Market overview
The FTSE/JSE All Share closed last week at 89 486.81, increasing by 3.61%. The health care and financials sectors were the biggest contributors increasing by 7.39% and 5.14% respectively during the previous week. Looking at the MSCI indices, developed markets increased by 0.16% during the previous week, while emerging markets increased by 2.29% over the same period.
Markets are bracing for another turbulent week after Trump took to social media to criticise the Federal Reserve’s reluctance to cut interest rates and threatened to remove Fed Chair Jerome Powell. The Fed’s independence is widely regarded as essential, not only for the credibility of U.S. stock and bond markets, but for the stability of the U.S. dollar.
Strong GDP growth in China
China’s economy grew 5.4% year-on-year in Q1 of 2025, maintaining the same pace as in Q4 and exceeding market expectations of 5.1%. It remained the strongest annual growth rate in 1-1/2 years amid Beijing’s ongoing stimulus. The latest GDP readings were also buoyed by robust March activity: industrial output rose at its fastest pace since June 2021, retail sales posted the biggest gain in over a year, and the surveyed jobless rate eased from a two-year high. However, intensifying trade tensions with the U.S. have quickly darkened the outlook, adding pressure on Beijing to introduce further support measures
US FED cautious amid inflation risk
Fed policymakers expect inflation to be pushed higher this year due to the impact of elevated tariffs, as shown by minutes from the last FOMC meeting. Nearly all participants viewed inflation risks as tilted to the upside, while risks to employment were seen as skewed to the downside. The Fed kept interest rates unchanged at its March meeting. It also raised its inflation forcasts for 2025 and 2026 and lowered its growth outlook for 2025. Despite this, the Fed still expects to cut interest rates by about 50 basis points this year, in line with its December forecast.
Thanks to PPS Investments for the weekly Market Overview.
Financial Indicators by Sharedata.co.za
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