Date published - 2024-07-16

Global markets continued their bullish streak with the S&P 500 rising 0.9%, the Nasdaq up 0.2%, and the Dow Jones increasing by 1.6%. Tech stocks faltered, with Alphabet, Microsoft, and Amazon all down around 3%, and Meta notably losing 7.6%. There was a clear rotation from growth and tech stocks into defensive and value sectors.

The attempted assassination of former President Trump will dominate news flow this week. Domestically, focus will be on the SARB, with rates expected to remain on hold.

In the US, earnings season kicked off with Wells Fargo down 5.7%, while JPMorgan and Citigroup ended flat despite mixed earnings results. Paramount Global fell 3.3% amid a complex merger with Skydance Media, and Boeing dropped 2.5% after pleading guilty to a conspiracy charge. Costco reversed initial gains to end the week down 5% despite a sales jump.

The yield on US 10-year bonds fell, hitting a four-month low, gold prices stayed near $2,400 per ounce, and Brent crude ended slightly lower.

This week, we consider an SA based giant along with a global resource play operating in emerging markets.

Some SA company highlights last week:

Pick n Pay (+4.8%), Tharisa (-4.84%), MAS (+5.8%)

More detail in the full report.

Economic:

Last week, markets were focused on Fed Chair Powell's testimony, where he highlighted "considerable progress" in taming inflation but indicated that rate cuts are unlikely before achieving a 2% inflation goal. June CPI data showed a decline to 3%, the lowest since June 2023, boosting market sentiment for a possible rate cut in September.

In China, loan growth hit a record low of 8.1%, while exports surged by 8.6% year-on-year.

South African mining production remained flat in May, with manufacturing production falling by 0.6% year-on-year, reflecting ongoing challenges from energy and logistics constraints.

The attempted assassination of former President Trump over the weekend will dominate market attention this week.

More detail in our full report.

For the week ahead:

SA: SARB, SA retail sales

Global: US newsflow, US retail sales, UK retail sales, Eurozone inflation, ECB Decision, Japan inflation, Chinese 3rd Plenum, China GDP, house prices, retail sales and industrial production.

Our Market's and Risk view:

Our risk matrix has moved back into GREED territory yet again. Momentum and the put/call ratio are still in EXTREME GREED, while stock price breadth and the number of new 52 week highs remain in EXTREME FEAR. Headline indices remain propped up by fewer (large cap) stocks. The overall mix lends us to be cautious.

(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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