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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 22 August 2019
South Africa
The JSE rose on Wednesday as local consumer inflation fell to a six-month low in July. Shortly after the closing bell, the All Share was up by 0.66%.
United States
Strong earnings from retailers lifted US markets on Wednesday as investors awaited new catalysts from the US Federal Reserve (Fed) meeting. The Dow was up by 1.05% just after the JSE closed.
Europe
European shares traded higher as hopes of additional monetary stimulus from key central banks countered fears of a global recession on Wednesday. At about 19h40, the FTSE 100 was up by 1.11%.
Hong Kong
Hong Kong stocks tracked a global rally on Wednesday and finished higher amid fresh hopes of monetary policy easing. The Hang Seng Index closed 0.17% in the green.
Japan
Japanese shares fell on Wednesday as political uncertainty and trade war fears persisted. The Nikkei Index closed 0.28% in the red.
Rand
The rand strengthened on Wednesday after local consumer inflation eased to 4% in July, boosting chances of an additional interest rate cut. Just after the JSE closed, the rand strengthened to R15.19/$.
Precious metals
Gold prices held steady on Wednesday as investors awaited new catalysts from the Fed meeting. At 20h15 an ounce of spot gold traded at $1 504.54.
Oil
Oil prices steadied on Wednesday following reports of a drawdown in domestic crude stocks. At 20h30 a barrel of Brent crude traded at $60.59.
The JSE rose on Wednesday as local consumer inflation fell to a six-month low in July. Shortly after the closing bell, the All Share was up by 0.66%.
United States
Strong earnings from retailers lifted US markets on Wednesday as investors awaited new catalysts from the US Federal Reserve (Fed) meeting. The Dow was up by 1.05% just after the JSE closed.
Europe
European shares traded higher as hopes of additional monetary stimulus from key central banks countered fears of a global recession on Wednesday. At about 19h40, the FTSE 100 was up by 1.11%.
Hong Kong
Hong Kong stocks tracked a global rally on Wednesday and finished higher amid fresh hopes of monetary policy easing. The Hang Seng Index closed 0.17% in the green.
Japan
Japanese shares fell on Wednesday as political uncertainty and trade war fears persisted. The Nikkei Index closed 0.28% in the red.
Rand
The rand strengthened on Wednesday after local consumer inflation eased to 4% in July, boosting chances of an additional interest rate cut. Just after the JSE closed, the rand strengthened to R15.19/$.
Precious metals
Gold prices held steady on Wednesday as investors awaited new catalysts from the Fed meeting. At 20h15 an ounce of spot gold traded at $1 504.54.
Oil
Oil prices steadied on Wednesday following reports of a drawdown in domestic crude stocks. At 20h30 a barrel of Brent crude traded at $60.59.
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Our daily update
The summary below shows the inflation rates per province in South Africa for July 2019. And surprise surprise the inflation rate of the Western Cape was the highest once again. For the 29th month in a row
So for the last 29 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.
Read the full article here
- Western Cape: 4.8%
- Limpopo: 4.7%
- Northern Cape: 4.5%
- Mpumalanga: 4.1%
- South Africa: 4.0%
- Free State: 3.9%
- Gauteng: 3.8%
- KwaZulu-Natal: 3.7%
- Eastern Cape: 3.8%
- North West: 3.6%
So for the last 29 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: 4.1%
- Inflation for services: 4.7%
- Inflation for all goods: 3.4%
- Inflation for durable goods: 2.4%
- Inflation for semi-durable goods: 1.7%
- Inflation for non durable goods: 4.0%
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.
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 the South African stock market is still up substantially for the year, with the only negative months so far being the month of May in which markets pulled back pretty sharply. But the markets rebounded in June with it ending up close to 5% for the month.
The JSE All Share Index ended the month of July down by -2.6%. Only the second negative month for the JSE in 2019. So far August has gotten off to a horrible start, with the JSE All Share index losing -3.41% so far in August 2019. The strong decline for August 2019 is largely driven by the trade and currency war going on between the United States and China and bond yield inversion which is leading markets to believe that a recession in the USA is on its way. There are growing concerns about a global slow down largely driven by the trade ware between the US and China. Locally weak inflation numbers raised hopes of another interest rate cut in South Africa.
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
The JSE All Share Index ended the month of July down by -2.6%. Only the second negative month for the JSE in 2019. So far August has gotten off to a horrible start, with the JSE All Share index losing -3.41% so far in August 2019. The strong decline for August 2019 is largely driven by the trade and currency war going on between the United States and China and bond yield inversion which is leading markets to believe that a recession in the USA is on its way. There are growing concerns about a global slow down largely driven by the trade ware between the US and China. Locally weak inflation numbers raised hopes of another interest rate cut in South Africa.
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