Global & Local Markets March 2018

The main drivers of negative return came from the United States, where warnings of tariffs on imported goods are expected to spark a trade war.

March was a particularly negative month for global equity markets. The main drivers of negative return came from the United States, where warnings of tariffs on imported goods are expected to spark a trade war. Moreover, the US Federal Reserve introduced its first interest rate hike and indicated that another two hikes could follow in 2018.

The Dow Jones Industrial Average was a negative 3.7% for March, while the tech-heavy NASDAQ lost 2.88%. The S&P 500 closed 2.54% lower for the month.

The old saying that when America sneezes the entire world catches a cold applies in this instance, as European markets followed the negative trend. The CAC 40 lost 2.88%, followed by the DAX with a loss of 2.73%.  In London, the FTSE closed with a loss of 2.59%.

The local markets also responded by trading down sharply, with the JSE all-share index (ALSI) closing 6.11% down for the month in response to international investors exiting emerging markets. The financial and industrial sectors lost 6.12% and 5.83% respectively.

However, the past week offered some glimmers of hope in a volatile market with the decision by the Monetary Policy Committee of the SA Reserve Bank to cut interest rates by 25 basis points. This brings the repo rate to 6.5% and the prime lending rate to 10%.

Economic growth in the United States was revised to a 2.9% annual rate in the final quarter of 2017, up from the 2.5% pace reported last month. Economists had expected growth to finish the year at 2.7% as the available data indicated robust consumer spending and an uptick in inventories. The economy grew by 2.3% for the entire 2017, after growing 1.5% in 2016.

The volatility in the markets is expected to continue and investors are cautioned that although the outlook for the rest of the year remains positive, the impact of market-moving news flows needs to be considered as well.

Motorists are reminded to fill up their fuel tanks in good time, as the levy of 52c per litre that applies to both petrol and diesel comes into effect on Wednesday.

Regards

Johan Steyn

Regards,

SECURITAS – Wealth Management





















Market data provided by I-Net | News article provided by Securitas with 4D Wealth

Securitas Financial Group is a Registered Financial Services Provider (FSP) FSB license number 6536

Johan Steyn, RFP®, Cell. 082 680 9510, johan@securitas.co.za;  

Albert van der Linde, B.Com (US), B.Com (Hons)(UP), Cell. 076 087 3084, albert@securitas.co.za;

Hannes Bresler, CFP®, B.Com (Hons)(UJ), Pr.Tech Eng, Cell. 082 823 7973, hannes@securitas.co.za;

Henro Grové, B.Com (UP), B.Com (Hons)(UP), Cell. 083 945 3578, henro@securitas.co.za;

Michelle Kleinhans, 082 850 3092, michelle.kleinhans@securitas.co.za