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PSG daily investment update 22 November 2018
Date: 22 November 2018 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 22 November 2018
South Africa
The local bourse posted gains on Wednesday, recovering from Tuesday's 2.50% plunge, lifted by a firmer rand, as some risk-on trade returned to the market. Meanwhile, inflation for October came out largely as expected. The data comes ahead of the SA Reserve Bank's interest-rate decision on Thursday. At 19h20 the JSE All Share closed 0.49% higher.
United States
US stocks rebounded from a ruthless two-day selloff on Wednesday as strong earnings from retail giant Foot Locker and gains in technology stocks boosted investor sentiment and somewhat revived confidence ahead of the Thanksgiving holiday. The Dow was up 0.67% at 19h15.
Europe
European stocks pushed higher on Wednesday, recovering from Tuesday’s hefty losses, but doing little to help investor confidence as concerns over trade wars, Brexit and the Italian budget row remained spikes in the eyes of the investor. The pan-European STOXX 600 benchmark finished 1.14% higher.
Hong Kong
Asian markets struggled for direction on Wednesday following wobbly investor confidence after sharp losses on Wall Street overnight. However, Hong Kong stocks traded higher, completely ignoring the overnight rout in US shares to end the day 0.63% in the green.
Japan
Japan’s Nikkei plunged 0.40%, staying on track for its lowest level in one month as energy and electronics stocks took a hard knock that shook the markets on Wednesday. The Nikkei share average ended the day 0.25% lower at 21 528.50 points.
Rand
The local currency strengthened against major global currencies on Wednesday, following the release of positive local economic data. October’s inflation rate came in at 5.10% in line with market consensus. Meanwhile, core inflation output was slightly lower than expected at 4.20%. At 18h00 the rand traded R13.90 against the dollar.
Precious metals
Gold prices pushed higher on Wednesday amid a weakened dollar environment following the previous session’s rally, though gains were capped by a sudden recovery from a sell-off in equity markets. Spot gold was up 0.49% at $1 227.20 an ounce.
Oil
Oil prices surged on Wednesday recovering some of Tuesday’s epic 6% loss, following an unexpected decline in US crude inventories. At 18h45 benchmark Brent crude was trading at $64.153 a barrel.
The local bourse posted gains on Wednesday, recovering from Tuesday's 2.50% plunge, lifted by a firmer rand, as some risk-on trade returned to the market. Meanwhile, inflation for October came out largely as expected. The data comes ahead of the SA Reserve Bank's interest-rate decision on Thursday. At 19h20 the JSE All Share closed 0.49% higher.
United States
US stocks rebounded from a ruthless two-day selloff on Wednesday as strong earnings from retail giant Foot Locker and gains in technology stocks boosted investor sentiment and somewhat revived confidence ahead of the Thanksgiving holiday. The Dow was up 0.67% at 19h15.
Europe
European stocks pushed higher on Wednesday, recovering from Tuesday’s hefty losses, but doing little to help investor confidence as concerns over trade wars, Brexit and the Italian budget row remained spikes in the eyes of the investor. The pan-European STOXX 600 benchmark finished 1.14% higher.
Hong Kong
Asian markets struggled for direction on Wednesday following wobbly investor confidence after sharp losses on Wall Street overnight. However, Hong Kong stocks traded higher, completely ignoring the overnight rout in US shares to end the day 0.63% in the green.
Japan
Japan’s Nikkei plunged 0.40%, staying on track for its lowest level in one month as energy and electronics stocks took a hard knock that shook the markets on Wednesday. The Nikkei share average ended the day 0.25% lower at 21 528.50 points.
Rand
The local currency strengthened against major global currencies on Wednesday, following the release of positive local economic data. October’s inflation rate came in at 5.10% in line with market consensus. Meanwhile, core inflation output was slightly lower than expected at 4.20%. At 18h00 the rand traded R13.90 against the dollar.
Precious metals
Gold prices pushed higher on Wednesday amid a weakened dollar environment following the previous session’s rally, though gains were capped by a sudden recovery from a sell-off in equity markets. Spot gold was up 0.49% at $1 227.20 an ounce.
Oil
Oil prices surged on Wednesday recovering some of Tuesday’s epic 6% loss, following an unexpected decline in US crude inventories. At 18h45 benchmark Brent crude was trading at $64.153 a barrel.
Our daily rant..
So today is D-day for South African consumers and their budgets for the December 2018 holidays. The South African Reserve Bank (SARB) monetary policy committee (MPC) will announce the latest repurchase rate (REPO) rate later today. If the REPO rate is increased by the MPC then all banks will increasing their base lending rate called the "prime rate". And this will push up the amount of interest paid on mortgages, cars, credit cards (if they have variable interest rates) and a whole host of other interest bearing loans, for which a fixed rate has not been agreed upon by the bank and the client.
We showed yesterday that according to Taylor's rule South Africa's interest rates are to high already and this provides a reason for why the MPC should not increase interest rates. But South Africa's inflation rate as announced yesterday came in at 5.1%, edging closer to the SARB's 3% to 6% inflation target. 21 economists and analysts polled by Bloomberg were divided. 11 of the 21 predicted a 25 basis point interest rate hike, while 10 predicted no change in interest rates. Keep an eye and ear out for the MPC statement on interest rates around 3pm this afternoon.
Ps we are predicting a no change in interest rates, but its a very close call between no change and a 25 basis point interest rate hike.
We showed yesterday that according to Taylor's rule South Africa's interest rates are to high already and this provides a reason for why the MPC should not increase interest rates. But South Africa's inflation rate as announced yesterday came in at 5.1%, edging closer to the SARB's 3% to 6% inflation target. 21 economists and analysts polled by Bloomberg were divided. 11 of the 21 predicted a 25 basis point interest rate hike, while 10 predicted no change in interest rates. Keep an eye and ear out for the MPC statement on interest rates around 3pm this afternoon.
Ps we are predicting a no change in interest rates, but its a very close call between no change and a 25 basis point interest rate hike.