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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 4 June 2019
South Africa
Despite investor fears around a global recession, the local market started the week in the green thanks to broad-based gains and a strong performance by gold miners. At the closing bell, the All Share rose 1.14%.
United States
US markets started the week slow in light of regulatory risks around tech giants such as Alphabet and Amazon as well as pressures placed on the market by the tariff wars with China and now possibly Mexico. Shortly after the JSE closed, the Nasdaq was 1.57% down.
Europe
European shares closed Monday on a high thanks to the healthcare sector offsetting losses experienced by financials and the tech sector. The STOXX 600 closed 0.39% up.
Hong Kong
The ever-escalating trade dispute between China and the US heightened investor fears on Monday about a global economic slowdown and pushed Chinese and Hong Kong shares down a bearish path. The Shanghai Composite Index ended the day 0.30% in the negative.
Japan
The Nikkei dropped on Monday as investors stepped away from risk-heavy investments due to worries that the continued trade disputes with the US could plunder the world economy into a recession. At the end of trade, the Nikkei was 0.92% down.
Rand
Although experts fear a volatile week ahead for the local currency, the rand was one of the best performing emerging market currencies on Monday, brushing off the weak economic data from earlier in the day. At 20h00, the rand traded at R14.45 against the dollar.
Precious metals
Washington’s trade spats with China, the EU and possibly Mexico rattled investors on Monday, pushing them to safer investments, helping gold reach its highest level in almost two months. At 20h00, an ounce of spot gold cost $1 325.16.
Oil
The oil price had a mixed start to the week due to the US’s tariff disputes with China and Mexico, which lead to concerns around a dampened demand, and Saudi Arabia indicated to production cuts. At 20h00, a barrel of Brent crude traded at $62.79.
Despite investor fears around a global recession, the local market started the week in the green thanks to broad-based gains and a strong performance by gold miners. At the closing bell, the All Share rose 1.14%.
United States
US markets started the week slow in light of regulatory risks around tech giants such as Alphabet and Amazon as well as pressures placed on the market by the tariff wars with China and now possibly Mexico. Shortly after the JSE closed, the Nasdaq was 1.57% down.
Europe
European shares closed Monday on a high thanks to the healthcare sector offsetting losses experienced by financials and the tech sector. The STOXX 600 closed 0.39% up.
Hong Kong
The ever-escalating trade dispute between China and the US heightened investor fears on Monday about a global economic slowdown and pushed Chinese and Hong Kong shares down a bearish path. The Shanghai Composite Index ended the day 0.30% in the negative.
Japan
The Nikkei dropped on Monday as investors stepped away from risk-heavy investments due to worries that the continued trade disputes with the US could plunder the world economy into a recession. At the end of trade, the Nikkei was 0.92% down.
Rand
Although experts fear a volatile week ahead for the local currency, the rand was one of the best performing emerging market currencies on Monday, brushing off the weak economic data from earlier in the day. At 20h00, the rand traded at R14.45 against the dollar.
Precious metals
Washington’s trade spats with China, the EU and possibly Mexico rattled investors on Monday, pushing them to safer investments, helping gold reach its highest level in almost two months. At 20h00, an ounce of spot gold cost $1 325.16.
Oil
The oil price had a mixed start to the week due to the US’s tariff disputes with China and Mexico, which lead to concerns around a dampened demand, and Saudi Arabia indicated to production cuts. At 20h00, a barrel of Brent crude traded at $62.79.
Our daily update
Yesterday we covered the financial results of clothing retailer Mr Price group. They released their results on Friday and the market liked it as the stock jumped 11% on the day. Below an extract from our financial review of Mr Price Group
So based on MRP's latest financial results, is it a good time to buy there shares? Or did the massive jump in the share price on Friday take away any potential gains for investors looking to buy undervalued quality stocks? While the numbers reported were good, one has to remember it is coming off a lower base, and that the South African economy is growing very slowly and the competition in the sectors they operate in is very tough. The group's inventories increased sharply, possibly due to new stock coming in before change of seasons, or the more sinister answer could be the group is struggling to move stock so inventories are building up?
Based on their current financial results, their profit margins, their revenue growth, their strong balance sheet and cash generating capacity we value the group's shares at R203.60 a share. So at their current price we feel that Mr Price shares are close to being fully valued
Read the full article here.
So based on MRP's latest financial results, is it a good time to buy there shares? Or did the massive jump in the share price on Friday take away any potential gains for investors looking to buy undervalued quality stocks? While the numbers reported were good, one has to remember it is coming off a lower base, and that the South African economy is growing very slowly and the competition in the sectors they operate in is very tough. The group's inventories increased sharply, possibly due to new stock coming in before change of seasons, or the more sinister answer could be the group is struggling to move stock so inventories are building up?
Based on their current financial results, their profit margins, their revenue growth, their strong balance sheet and cash generating capacity we value the group's shares at R203.60 a share. So at their current price we feel that Mr Price shares are close to being fully valued
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 four very positive months on the markets the month of May bucked the trend and saw half the gains made during the first four months of the year on the JSE wiped out in one month. So what will the month of June 2019 hold for the markets? With trade war in full swing, Chinese manufacturing declining, Brexit worries continuing all we know is it is going to be a bumpy ride.
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