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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 rant at the end.
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Short summary of PSG's market commentary for 20 November 2018
South Africa
The JSE kicked off the week in positive territory amid a weaker dollar environment ahead of what analysts predict to be a subdued, but risky week. Dovish comments from the US Fed put immense pressure on the greenback, while trade war and Brexit concerns continue to cloud investor sentiment. At 18h30 the JSE All Share closed 0.63% higher.
United States
US stocks took a knock on Monday afternoon, as the broader technology sector succumbed to pressure from declines posted by market heavyweight Apple and semiconductor shares. The Dow was down 1.11% at 18h35.
Europe
European stocks traded higher on Monday but ongoing political concerns and a decline in shares of a key auto maker capped gains, after the Renault-Nissan alliance announced it would overthrow Chairman Carlos Ghosn after his arrest over financial law violation. The pan-European STOXX 600 benchmark closed lower at 0.72%.
Hong Kong
Hong Kong stocks enjoyed gains on Monday as mainland developers rose amid hopes of policy loosening, but ongoing concerns over the China-US trade dispute continue to put a dent on investor sentiment. The Hang Seng ended the day on a high at 26 302.50 points.
Japan
Japan’s Nikkei rebounded on Monday after investors made up for their short positions on chip-related stocks, as a result, offsetting a drop in financials that were crippled by lower US yields. The Nikkei share average ended the day on a high of 2.62% at 21 814.00 points.
Rand
The rand steadied at R14 to the dollar in the afternoon, amid a weaker dollar environment which succumbed to pressure after dovish comments made by the US Fed, cautioned that decelerating global growth could ruin interest-rate increase plans for 2019. At 18h15 the rand traded R14.01 against the dollar.
Precious metals
Gold prices slightly rose on Monday as muted concerns about slowing global growth by the US Fed raised uncertainty about how much more US interest rates would rise, weighing on the dollar. Spot gold was up 0.09% at $1 222.50 an ounce.
Oil
Oil prices surged for a fourth consecutive session on Monday, lifted by the prospect that Saudi Arabia will push Opec and Russia to limit supply towards the end of the year. At 18h00 benchmark Brent crude was trading at $66.39 a barrel.
The JSE kicked off the week in positive territory amid a weaker dollar environment ahead of what analysts predict to be a subdued, but risky week. Dovish comments from the US Fed put immense pressure on the greenback, while trade war and Brexit concerns continue to cloud investor sentiment. At 18h30 the JSE All Share closed 0.63% higher.
United States
US stocks took a knock on Monday afternoon, as the broader technology sector succumbed to pressure from declines posted by market heavyweight Apple and semiconductor shares. The Dow was down 1.11% at 18h35.
Europe
European stocks traded higher on Monday but ongoing political concerns and a decline in shares of a key auto maker capped gains, after the Renault-Nissan alliance announced it would overthrow Chairman Carlos Ghosn after his arrest over financial law violation. The pan-European STOXX 600 benchmark closed lower at 0.72%.
Hong Kong
Hong Kong stocks enjoyed gains on Monday as mainland developers rose amid hopes of policy loosening, but ongoing concerns over the China-US trade dispute continue to put a dent on investor sentiment. The Hang Seng ended the day on a high at 26 302.50 points.
Japan
Japan’s Nikkei rebounded on Monday after investors made up for their short positions on chip-related stocks, as a result, offsetting a drop in financials that were crippled by lower US yields. The Nikkei share average ended the day on a high of 2.62% at 21 814.00 points.
Rand
The rand steadied at R14 to the dollar in the afternoon, amid a weaker dollar environment which succumbed to pressure after dovish comments made by the US Fed, cautioned that decelerating global growth could ruin interest-rate increase plans for 2019. At 18h15 the rand traded R14.01 against the dollar.
Precious metals
Gold prices slightly rose on Monday as muted concerns about slowing global growth by the US Fed raised uncertainty about how much more US interest rates would rise, weighing on the dollar. Spot gold was up 0.09% at $1 222.50 an ounce.
Oil
Oil prices surged for a fourth consecutive session on Monday, lifted by the prospect that Saudi Arabia will push Opec and Russia to limit supply towards the end of the year. At 18h00 benchmark Brent crude was trading at $66.39 a barrel.
Our daily rant..
We read on Bloomberg that their polled economists predict a 25 basis point increase in the REPO rate of South Africa during the South African Reserve Bank (SARB) monetary policy committee (MPC) meetings starting today and ending with the interest rate announcement on Thursday 22 November 2018. We do not believe it would be in the best interest of South Africa's economy to raise interest rates at this point in time. Inflation has not breached the 3% to 6% target, and factors that have temporarily driven up inflation are outside consumers control, basically higher crude oil prices which leads to higher fuel prices and higher inflation. Punishing consumers by raising rates and hoping they spend less which will drive down prices as retailers look to clear stock will only hurt consumers, retailers and wholesalers and the South African economy and there is no guarantee that inflation will be curbed. This is cost push inflation at play here and not demand pull inflation. The MPC needs to take cognizance of the fact that South Africa's economy is in deep trouble, and raising interest rates due to outside factors will hurt the economy even more. We will be the outliers and say that the MPC will not raise interest rates at this meeting. If they do they have very little understanding of the difference between cost push and demand pull inflation.