Local markets continue their downward trend

Wealth

Local markets continue their downward trend

The equity market drama comes amid recent violent surges in US Treasury yields and rising trade tensions. As the earnings season begins in the US, fear is mounting that these forces will cut into corporate profits and will sound the death knell for growth stocks. 

During the past week, local markets continued their downward trend that started with the emerging market selloff when the Turkish currency came under pressure, which was almost immediately followed by the US equity market downturn.

The equity market drama comes amid recent violent surges in US Treasury yields and rising trade tensions. As the earnings season begins in the US, fear is mounting that these forces will cut into corporate profits and will sound the death knell for growth stocks. Meanwhile, a strong US dollar and heavy debt loads in many emerging markets, together with the trade turmoil, are leading to lower estimates for global economic expansion.

The JSE all-share index (ALSI) lost another 2.56% the past week, which means to date the total loss for October comes to 6.30%. The industrial sector closed 4% lower, while the resources sector lost 2.15% in value for the week. Most of these losses may be attributed to international events.

Developed markets took a breather after being decimated the first two weeks of the month. The S&P closed unchanged after losing 5.02% in the first two weeks of October. In Europe, the FTSE 100 gained 0.77% but is still 6.13% down for the month. The DAX closed 0.46% higher, although the total loss for October is 6.03%.

In China, the Shanghai index closed 2.17% lower, bringing the total loss for October to a massive 9.60%.

The rand strengthened to around R14.38 against the USD, while the Brent crude price stood at $79.31 per barrel. 

Next week, some 1 000 investors will attend President Cyril Ramaphosa’s Investment Summit where they will interact directly with regulators and cabinet ministers in an effort to unlock large amounts of money to get the South African economy going.

In the same week, Minister Tito Mboweni will deliver the midterm budget, which is expected to have a huge impact on the decision of Moody’s, the last rating agency that holds South Africa at investment grade.

 

Kind regards.

 

SECURITAS – Wealth Management



















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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;

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