Market Commentary: 03 December 2024
Summary
- Global equities rose in a shortened US trading week due to Thanksgiving, supported by easing bond yields and improved investor sentiment
- US market increased by 1.1% but declined -0.5% in sterling terms due to dollar weakness
- European equities edged up 0.2%, while UK mid-caps outperformed with the FTSE 250 Index gaining 0.9% and the FTSE 100 Index up 0.3%
- Eurozone inflation for November rose to 2.3% year-on-year, driven entirely by energy base effects, with the risks tilted to the demand side
- In Europe the European Central Bank (ECB) is expected to cut rates by 25 basis points in December
- Bond yields fell across the western world; 10-year US treasury yield dropped to 4.17%, German bund yield to 2.09%, and UK gilt yield to 4.24%…
Market Commentary: 26 November 2024
Summary
- Global equities rebounded 2.2% with all sectors in positive territory
- Energy and materials outperformed while communication services and consumer discretionary lagged
- The US market rose 2.5%, driven by positive sentiment from President-elect Donald Trump’s growth-oriented policy agenda and supported by a strong dollar
- UK equities performed well, especially the large cap FTSE 100 index
- European equities were weak as Purchasing Managers Index (PMIs) – economic indicators that measure the health of key sectors of the economy – signalled economic contraction across the Eurozone
- Oil prices surged with West Texas Intermediate (WTI) oil up 6.3% to $71.24 a barrel, driven by the Russia-Ukraine conflict escalation…
Market Commentary: 12 November 2024
Summary
- Donald Trump, now president-elect, is set to become the second president in US history – and the first Republican – to serve two non-consecutive terms
- Following Trump’s win, US equities rose 4.9% to all-time highs, while US bond yields initially climbed but reversed after a 25bps (basis point) rate cut
- Trump’s proposed tax cuts and deregulation are viewed as positives for US growth and corporate profits, but global markets reacted less favourably with UK and European equities dipping slightly
- The US Federal Reserve (Fed) cut interest rates by 0.25% to a target range of 4.5%-4.75%; the policy statement removed “gained greater confidence” regarding future inflation decline, indicating potential uncertainty
Market Commentary: 05 November 2024
Summary
- Reduced expectations for rate cuts drove bond yields higher; the US 10-year Treasury yield increased to 4.38% and the UK 10-year gilt yield rose to 4.45%
- The Labour Party presented its first budget in 14 years, creating some volatility in UK markets as investors assessed the impact of fiscal changes
- US economic data was mixed, reflecting a deceleration in job growth alongside continued GDP growth
- Most global equity markets declined, with the notable exception of Japan
- The US presidential election remains too close to call.
The week ahead
- The race between Vice President Kamala Harris and former president Donald Trump is highly competitive, with polls showing a near tie for the election on Tuesday 5 November; swing states…
Market Commentary: 29 October 2024
Markets Last Week
Bond yields rose aggressively across developed markets as bets on interest rate cuts were pared back. The US 10-year Treasury yield rose 0.16% to 4.24%, while the UK 10-year Gilt yield rose 0.18% to 4.23%. At the end of September, Fed funds futures were pricing in eight rate cuts in the US by the end of next year; since then, the market has shifted to expect only five.
The softening expectations of interest rate cuts have come as economic data has surprised to the upside, pointing to a soft landing for the economy. In recent weeks the labour market in the US has shown resilience, and although unemployment has ticked up (previously triggering the Sahm rule – a recession indicator that uses the unemployment rate to signal when the US economy has entered a recession), this has been driven by people entering the workforce rather than layoffs…..
Market Expectations for the Upcoming U.S. Elections: A Positive Outlook
As the 2024 U.S. presidential election approaches, investors are turning their attention to how this pivotal political event may impact financial markets. Historically, election years have brought a degree of uncertainty to the stock market, but there are compelling reasons for investors to remain optimistic. The key to navigating this period lies in understanding historical trends, maintaining a long-term perspective, and recognizing the resilience of markets regardless of election outcomes….
Market Commentary: 22 October 2024
SUMMARY
- The European Central Bank (ECB) cut interest rates for the third time this year, highlighting progress on inflation and unexpected drops in economic activity
- European bond yields fell, with the 10-year German Bund yield down 8bps (basis points) to 2.18%
- UK inflation dropped to 1.7% in September from 2.2%, the first dip below the Bank of England’s (BoE) target since April 2021
- US equities rose supported by utilities and real estate sectors, as did growth stocks later in the week following positive earnings
- Chinese stocks gained on better-than-expected, although still lacklustre, GDP growth data
- UK equities rose 1.3% buoyed by falling inflation and bond yields
- Oil prices fell sharply due to easing fears of an Israeli strike on Iranian energy infrastructure and OPEC’s downward revision of its global oil demand forecast for 2024…
Market Commentary: 15 October 2024
Markets Last Week
Economy
Economic data, particularly out of the US, has surprised to the upside in recent weeks, leading to notable moves in bond yields and a rotation into growth-oriented stocks at the expense of defensive sectors. Last week, recent US economic strength was compounded by rising US inflation, with September CPI inflation coming in hotter than economists had forecast. Annual core inflation, which strips out volatile food and energy prices, rose for the first time in 19 months…
Tax Free Savings
Maximising Your Tax-Free Savings Account: A Step-by-Step Guide
Tax-Free Savings Accounts (TFSAs) offer a unique opportunity for South African investors to grow their savings without the burden of taxes on interest, dividends, or capital gains. This makes TFSAs a powerful tool for achieving long-term financial goals, including retirement savings. In this article, we’ll explore how to maximise the benefits of a TFSA, illustrate a practical investment strategy, and answer common questions about this financial product…..
The 2-Pot System
At the beginning of September, the much-touted Two-Pot System came into effect in South Africa, changing the landscape of pension assets and legislating changes that will have an impact on all South Africans. So what exactly is this new system, how does it work and what are some of the key changes? Let’s take a deep dive into the Two-Pot System and try to answer as many questions as we can.
Weekly Commentary: 01 October 2024
Summary
• Chinese equities surged 15.7%, the best weekly performance since the 2008 global financial crisis
• President Xi Jinping’s administration announced broad stimulus measures
• Economists warn that structural issues in China’s economy remain unaddressed
• European equities rallied 4%, driven by optimism from China’s stimulus, with German equities benefiting the most…..
Global Interest rate Landscape and Economic Impacts
The global economic landscape is witnessing a significant shift as central banks around the world begin to adjust their monetary policies. A wave of interest rate cuts has been seen across several countries, with the aim of stimulating growth and managing inflation levels that surged in previous years. These changes have broad implications for global equity markets, bond markets, and commodities, as well as for the economic outlook of individual nations.
Time in the market
While the recent events and market performance of 2022 can stir up emotions and fear for investors, we must zoom out and view the investment landscape picture holistically
Coming out of the Global Financial Crises, the decade to come would deliver a staggering 229.35%, using the MSCI World Index measured in US Dollars
SARS Changes To The Tax Compliance Status Process
On 24 April 2023, SARS announced changes to its Tax Compliance Status process with immediate effect. Currency Partners, has compiled a comprehensive article outlining what you need to know about how it affects taxpayers.
Understanding Structured Investment Products
Structured investment products encompass a variety of vehicles that can be used to pursue a defined investment outcome, express a market view on a specific asset class, or hedge an existing exposure.
How to make sure your loved ones are taken care of and your legacy honoured
We are all familiar with the saying that you can’t take anything with you when you die. Naked, you enter the earth and naked you leave.
Market Commentary: US Jobs report and vaccination programme
Equities ended the week strongly, despite the US jobs report coming in behind expectations. Growth equities were a particular beneficiary after the non-farm payroll report was released on Friday.
Market Commentary: EU area CPI
With the US and UK markets closed yesterday, equity trading volumes were thin, with European indices posting small losses. Markets are now looking to the next fortnight with a series of key data releases ahead.
Market Commentary: 25 May 2021
Inflation expectations fell from lofty highs last week, taking the pressure off technology equities US Equity markets ended Friday down for the week but European equities outperformed, rising to within a short distance of their all-time highs
Market Commentary: 19 May 2021
Inflation was the main topic in markets last week but a strong Thursday and Friday for equities meant that indices were less aggressively down for the week in aggregate. Meanwhile, bond markets remain largely calm, even if the transitory versus sustained inflation debate feels more urgent than a few weeks ago.
Market Commentary: 12 May 2021
Markets were left baffled on Friday as the US employment report sharply missed expectations, making a US Federal Reserve (Fed) taper of asset purchases in June less likely. Equity markets rallied, with technology performing after a difficult week for growth equities.
Market Commentary: 20 April 2021
Markets pushed record highs yet again on Friday as the ‘goldilocks’ environment continued for equities with bond yields holding steady. Importantly for risk appetite, the US earnings season has started strongly and, while it’s still early days, over 80% of companies have beaten expectations so far.
Market Commentary: 13 April 2021
Markets continued their rally higher on Friday, driven by stabilised treasury yields and increased optimism over a goldilocks growth environment. In Asian trading overnight, risk appetite has faltered a little but rather than reflecting the latest news, this is more of a nod towards the key week ahead for data and earnings
The Highs and Lows of a Covid Economy
ockdown over Easter as the country battles a sharp rise in new coronavirus infections. Almost all shops will be closed from 1 to 5 April, and no more than five people over the age of 14 from two households can gather. Grocery stores would be allowed to open for one day only, on Saturday, 3 April. The country’s general lockdown measures will also be extended until 18 April.
The Covid-19:2 … Luck Of The Irish: 0
Twenty-four hours before “Paddy’s Day” 2020, the Irish government asked all pubs to cease trading. For the second year in succession, the normally boisterous celebrations have been cancelled by coronavirus curbs, and the people aren’t happy
The End Of Four Years Of Reaganism
South Africa’s long-delayed R37bn Lesotho Highlands Water Project (LHWP) — facing funding pressures, Covid-19 delays and protests in the mountain kingdom — will begin water delivery under the next phase in 2027.
Market Commentary: 05 November 2024
Summary
- Reduced expectations for rate cuts drove bond yields higher; the US 10-year Treasury yield increased to 4.38% and the UK 10-year gilt yield rose to 4.45%
- The Labour Party presented its first budget in 14 years, creating some volatility in UK markets as investors assessed the impact of fiscal changes
- US economic data was mixed, reflecting a deceleration in job growth alongside continued GDP growth
- Most global equity markets declined, with the notable exception of Japan
- The US presidential election remains too close to call.
The week ahead
- The race between Vice President Kamala Harris and former president Donald Trump is highly competitive, with polls showing a near tie for the election on Tuesday 5 November; swing states…
