The South African market is expected to play catch-up

The South African market is expected to play catch-up with international markets for the rest of our short four-day week.

The South African market is expected to play catch-up


The local currency also strengthened against most currencies, with the rand trading at R14.81 against the USD. This bodes well for South African consumers, as a stronger rand and a weaker oil price offer strong indications of fuel price cuts in the next cycle. 

It is time for us to bounce back from the long weekend with an overview of last week’s economic news: 

Two oil tankers were attacked in the Gulf of Oman on Thursday, just outside the Strait of Hormuz, the strategically vital chokepoint at the entrance to the Persian Gulf. About a third of the world’s crude oil supplies and nearly a fifth of its natural gas pass through these waters. Thursday’s attacks follow four others in the region a month ago and have raised tensions between the US and Iran. Oil prices rose by 4% on Thursday morning in the aftermath of the incident. Despite the incident, the price of Brent crude recovered and closed the week 3% weaker at around $61 per barrel. 

The local currency also strengthened against most currencies, with the rand trading at R14.81 against the USD. This bodes well for South African consumers, as a stronger rand and a weaker oil price offer strong indications of fuel price cuts in the next cycle. 

In the past week, equity markets traded in a narrow band. The JSE all-share index (ALSI) rose 0.19%, with the local market improving on the back of large-cap shares, and the Top 40 Index closing 0.37% stronger. International markets traded in the same region, with the US S&P 500 Index closing 0.47% stronger. The UK FTSE 100 gained 0.19%, while in Europe the CAC 40 added 0.07%. Markets in the East had a strong week, with the Nikkei closing 1.11% up and the Shanghai Composite Index gaining 1.92%. 

Markets expect fresh stimulus measures to be put in place in the months ahead, with China expected to lead the way. Vice Premier Liu He again hinted broadly that China has plenty of policy tools with which to deal with the challenges presented by the ongoing trade battle with the United States. In the meantime, chances of rate cuts in the US are increasing with all eyes on the Federal Open Market Committee (FOMC) meeting schedule for the end of July. If the US were to cut rates and the South African inflation rate could be brought under control, the South African Reserve Bank could well be in a position to cut local rates too. 

In the UK, former London Mayor Boris Johnson secured the highest number of votes in the first MP’s ballot to select the Conservative Party leader and next prime minister in the place of Theresa May.

The South African market is expected to play catch-up with international markets for the rest of our short four-day week. 


Kind regards,

 

SECURITAS – Wealth Management
















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


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