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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 29 August 2019
South Africa
Miners boosted the local market on Wednesday; however, investors remained fearful as weak US economic releases increased recession fears. The JSE All Share closed 0.74% up.
United States
US indices had a difficult start on Wednesday due to poor US bond market reports in conjunction with the trade war, which fueled anxieties of a possible global recession. However at 18h25, the Dow was 0.75% in the green.
Europe
European markets struggled on Wednesday, pulled down by the FTSE 100 after UK Prime Minister Boris Johnson announced plans to suspend parliament, which sent the pound on a downwards spiral. The STOXX 600 ended the day 0.20% lower.
Hong Kong
Hong Kong shares ended Wednesday down as the city’s current political turmoil weighed on risk sentiment. The Hang Seng Index decreased 0.19%.
Japan
Japanese stocks rose marginally on Wednesday led by an uptake in telecommunications and consumer-linked firms as well as drawing from stronger Wall Street futures. The Nikkei Index closed 0.11% higher.
Rand
The local currency had a difficult day on Wednesday as traders kept a cautious eye on global developments based on the protracted trade war and lack of positive global economic data. At 18h25, a dollar traded at R15.35.
Precious metals
Gold prices kept up its winning streak on Wednesday on the back of poor US economic data sparking fears of a possible recession and sending investors to safe-haven assets. At 18h25, an ounce of spot gold traded at $1 536.79.
Oil
Oil rose over 2% on Wednesday after US crude producers reported a 10 million-barrel drop in stockpiles. At 18h25, a barrel of Brent crude traded at $60.62.
Miners boosted the local market on Wednesday; however, investors remained fearful as weak US economic releases increased recession fears. The JSE All Share closed 0.74% up.
United States
US indices had a difficult start on Wednesday due to poor US bond market reports in conjunction with the trade war, which fueled anxieties of a possible global recession. However at 18h25, the Dow was 0.75% in the green.
Europe
European markets struggled on Wednesday, pulled down by the FTSE 100 after UK Prime Minister Boris Johnson announced plans to suspend parliament, which sent the pound on a downwards spiral. The STOXX 600 ended the day 0.20% lower.
Hong Kong
Hong Kong shares ended Wednesday down as the city’s current political turmoil weighed on risk sentiment. The Hang Seng Index decreased 0.19%.
Japan
Japanese stocks rose marginally on Wednesday led by an uptake in telecommunications and consumer-linked firms as well as drawing from stronger Wall Street futures. The Nikkei Index closed 0.11% higher.
Rand
The local currency had a difficult day on Wednesday as traders kept a cautious eye on global developments based on the protracted trade war and lack of positive global economic data. At 18h25, a dollar traded at R15.35.
Precious metals
Gold prices kept up its winning streak on Wednesday on the back of poor US economic data sparking fears of a possible recession and sending investors to safe-haven assets. At 18h25, an ounce of spot gold traded at $1 536.79.
Oil
Oil rose over 2% on Wednesday after US crude producers reported a 10 million-barrel drop in stockpiles. At 18h25, a barrel of Brent crude traded at $60.62.
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Our daily update
Yesterday our sister website covered the latest earnings report of Brown-Forman the owner of Jack Daniels and el Jimador tequila. Below a few extracts from the article.
Fiscal Year 2020 Outlook
Growing uncertainty around the global economic and geopolitical environment combined with the competitive landscape in the developed world could impact our future results. Despite these factors, the company is reaffirming its prior full year fiscal 2020 guidance of:
1. Underlying net sales growth of 5% to 7%.
2. Underlying operating income growth of 3% to 5%.
3. Diluted earnings per share of $1.75 to $1.85
Based on the group's earnings report for the first quarter of their 2010 fiscal year as well as the earnings guidance provided we value the group's stock at $41.90 a share. At its current price we do feel the group's stock is overvalued and we would prefer to buy into the group and their quality assets at a price close to or below the $40 mark. Our target price for Brown-Forman of $41.90 is based on their current earnings as well as their expected earnings per share guidance provided.
Read the full Brown-Forman review here
Fiscal Year 2020 Outlook
Growing uncertainty around the global economic and geopolitical environment combined with the competitive landscape in the developed world could impact our future results. Despite these factors, the company is reaffirming its prior full year fiscal 2020 guidance of:
1. Underlying net sales growth of 5% to 7%.
2. Underlying operating income growth of 3% to 5%.
3. Diluted earnings per share of $1.75 to $1.85
Based on the group's earnings report for the first quarter of their 2010 fiscal year as well as the earnings guidance provided we value the group's stock at $41.90 a share. At its current price we do feel the group's stock is overvalued and we would prefer to buy into the group and their quality assets at a price close to or below the $40 mark. Our target price for Brown-Forman of $41.90 is based on their current earnings as well as their expected earnings per share guidance provided.
Read the full Brown-Forman review 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 -3.86% as we head towards the end of 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 based on the skittish markets we suspect that August will end well in the red.
There are continued and growing concerns about a global slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war.
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 -3.86% as we head towards the end of 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 based on the skittish markets we suspect that August will end well in the red.
There are continued and growing concerns about a global slow down largely driven by the trade ware between the US and China. Continued tariffs by the US on Chinese goods and the retaliation by China by raising tariffs on US goods keeps hurting markets and global economic growth, as the world's two biggest economies continue to stand off in this trade war.
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