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PSG daily investment update 21 May 2019
Date: 21 May 2019 Category: Stock Market |
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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 21 May 2019
South Africa
The JSE fell on Monday, weighed down by risks in global markets. Local losses were led by Naspers that fell 3.29%, tracking losses in Hong Kong-listed Tencent, as investors shied away from technology shares. The All Share closed 1.01% in the red.
United States
US shares dropped yesterday as Washington’s crackdown on China’s Huawei Technologies fanned fears about a hit to the broader technology sector and escalating trade tensions between the world’s two largest economies. Shortly after the JSE closed, the Dow was 0.11%.
Europe
Shares in Europe recorded broad-based losses on Monday, as the US curb on China’s Huawei Technologies ignited concerns about waning global trade. Shortly after the JSE closed, the FTSE 100 had fallen 0.46%, the CAC 40 1.31% and the DAX 30 dropped by 1.33%.
Hong Kong
The Hong Kong stock market closed weaker on Monday as Beijing and Washington officials firmed up their rhetoric on trade, while technology companies posted steep losses. The Hang Seng index was down 0.53%.
Japan
The Nikkei edged higher on Monday as growth in the nation’s economy unexpectedly accelerated in the first quarter, although market gains were limited as the data also pointed towards lacklustre domestic demand. The Nikkei ended 0.24% higher.
Rand
The rand was slightly firmer against major currencies on Monday, as global markets waited for more developments in the US-China trade spat. A dollar traded at R14.38 at 18h50.
Precious metals
Gold fell yesterday as investors preferred the safety of the dollar, with the currency underpinned by robust economic reports out of the US, even as trade tensions persist. An ounce of spot gold traded for $1276.32 at 18h50.
Oil
Oil continued its push higher on Monday after oil-cartel Opec indicated its intent to maintain recent production cuts until the end of the year. Prices have also risen amid escalating tension between the US and Iran over their nuclear programme. Brent crude traded at $72.43 a barrel at 18h50.
The JSE fell on Monday, weighed down by risks in global markets. Local losses were led by Naspers that fell 3.29%, tracking losses in Hong Kong-listed Tencent, as investors shied away from technology shares. The All Share closed 1.01% in the red.
United States
US shares dropped yesterday as Washington’s crackdown on China’s Huawei Technologies fanned fears about a hit to the broader technology sector and escalating trade tensions between the world’s two largest economies. Shortly after the JSE closed, the Dow was 0.11%.
Europe
Shares in Europe recorded broad-based losses on Monday, as the US curb on China’s Huawei Technologies ignited concerns about waning global trade. Shortly after the JSE closed, the FTSE 100 had fallen 0.46%, the CAC 40 1.31% and the DAX 30 dropped by 1.33%.
Hong Kong
The Hong Kong stock market closed weaker on Monday as Beijing and Washington officials firmed up their rhetoric on trade, while technology companies posted steep losses. The Hang Seng index was down 0.53%.
Japan
The Nikkei edged higher on Monday as growth in the nation’s economy unexpectedly accelerated in the first quarter, although market gains were limited as the data also pointed towards lacklustre domestic demand. The Nikkei ended 0.24% higher.
Rand
The rand was slightly firmer against major currencies on Monday, as global markets waited for more developments in the US-China trade spat. A dollar traded at R14.38 at 18h50.
Precious metals
Gold fell yesterday as investors preferred the safety of the dollar, with the currency underpinned by robust economic reports out of the US, even as trade tensions persist. An ounce of spot gold traded for $1276.32 at 18h50.
Oil
Oil continued its push higher on Monday after oil-cartel Opec indicated its intent to maintain recent production cuts until the end of the year. Prices have also risen amid escalating tension between the US and Iran over their nuclear programme. Brent crude traded at $72.43 a barrel at 18h50.
Our daily update
Yesterday Pioneer Foods Group (PFG) published their latest set of financial results and the market didn't like it at all. The stock price was down as much as 15% yesterday during the day's trade. Revenue showed strong growth but profit declined as operating margins continued to be squeezed in a difficult economic environment. Below the group's own opinion regarding their outlook for the future.
OUTLOOK
The macro environment is expected to remain challenging and will continue to place pressure on consumer demand with resulting muted spending. Cost inflation in key raw materials and other operational input costs remains present although it is starting to level off. With pricing recovery still constrained by lower consumer demand and retailer competitive intensity, pressure on operating margins is expected to continue. The Group will continue efforts to optimise costs and efficiencies whilst ensuring its brands remain available and relevant to customers and consumers, thus strengthening the base for continued growth.
Read the full article here
OUTLOOK
The macro environment is expected to remain challenging and will continue to place pressure on consumer demand with resulting muted spending. Cost inflation in key raw materials and other operational input costs remains present although it is starting to level off. With pricing recovery still constrained by lower consumer demand and retailer competitive intensity, pressure on operating margins is expected to continue. The Group will continue efforts to optimise costs and efficiencies whilst ensuring its brands remain available and relevant to customers and consumers, thus strengthening the base for continued growth.
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 after 4 consecutive months of positive returns on the JSE All Share Index, the month of May kicked of trading on a positive note. And then Donald Trump striked by ordering tariffs be raised on billions worth of goods imported from China. China then announced a set of retaliatory tariffs on US goods. So it looks like the trade war is back into full swing. And added to that it seems like tensions between Iran and the US are escalating too, after alleged sabotage of oil container ships by Iran (in which it is alleged that drones laden with explosives flew into these container ships). All of this is leading to the old adage, sell in May and go away. As the month of May is starting to wipe out the gains made from January 2019 to April 2019.
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