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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 31 May 2019
South Africa
Led by a strong showing by banks and retailers, the JSE pushed higher on Thursday as investors digested President Cyril Ramaphosa’s new and downsized cabinet. Shortly after the closing bell, the All Share gained 1.28%.
United States
US shares enjoyed gains on Thursday following Trump’s announcement that the infamous trade negotiations with China “are doing well”, easing fears of a full-blown trade war amongst investors. At 19h00, the Dow had gained 0.33%.
Europe
Lifted by better-than-expected earnings from a number of media companies, European shares edged higher on Thursday, however, the main regional index was on track for its first monthly decline of the year due to low financing costs. At 19h15, the pan-European Stoxx 600 lost 0.42%.
Hong Kong
Shares in Hong Kong fell to a four-month low on Thursday as Beijing showed no signs of conceding to Trump’s demands, fuelling the trade dispute with Washington even after the leader of the “free world” said negotiations were on track. At 19h20, the Hang-Seng lost 0.50%.
Japan
Japan’s Nikkei plunged to a 3-month low on Thursday amid mounting concerns of the impact of a protracted trade war between two of the world’s biggest superpowers. At the closing bell, the Nikkei had lost 0.29%.
Rand
The rand was firmer on Thursday after the announcement of Ramaphosa’s new cabinet as he attempts to root out corruption and implement pro-economic growth reforms. At 19h30, the rand traded R14.69 at against the dollar.
Precious metals
Gold markets endured a choppy day of trade on Thursday amid a strengthened dollar environment which offset the support from the US-Sino trade dispute for most of the day, only to end in the green thanks to low bond yields. At 19h40, spot gold was up trading at $1 288.04 an ounce.
Oil
Oil prices slipped on Thursday after fears of a global economic slowdown resurfaced with losses trimmed by a tight crude oil supply and political instability in the Middle East. At 19h45, a barrel of Brent crude was trading at $67.02.
Led by a strong showing by banks and retailers, the JSE pushed higher on Thursday as investors digested President Cyril Ramaphosa’s new and downsized cabinet. Shortly after the closing bell, the All Share gained 1.28%.
United States
US shares enjoyed gains on Thursday following Trump’s announcement that the infamous trade negotiations with China “are doing well”, easing fears of a full-blown trade war amongst investors. At 19h00, the Dow had gained 0.33%.
Europe
Lifted by better-than-expected earnings from a number of media companies, European shares edged higher on Thursday, however, the main regional index was on track for its first monthly decline of the year due to low financing costs. At 19h15, the pan-European Stoxx 600 lost 0.42%.
Hong Kong
Shares in Hong Kong fell to a four-month low on Thursday as Beijing showed no signs of conceding to Trump’s demands, fuelling the trade dispute with Washington even after the leader of the “free world” said negotiations were on track. At 19h20, the Hang-Seng lost 0.50%.
Japan
Japan’s Nikkei plunged to a 3-month low on Thursday amid mounting concerns of the impact of a protracted trade war between two of the world’s biggest superpowers. At the closing bell, the Nikkei had lost 0.29%.
Rand
The rand was firmer on Thursday after the announcement of Ramaphosa’s new cabinet as he attempts to root out corruption and implement pro-economic growth reforms. At 19h30, the rand traded R14.69 at against the dollar.
Precious metals
Gold markets endured a choppy day of trade on Thursday amid a strengthened dollar environment which offset the support from the US-Sino trade dispute for most of the day, only to end in the green thanks to low bond yields. At 19h40, spot gold was up trading at $1 288.04 an ounce.
Oil
Oil prices slipped on Thursday after fears of a global economic slowdown resurfaced with losses trimmed by a tight crude oil supply and political instability in the Middle East. At 19h45, a barrel of Brent crude was trading at $67.02.
Our daily update
Yesterday we covered South Africa's crude oil imports inflation and the impact this has on overall levels of inflation and ultimately South Africa's monetary policy. Below an extract from the article
A worry for monetary policy officials who keep an eye on inflation is the erratic crude oil price which in turn affects the fuel price, as its hard to predict the this it is hard to estimate the overall longer term trends in inflation, which could lead to the monetary policy committee of the South African Reserve Bank (SARB), making policy decisions based on dodgy prediction models of crude, fuel and in the end inflation. They should therefore be careful to place to much emphasis on prediction models and continue to look at actual rates of inflation measured and focus on core inflation (which excludes volatile items such as crude oil and electricity and other erratic prices).
Read the full article here.
A worry for monetary policy officials who keep an eye on inflation is the erratic crude oil price which in turn affects the fuel price, as its hard to predict the this it is hard to estimate the overall longer term trends in inflation, which could lead to the monetary policy committee of the South African Reserve Bank (SARB), making policy decisions based on dodgy prediction models of crude, fuel and in the end inflation. They should therefore be careful to place to much emphasis on prediction models and continue to look at actual rates of inflation measured and focus on core inflation (which excludes volatile items such as crude oil and electricity and other erratic prices).
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.
The month of May continues to be negative, and this after 4 months of positive returns for the JSE All Share Index. As can be seen from the Calendar chart above the number of red blocks far outnumber the number of green blocks. It has been a pretty miserable month so far on the JSE, and May has wiped out almost half of the returns the market made in the first 4 months of 2019. Seems like sell in May and stay away is holding true. While the last few trading days in May has turned positive, especially after President Ramaphosa's cabinet announcement it looks like the month of May will end solidly in the red.
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