Date published - 2024-05-07
(This is a very shortened version highlighting excerpts of our full report which is available for our paid subscribers).
US markets managed to end the week positively last week, saved by a late week rally after softer than expected US jobs data (see Economic section). The S&P 500 (+0.27%), Dow (+1.03%), and Nasdaq Composite (+1.2%) all recorded gains. Earnings releases from tech giants Apple (+8.3%) and Amazon (+3.7%) were key drivers among the large caps with more detail in our full report.
Brent crude fell to around $82 per barrel, marking the biggest weekly loss in three months. In a similar vein, gold prices stabilized at around $2,300 per ounce. The yield on the 10-year U.S. Treasury fell to around 4.5%, as the bond market also reacted to the softer jobs data with the market's expectations pricing in two potential rate cuts within the year.
This week we consider an SA REIT and a pharma and biotech play.
Some SA company highlights last week:
We had a slew of results. Datatec (+9.4%), MTN (+11.6%) on its African operational update, Glencore (-7%), Harmony Gold (-8.3%) with a fatality at one of its mines, Impala Platinum (-3.9%) and Renergen (-9.5%).
More detail in the full report.
Feature Slide - Sharpe Ratio Snapshot
The Sharpe Ratio is a widely used metric in finance that measures the risk-adjusted return of an investment or portfolio. By calculating the Sharpe Ratio for various investment options, traders can identify which investment offers the most favourable risk-return profile.
Economic:
Last week’s focus was firmly on the US jobs data which even managed to overshadow the Federal Reserve’s FOMC meeting. The release of the ADP employment and the nonfarm payroll data showed mixed signals. However, the nonfarm payrolls data appeared to have more of a bearing on markets with the release on Friday resulting in a late week rally on risk assets and a selloff in bonds and safe haven and commodity assets. Details in our full report.
In Europe, we had German inflation and GDP along with Eurozone GDP data. In Japan, we had retail sales, industrial production and some yen action.
In SA, we saw the release of PMI, money supply and credit as well as the trade balance which usually has a large bearing on the rand.
For the week ahead:
SA: Foreign reserves, manufacturing production
Global: Chinese trade and inflation, UK GDP and BOE decision.
Our Market's and Risk view:
The market correction has paused with a short term counter rally on the back of US economic data. We remain cautious and our risk indicators remain in 'FEAR' for a 4th consecutive week, effectively flat on the week. While market momentum has ticked higher, other indicators like the put/call ratio have also risen, muting the impact and reflecting ongoing caution.
(Corporate clients can contact us for more detail on our overall risk matrix).
Our full report unpacks all of this in more detail as well as their implications for the markets.
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