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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 October 2019
South Africa
The JSE closed higher on Monday, tracking most global markets as investor sentiment rose after some positive comments in the US-China trade war. The JSE closed 0.70% in the green.
United States
The S&P 500 and Nasdaq rose on Monday as technology stocks were bolstered by signs of progress in the prolonged US-China trade dispute, while losses in Boeing capped gains in the blue-chip Dow Jones Industrials. The Nasdaq was trading up by 0.83% at 20h30.
Europe
European shares climbed on Monday, as investors hoped that Britain could avoid a disorderly exit from the European Union. Positive corporate updates and comments on the US-China trade talks added to the upbeat mood. Just after the JSE closed the FTSE 100 added 0.22%, France’s CAC 40 0.47% and Germany’s DAX 1.07%.
Hong Kong
Shares in Hong Kong closed flat on Monday, amid concerns around political protests in the city. The Hang Seng was unchanged at 26 725.68 index points.
Japan
Japanese shares edged up on Monday though uncertainty about Britain’s exit from the European Union kept many investors on the side-lines. The Nikkei rose 0.25%.
Rand
The rand was weaker against the pound on Monday as markets waited for more clarity regarding Brexit. British Prime Minister Boris Johnson asked the EU to extend the 31 October Brexit deadline after MPs voted against Johnson's proposed Brexit deal on Saturday. At 20h30, a pound traded at R19.14.
Precious metals
Gold prices remained steady on Monday, as investors stayed on the side-lines awaiting more clarity on US-China trade negotiations and a delay to a crucial vote on a deal on Britain’s exit from the EU. An ounce of spot gold traded at $1 484.44 at 20h30.
Oil
Oil prices eased on Monday amid persistent concerns about the global economic outlook and the impact on oil demand, while Russia again missed its target to cut oil output last month. At 20h30, a barrel of Brent crude traded at $59.34.
The JSE closed higher on Monday, tracking most global markets as investor sentiment rose after some positive comments in the US-China trade war. The JSE closed 0.70% in the green.
United States
The S&P 500 and Nasdaq rose on Monday as technology stocks were bolstered by signs of progress in the prolonged US-China trade dispute, while losses in Boeing capped gains in the blue-chip Dow Jones Industrials. The Nasdaq was trading up by 0.83% at 20h30.
Europe
European shares climbed on Monday, as investors hoped that Britain could avoid a disorderly exit from the European Union. Positive corporate updates and comments on the US-China trade talks added to the upbeat mood. Just after the JSE closed the FTSE 100 added 0.22%, France’s CAC 40 0.47% and Germany’s DAX 1.07%.
Hong Kong
Shares in Hong Kong closed flat on Monday, amid concerns around political protests in the city. The Hang Seng was unchanged at 26 725.68 index points.
Japan
Japanese shares edged up on Monday though uncertainty about Britain’s exit from the European Union kept many investors on the side-lines. The Nikkei rose 0.25%.
Rand
The rand was weaker against the pound on Monday as markets waited for more clarity regarding Brexit. British Prime Minister Boris Johnson asked the EU to extend the 31 October Brexit deadline after MPs voted against Johnson's proposed Brexit deal on Saturday. At 20h30, a pound traded at R19.14.
Precious metals
Gold prices remained steady on Monday, as investors stayed on the side-lines awaiting more clarity on US-China trade negotiations and a delay to a crucial vote on a deal on Britain’s exit from the EU. An ounce of spot gold traded at $1 484.44 at 20h30.
Oil
Oil prices eased on Monday amid persistent concerns about the global economic outlook and the impact on oil demand, while Russia again missed its target to cut oil output last month. At 20h30, a barrel of Brent crude traded at $59.34.
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Our daily update
Yesterday our sister site covered on of our favourite company's latest earnings report. Below an extract on the article taking a look at the latest results of Union Pacific
The railroad's diversified business mix is classified into its Agricultural Products, Energy, Industrial and Premium business groups. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel efficient and environmentally responsible manner
Union Pacific Railroad Fast Facts(For Full Year 2018)
Valuation of Union Pacific (UNP)
Based on Union Pacific's latest earnings report and their outlook our valuation model provides a target (full value) price at $162.4 per Union Pacific stock (down from our 2nd quarter 2019 earnings report valuation of Union Pacific). We therefore believe the stock of Union Pacific is close to fully valued considering their stock price of $166
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $162.40. We therefore believe a good entry point into Union Pacific is at $146.20 or below. Since the stock of Union Pacific is close to being fully valued we expect the stock to trade mostly sideways in coming weeks and months until there is a new catalyst to drive the group's stock price in particular direction.
Read the full Union Pacific earnings review here
The railroad's diversified business mix is classified into its Agricultural Products, Energy, Industrial and Premium business groups. Union Pacific serves many of the fastest-growing U.S. population centers, operates from all major West Coast and Gulf Coast ports to eastern gateways, connects with Canada's rail systems and is the only railroad serving all six major Mexico gateways. Union Pacific provides value to its roughly 10,000 customers by delivering products in a safe, reliable, fuel efficient and environmentally responsible manner
Union Pacific Railroad Fast Facts(For Full Year 2018)
- Route Miles: 32,200
- Employees: 42,000
- Annual Payroll: $4.3 billion
- Capital Spending :$3.2 billion
- Capital Spending 2009-2018: $34 billion
- Locomotives: 8,300
- Customers: 10,000
Valuation of Union Pacific (UNP)
Based on Union Pacific's latest earnings report and their outlook our valuation model provides a target (full value) price at $162.4 per Union Pacific stock (down from our 2nd quarter 2019 earnings report valuation of Union Pacific). We therefore believe the stock of Union Pacific is close to fully valued considering their stock price of $166
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $162.40. We therefore believe a good entry point into Union Pacific is at $146.20 or below. Since the stock of Union Pacific is close to being fully valued we expect the stock to trade mostly sideways in coming weeks and months until there is a new catalyst to drive the group's stock price in particular direction.
Read the full Union Pacific earnings review here
Union Pacific train flying along
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 2.41%. Question is whether it can hold on to the gains made for the rest of the month. There seems to be a softening of the trade wars rhetoric as both the USA and China looks to avoid further damage being caused to their economies and it looks like the UK might be striking a deal with the EU to leave the EU. Seems Brexit might finally be happening
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