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PSG daily investment update 3 May 2019
Date: 3 May 2019 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 3 May 2019
South Africa
Despite a weaker rand, the JSE made up losses from the previous trading session on Thursday thanks to the strong performance by banks and financials. At the close of trade, the All Share was 0.37% in the green.
United States
On Thursday, US markets eased gains as investors digested the US Federal Reserve Bank’s (Fed) decision to keep US interest rates unchanged at 2.50%, and oil shares plummeted. Shortly after the JSE closed, the Dow was 0.83% down.
Europe
Returning from the May Day holiday, most European indices were in the negative due to the severe share-price drop in SAP, a software firm, and the Fed’s decision to avoid rate cuts. At the close of trade, the STOXX 600 was 0.58% lower.
Hong Kong
Although Chinese markets were closed on Thursday, the Hang Seng rose based on positive US-China trade war progress, the Fed’s stable interest rate views and strong performances by financials and property shares. The Hang Seng closed 0.83% up.
Japan
Markets were closed due to a public holiday.
Rand
The local currency weakened on Thursday, as did most Emerging Market currencies, on the back of the Fed’s decision to keep benchmark lending rates unchanged, and its insinuation that it is unlikely to change rates soon. At 18h10, the rand traded R14.54 against the dollar.
Precious metals
The Fed’s announcement on Wednesday night to keep the US interest rate unchanged had a dismal effect on bullion prices and mining shares on Thursday. At 18h10, spot gold was trading at $1 271.39 an ounce.
Oil
On Thursday, oil prices plummeted as concerns about oversupply rose drastically in light of the increase in US production and the slower-than-expected impact of US sanction on Iran. At 18h10, Brent crude was trading at $70.97 per barrel
Despite a weaker rand, the JSE made up losses from the previous trading session on Thursday thanks to the strong performance by banks and financials. At the close of trade, the All Share was 0.37% in the green.
United States
On Thursday, US markets eased gains as investors digested the US Federal Reserve Bank’s (Fed) decision to keep US interest rates unchanged at 2.50%, and oil shares plummeted. Shortly after the JSE closed, the Dow was 0.83% down.
Europe
Returning from the May Day holiday, most European indices were in the negative due to the severe share-price drop in SAP, a software firm, and the Fed’s decision to avoid rate cuts. At the close of trade, the STOXX 600 was 0.58% lower.
Hong Kong
Although Chinese markets were closed on Thursday, the Hang Seng rose based on positive US-China trade war progress, the Fed’s stable interest rate views and strong performances by financials and property shares. The Hang Seng closed 0.83% up.
Japan
Markets were closed due to a public holiday.
Rand
The local currency weakened on Thursday, as did most Emerging Market currencies, on the back of the Fed’s decision to keep benchmark lending rates unchanged, and its insinuation that it is unlikely to change rates soon. At 18h10, the rand traded R14.54 against the dollar.
Precious metals
The Fed’s announcement on Wednesday night to keep the US interest rate unchanged had a dismal effect on bullion prices and mining shares on Thursday. At 18h10, spot gold was trading at $1 271.39 an ounce.
Oil
On Thursday, oil prices plummeted as concerns about oversupply rose drastically in light of the increase in US production and the slower-than-expected impact of US sanction on Iran. At 18h10, Brent crude was trading at $70.97 per barrel
Our daily update
Yesterday we covered Foord Asset's managements principles for long-term investing growth. A small extract from yesterday's article can be found below.
Valuation — buy at the right price. Superior returns come from buying good companies at reasonable valuations. A company’s valuation can be compared to peers and to the market using the price-to-earnings (PE) ratio. The PE is a simple valuation metric calculated by dividing a share’s price by its EPS. While high quality firms do not typically trade at discounted PEs, it is nevertheless important to not overpay for an investment. An overpriced asset can materially reduce long-term returns. Exit a losing investment quickly. All investors, including professionals, make mistakes. But successful investors usually admit their mistakes early, exit those positions and replace them with even better prospects.
Read the full article here.
Valuation — buy at the right price. Superior returns come from buying good companies at reasonable valuations. A company’s valuation can be compared to peers and to the market using the price-to-earnings (PE) ratio. The PE is a simple valuation metric calculated by dividing a share’s price by its EPS. While high quality firms do not typically trade at discounted PEs, it is nevertheless important to not overpay for an investment. An overpriced asset can materially reduce long-term returns. Exit a losing investment quickly. All investors, including professionals, make mistakes. But successful investors usually admit their mistakes early, exit those positions and replace them with even better prospects.
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 after 4 consecutive months of positive returns on the JSE All Share Index, the month of May kicked of trading with a positive day, ending 2 May 2019 up by 0.37%. For the JSE All Share Index performance over a longer period see our 2019 Calendar tracker for more.
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
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