Date published - 2023-11-07
(This is a very shortened version highlighting excerpts of our full report which is available for our paid subscribers).
Last week was a fantastic one for stocks as markets steamed ahead after a dovish Fed and softer US jobs numbers (see Economic section). The Dow Jones, S&P 500, and Nasdaq Composite all had their best week of the year. There's growing hope that the Federal Reserve might not raise interest rates as much as expected. This pressured bond yields which fell with the 10-year Treasury yield, which dropped from its recent high of 5% to around 4.5%.
Brent crude oil struggled as fears of a regional escalation in the Middle East eased. However, the demand outlook for oil weakened coupled with higher US crude oil stockpiles. Gold had a good week, reaching over $2,000 per ounce before finding some resistance as safe haven demand eased back and capital returned to risk assets.
Apple's results caused some short term volatility as investors digested the outlook. McDonald’s earnings were stronger and we unpack some drivers in the report.
Looking ahead, most companies have already reported and earning season is slowing. Notable results in the US include: Disney and Uber this week.
Some SA company highlights last week (our full report includes more detail on the moves and drivers):
Dis-Chem (+6%) reported mixed results for the first half of the year. Sibanye Stillwater (-3.11%) faced challenges. AB InBev (+7.25% for the week) discussed the price/volume mix. MTN's share price hit 52-week lows citing a host of issues. For more detail, consider a paid subscription.
Economic:
Last week was all about the US Federal Reserve. At what was read as a dovish stance by the market, the Fed chose to maintain the target range for the Fed funds rate at 5.25%-5.5% for the second consecutive time. Our full report highlights the Dot Plot as well as some detail on the US jobs data out post the Fed.
The Bank of England held its benchmark interest rate at 5.25% for the second consecutive time as well, voting 6-3 to keep rates unchanged, with three members advocating for further hikes. We also had Eurozone GDP and inflation data.
Domestically, the Medium-Term Budget Policy Statement (MTBPS) was the main focus in South Africa and was received well by the market that had more bearish expectations. Our report touches on the revised GDP growth forecast, revenue and expenditure drivers and debt profile.
For the week ahead:
SA: Mining and manufacturing production
US: Fed speakers at various events, Univ. Michigan sentiment indicators
China: Trade data, inflation, lending rates and total social financing
Global: German inflation and factory orders, Eurozone retail sales, UK GDP.
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