0.80% down.
Europe
European indices reversed earlier gains on Thursday afternoon as renewed concerns surrounding the ever-present US-China trade war spooked investors. At 19h10 the STOXX 600 was down by 0.49%.
Hong Kong
Following in US footsteps, Hong Kong’s central bank also cut their interest rate by 25bps to 2%, boosting their local market. At the close of trade, the Hang Seng Index was 0.81% in the green.
Japan
Although investors looked to lock in profits after the past month’s superb performance, the Nikkei closed up boosted by the Fed’s announcement to cut the US interest rate. The Nikkei closed up 0.37%.
Rand
The rand continued to lose momentum on Thursday after Mboweni’s dire midterm budget speech from the previous day rose concerns amongst investors and ratings agencies. At 19h10, a dollar traded at R15.10.
Precious metals
Bullion prices continued to climb on Thursday due to the US interest rate cut putting the greenback under pressure combined with new US-Sino tariff dispute troubles. At 19h10, gold traded at $1 510.37 per ounce.
Oil
Oil prices dropped by almost 2% on Thursday due to weak factory activity in China and a leak on a major US pipeline disrupting the supply flow. A barrel of Brent crude traded at $59.86 at 19h10.
Despite concerns around Finance Minister Tito Mboweni’s medium-term budget speech on Wednesday, the local bourse made gains on Thursday, boosted by strong performances in the mining sector and certain rand hedges. At the closing bell, the Top 40 had gained 0.99%.
United States
US equities opened slightly stronger on Thursday thanks to strong quarterly reports from Apple and Facebook, however, took a hit from rising uncertainty around a possible trade deal between the US and China. At 19h10, the Dow Jones was 0.80% down.
Europe
European indices reversed earlier gains on Thursday afternoon as renewed concerns surrounding the ever-present US-China trade war spooked investors. At 19h10 the STOXX 600 was down by 0.49%.
Hong Kong
Following in US footsteps, Hong Kong’s central bank also cut their interest rate by 25bps to 2%, boosting their local market. At the close of trade, the Hang Seng Index was 0.81% in the green.
Japan
Although investors looked to lock in profits after the past month’s superb performance, the Nikkei closed up boosted by the Fed’s announcement to cut the US interest rate. The Nikkei closed up 0.37%.
Rand
The rand continued to lose momentum on Thursday after Mboweni’s dire midterm budget speech from the previous day rose concerns amongst investors and ratings agencies. At 19h10, a dollar traded at R15.10.
Precious metals
Bullion prices continued to climb on Thursday due to the US interest rate cut putting the greenback under pressure combined with new US-Sino tariff dispute troubles. At 19h10, gold traded at $1 510.37 per ounce.
Oil
Oil prices dropped by almost 2% on Thursday due to weak factory activity in China and a leak on a major US pipeline disrupting the supply flow. A barrel of Brent crude traded at $59.86 at 19h10.
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Our daily update
Earlier today we covered the latest weekly market wrap from Peregrine Treasury Services. Below a short extract from the weekly market wrap
South African economy looking weaker
Closer to home, the MTBPS and pending Moody’s credit rating announcement veiled the country in a slight tone of gloom this week. To add a “cherry on the top” of the morbid economic climate, the South African unemployment rate hit its worst level in 11 years at 29.1% during Q3. Youth unemployment now sits at a devastatingly high 58.2%. With 16.4 million SA residents now unemployed, where did the South African economy shed the jobs? Mainly within the construction, manufacturing, trade and utilities sectors.
The SA producer price index numbers (PPI), for September, came in lower than expected at 4.1% vs 4.3% year-on-year.
The MTBPS seemed to rattle South Africa on a more foundational level than originally expected. One of the key influencers seeing the rand lose around 3.66% against the USD was the downward revision of SA’s growth rate to 0.5% for the 2019 fiscal year, from an initial 1.5% in February 2019.
A general focus was placed on tax compliance by citizens with the following key topics being discussed in the speech:
Read the full weekly market wrap here
Closer to home, the MTBPS and pending Moody’s credit rating announcement veiled the country in a slight tone of gloom this week. To add a “cherry on the top” of the morbid economic climate, the South African unemployment rate hit its worst level in 11 years at 29.1% during Q3. Youth unemployment now sits at a devastatingly high 58.2%. With 16.4 million SA residents now unemployed, where did the South African economy shed the jobs? Mainly within the construction, manufacturing, trade and utilities sectors.
The SA producer price index numbers (PPI), for September, came in lower than expected at 4.1% vs 4.3% year-on-year.
The MTBPS seemed to rattle South Africa on a more foundational level than originally expected. One of the key influencers seeing the rand lose around 3.66% against the USD was the downward revision of SA’s growth rate to 0.5% for the 2019 fiscal year, from an initial 1.5% in February 2019.
A general focus was placed on tax compliance by citizens with the following key topics being discussed in the speech:
- The budget shortfall is R52.5 billion, lower than anticipated
- SA’s economic growth is slowing and unemployment is rising
- Almost half of the country’s three-year spend (R6.3 trillion) will be allocated to education, social grants and healthcare
- The budget deficit is rising and both debt and debt-service costs are increasing
- Government will cut costs within the ranks of parliament
- National Treasury agreed to further assist embattled state-owned enterprise, Eskom
- e-tolls are to remain in place and payment will be enforced
Read the full weekly market wrap 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 for the month September 2019 the JSE All Share Index ended the month down -2.01%. Midway through the trading month of October 2019 and the JSE All Share Index is up by 2.31%. With only a few days to go it looks like October will be a positive month for the JSE All Share Index. the calendar above shows that during October 2019 there were more negative than positive trading days, but the magnitude of the positive trading days outweighed that of the negative trading days.
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 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