Market overview
The FTSE/JSE All Share closed last week at 79 922.69, decreasing by 2.16%. The consumer staples sector was the lone contributor gaining 1.07% during the week. The telecommunication and technology sectors were the biggest detractors, decreasing by 6.44% and 5.98% respectively during the same period.
Looking at the MSCI indices, developed markets decreased by 2.02% during the previous week while emerging markets decreased by 2.96% over the same period.
SA rates remain unchanged
The Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) once again opted to keep rates on hold this month. Although risks to the inflation outlook are considered balanced, the Consumer Price Index (CPI) is still above the MPC’s target of 4.5%, hence its continued conservative stance. Although the MPC expects inflation to reach 4.5% only mid-2025, our sense is consumers could see some interest rate relief before that.
Unlike the previous three meetings, the decision to keep rates on hold was not unanimous, with two MPC members preferring a 25-basis points rate reduction, which signals MPC members are beginning to shift. A dovish stance from the SARB would be in keeping with what is happening elsewhere around the world, where a growing number of Central Banks have already cut rates. This includes several countries in Europe, South America as well as Canada.
Biden withdraws from US presidential race
One week after the assassination attempt of Donald Trump, US President Joe Biden has decided to withdraw from the 2024 presidential race and endorse Vice President Kamala Harris as the Democratic Party’s nominee. The news is likely going to drive up volatility over the short-term as markets digest the news.
Thanks to PPS Investments for the weekly Market Overview.
Investors and the rand take in Joe Biden’s historic action to step down from US race
The rand was weakened on Monday morning when compared to its close on Friday as the world reacts to President Joe Biden dropping out of the US elections. The rand was trading at around R18.32 against the dollar at 8.30am. The ZAR closed at R18.18 to the dollar on Friday at 5pm. Read the full IOL.co.za article here>
Hidden force behind rand strength
Central banks in 37 emerging markets have begun cutting interest rates before the Federal Reserve and South Africa’s Reserve Bank, making local assets more attractive and strengthening the rand. Read the full dailyinvestor.com article here>
Dollar slips as Biden quits race, China bonds gain: Markets wrap
The dollar slid and Treasuries rose after Joe Biden ended his reelection campaign and endorsed Vice President Kamala Harris. European stock futures pointed to gains at open. Read the full Moneyweb article here>
Gold firms as Joe Biden’s withdrawal leaves markets worried
Gold prices firmed on Monday as the dollar eased following US President Joe Biden’s decision to withdraw from the 2024 presidential race, with investors turning to bullion as a hedge against an uncertain political and market outlook. Read the full BusinessDay article here>
Oil prices rise as China cuts interest rates; Gaza ceasefire in focus
Oil prices rose in Asian trade on Monday, recovering some measure of recent losses on hopes of improving economic conditions in top importer China after the country unexpectedly lowered borrowing costs. Read the full Investing.com article here>
Asian shares fall as investors unimpressed by China’s rate cut
Asian shares slid anew on Monday, getting little lift from a surprise rate cut by China’s central bank, while Wall Street futures firmed in the wake of President Joe Biden’s decision to bow out of the election race. Read the full BusinessDay article here>