Market overview
The FTSE/JSE All Share closed last week at 84 351.56, increasing by 1.84%. The telecommunications and consumer discretionary sectors were the biggest contributors gaining 7.65% and 4.39% during the week. The oil & gas sector was the biggest detractor, decreasing by 1.34%. Looking at the MSCI indices, developed markets increased by 1.84% during the previous week, while emerging markets increased by 0.64% over the same period.
Big decline In SA inflation rate
South Africa’s annual inflation rate fell for the second month to 4.6% in July 2024, the softest in three years, down from 5.1% in the previous month and edging closer to the central bank’s preferred target of 4.5%. The decline was driven by lower annual rates in several categories, notably food and non-alcoholic beverages (4.5% vs 4.6% in June), transport (4.2% vs 5.5%), and housing and utilities (5.3% vs 5.5%). The annual core inflation rate, which excludes volatile items such as food, non-alcoholic beverages, fuels, and energy, eased to a two-year low of 4.3% in July, down from 4.5% the previous month.
US signals a rate cut in September
Federal Reserve Chairman Jerome Powell gave clear signals that the central bank will cut its interest rate in the September meeting during his speech at the Jackson Hole Economic Symposium. The Chairman noted that the US labour market is cooling quickly, following the softer jobs report from July and the downward revision to payrolls last week. Powell also noted that the FOMC has gained further confidence that inflation is slowing to the central bank’s 2% target, warranting a clear view that it is time to adjust monetary policy to less restrictive conditions.
Thanks to PPS Investments for the Market Overview.
Market Indicators (supplied by Sharedata.co.za)
South African rand slips at start of data-filled week
South Africa’s rand weakened early on Monday, ahead of a slew of local economic data releases this week, which could give hints on the health of the local economy. Read the Reuters report here>
Financial markets: A week of records
South African financial markets are bullish. The All Share Index on the JSE hit 84 600 points in intraday trading on Friday, while the gold price soared to $2 533 (R44 859) an ounce in intraday trading on Tuesday – reaching new record highs. Read the full report from IOL.co.za here>
SARS warning for two-pot retirement withdrawals – more rules to watch out for
The South African Revenue Service (SARS) has warned any persons who intend to withdraw from the savings pot of the imminent Two-Pot Retirement system, the taxman will take his dues. Read the full article from Businesstech.co.za here>
Asian shares rise very slightly
Major share markets turned hesitant in Asia on Monday, while the dollar and bond yields were on the wane ahead of inflation data that investors hope will pave the way for rate cuts in the US and Europe. Read the full BusinessDay report here>
Gold steady on hope for September US rate cuts
Gold prices held ground on Monday, buoyed by a weaker dollar and treasury yields after US Federal Reserve chair Jerome Powell’s dovish remarks cemented the expectation for a September rate cut. Read the full BusinessDay article here>