15 January 2024
6/10/2024: JSE (-1.42%): The JSE index ended the week lower due to escalating tensions in the Middle East, despite positive economic data from the US and South Africa. An Iranian missile strike on Israel, part of retaliation for the deaths of Hamas and Hezbollah leaders, marked a significant intensification of Israel-Iran tensions. Locally, the ABSA PMI showed growth in South Africa's manufacturing sector, and the S&P Global PMI indicated the fastest private sector growth since August 2023. In the US, stronger services PMI and non-farm payroll reports supported the Federal Reserve’s “soft landing” goal. Optimism about South Africa's economy remains strong, fuelled by the new coalition government, expected reforms, and potential benefits from China's stimulus measures.
13/10/2024: JSE (-0.21%): The JSE remained flat in the second week of October amid ongoing Middle East tensions and unclear Chinese stimulus plans. Global markets were disappointed by the lack of clarity from China, affecting investor sentiment. US economic data suggested a less aggressive rate-cutting approach by the Federal Reserve. South Africa's mining output showed a modest recovery, while manufacturing activity contracted. The South African Reserve Bank (SARB) made its first rate cut since 2020 and is expected to continue cautious easing.
20/10/2024: JSE (+1.22%): The JSE rebounded this week, supported by China's new stimulus measures, strong US earnings, and the SARB's lower inflation target. Despite positive trends post-election, South Africa's business confidence index fell, and the SARB's monetary review gave a cautious outlook. Governor Lesetja Kganyago emphasised a targeted inflation range to boost investor confidence. US economic data showed resilience, and gold prices rose above $2,700 per ounce. China's central bank announced stock market support through share buybacks. In other news, former SARB governor Tito Mboweni passed away after a brief illness.
27/10/2024: The JSE ended the week slightly lower (-0.21%) due to weaker global markets, anticipated smaller rate cuts from the US Federal Reserve, and uncertainties regarding Donald Trump’s presidential race. Domestically, the composite leading business cycle indicator fell by 0.7% in August, marking the largest decline in five months. The IMF raised South Africa’s growth forecast to 1.1% for this year and 1.5% for next year, though it warned that geopolitical and trade tensions could reduce global output by up to 0.5%. The inflation rate dropped to 3.8% in September, and another rate cut is expected in November. PGM stocks saw significant gains following potential sanctions on Russian exports and US regulatory changes benefiting PGM miners.
3/11/2024: JSE (-0.94%): The South African market declined due to weaker US job openings data, which suggested a labour market slowdown and raised expectations for more gradual Federal Reserve rate cuts. Finance Minister Enoch Godongwana forecasted larger fiscal deficits and rising debt despite improved growth projections, emphasising government-private sector infrastructure partnerships. Producer price inflation fell to 1% in September, and a trade surplus of ZAR 12.8 billion was recorded. The resource sector fell nearly 4% due to lower precious metals prices, however overall market sentiment was supported by limited impacts from Israel’s military strikes on Iran and threats to global energy supplies.
10/11/2024: The JSE (-1.25%) declined this week due to concerns over Donald Trump's election win and its impact on South Africa. Commodity prices fell sharply after his victory, with investors moving toward the safe-haven dollar, causing the rand and other emerging market currencies to weaken. Trump's "America First" policies raised fears for emerging markets, particularly large exporters. Despite a drop in South Africa's annual inflation to 3.8%, the rand weakened. Protests in Mozambique also contributed to market instability.
17/11/2024: JSE (-1.47%): The market experienced its fourth consecutive week of losses due to concerns about President-elect Donald Trump’s policies and disappointment over China's economic stimulus. South Africa's unemployment rate fell to 32.1% in the third quarter of 2024, the first decline since the third quarter of 2023. However, manufacturing output dropped by 0.8% year-on-year in September. In the US, consumer inflation rose in October, but expectations for a Federal Reserve rate cut in December remained unchanged. The rand stayed near its weakest level in three months, despite a positive note with South Africa’s mining output growing for the second straight month in September. Inflation fell to 3.8% in September, supporting expectations for a 25-basis-point rate cut by the SARB in November.
24/11/2024: JSE (+2.07%): The JSE saw its second-largest rebound of the quarter after a tough four weeks of losses, driven by positive investor reactions to South Africa’s improved credit rating outlook. S&P Global upgraded the outlook from "stable" to "positive," citing economic reforms and increased private investment under the new government. Inflation dropped to 2.8% in October, its lowest in over four years, primarily due to falling fuel prices. The rand strengthened following a 25-basis-point interest rate cut by the SARB. Geopolitical tensions rose with the Ukraine using US-supplied missiles against Russian targets, while President Putin expanded conditions for nuclear weapons use. Strong US PMI data suggested the Federal Reserve might slow its pace of monetary easing.
1/12/2024: JSE (-1.28%): The South African market ended the week lower following concerns over Donald Trump's appointment of Scott Bessent as Treasury secretary, amid worries that Trump’s protectionist trade policies could impact the market. Locally, the Economic Freedom Fighters (EFF) sought to revive impeachment proceedings against President Cyril Ramaphosa over the "Farmgate" scandal. October saw the budget deficit widen to R46.08 billion, while the trade surplus increased to R14.63 billion. M3 money supply growth accelerated, but credit growth slowed. The central bank warned about risks posed by deteriorating infrastructure, and Johann Rupert, chairman of Richemont, emphasised the need to extend the trade pact for duty-free access to the US for South Africa and other African nations.
8/12/2024: JSE (+2.87%): The JSE saw its highest quarterly gain despite conflicting economic signals. Concerns arose from President-elect Donald Trump’s warning of 100% tariffs on BRICS imports if they proceed with a joint currency. In South Africa, the Absa PMI dropped to 48.1 in November, indicating a manufacturing contraction. Capitec processed R25.4 billion in payments on Black Friday, benefiting retailers like Shoprite, Takealot, and Shein. The economy contracted by 0.3% in the third quarter, mainly due to a drought-affected 28% drop in the agriculture sector. However, the S&P Global South Africa PMI rose to 50.9, marking four months of expansion. Moody's maintained South Africa's Ba2 credit rating, noting the resilient financial sector. The current account deficit narrowed to ZAR 70.8 billion in the third quarter, and foreign exchange reserves hit a record $65.859 billion. US job growth slowed but still did not trigger inflation concerns.
15/12/224: JSE (+0.22%): The South African stock market showed a slight increase, with the rand reaching its best level in nearly two months, supported by a commodity rally and higher gold prices. Business confidence in the retail sector hit a three-year high, and manufacturing production grew by 0.8% year-on-year in October. Mining production rose by 1.4%, marking three consecutive months of growth, although gold production continued to decline. The SACCI business confidence index increased to its highest since October 2015. Annual consumer inflation rose slightly to 2.9% in November, while producer prices continued their deflationary trend, declining by 0.1%. Investors remained attracted to South African fixed-income due to political stability and an improved post-election economic outlook.
22/12/2024: JSE (-2.90%): The South African market saw significant volatility as the US Federal Reserve cut rates by 25 basis points, raising treasury yield and impacting global equities. Federal Reserve Chair, Jerome Powell, indicated a cautious future approach, disappointing traders seeking aggressive rate cuts in 2025. Despite risks to the local currency, TreasuryONE currency strategist Andre Cilliers pointed out that the rand's resilience was supported by stronger terms of trade, growing optimism around structural reforms, state-owned enterprise privatisation, and positive sentiment toward the coalition government’s reform agenda. "If the Fed adopts a hawkish stance, the rand could face pressure," Cilliers warned. US inflation data showed a slight rise to 2.4% in November, maintaining a moderate Federal Reserve stance. Locally, retailers benefited from improved sentiment driven by better economic prospects and low food inflation. Additionally, Botswana's new president announced plans to lift the ban on South African vegetables by April, aiding regional trade and South Africa’s agricultural sector.
29/12/2024: JSE (+0.16%), Monday 31/12/2024 (+0.13%): The rand ended a four-day losing streak on the last trading day of 2024, strengthening by 0.64% to R18.69/$ after hitting its weakest level since August. Rising US treasury yield and reduced expectations of a Fed rate cut boosted the dollar, putting pressure on emerging market currencies. Locally, political instability within the government of national unity (GNU) posed a threat to the rand's strength, particularly disagreements over the Basic Education Laws Amendment (Bela) Act, which President Cyril Ramaphosa signed into law. Despite securing its AGOA benefits for another year, analysts noted uncertainties under the incoming Donald Trump administration, especially as it covers about 20% of the country’s exports to the US, or 2% of its total global shipments. Looking ahead to 2025: Markets are likely to focus on the Federal Reserve’s interest rate strategy and the potential impacts of Donald Trump's return to the presidency in 2025.
