Daily Solutions – 14 February 2018

By Alexander Forbes Investments on Feb 14, 2018 in Daily Solutions

JOHANNESBURG – The JSE closed firmer on Tuesday, extending its gains from midday, as the rand weakened slightly following the ANC’s announcement that, despite President Jacob Zuma having been recalled, no deadline was set for him to vacate his office. The ANC national executive committee (NEC) has not given Zuma a deadline on when he should resign following his recall by the party. The ANC caucus will meet on Wednesday, but the party said it had not yet brought any motion of no confidence against Zuma. “The market impact of today’s news was limited, and we think that Zuma’s exit is now well priced in,” Capital Economics analyst John Ashbourne said. While the ANC has not set a deadline, “we doubt that the current limbo will drag past the middle of next week”. After hitting a best intra-day level of R11.8751 to the dollar, the rand had fallen to R11.9738 by the JSE’s close, despite a weak dollar environment. The JSE recorded broad-based gains, led by gold stocks and industrials, amid signs that the huge sell-off last week in equity markets may have been an overreaction. The fact that emerging markets fell together with developed markets, was very unusual, and “may be a signal that the bull market is not over”, said Stanlib retail investment director Paul Hansen. World economies remained strong and interest rates relatively low, for now.

US MARKETS – Stocks posted a three-day winning streak on Tuesday as the major averages continued to recover from the correction levels reached last week. The Dow Jones industrial average closed 39.25 points higher at 24,640.45 after falling as much as 180.24 points. Goldman Sachs and 3M were the biggest contributor of gains to the 30-stock index, both rising 0.9 percent. The S&P 500 rose 0.3 percent to 2,662.94, with financials among the best-performing sectors. Wells Fargo was the best-performing stock in the financials sector, rising 2.6 percent. Tech, meanwhile, rose 0.3 percent after trading lower earlier in the session. The Nasdaq composite climbed 0.5 percent to close at 7,013.51, with shares of Nvidia and Amazon both climbing about 2 percent. The tech-heavy index fell as much as 0.6 percent earlier in the session.

EUROPEAN MARKETS – European equities finished Tuesday’s trade on a relatively negative note, as caution continued to linger following the U.S.-led market sell-off last week. The pan-European Stoxx 600 ended the session down 0.63 percent provisionally, with most sectors moving into the red by the close. On the bourses front, the French CAC 40 slipped 0.6 percent, while Germany’s DAX fell 0.7 percent. The U.K.’s FTSE 100 fluctuated around the flatline, before closing down 0.13 percent at the close. A series of corporate earnings Tuesday yielded both positive and negative reactions on European trading floors throughout the session. U.K. consumer price inflation remained at 3 percent in January, the same level as in December. The rate, as reported by the Office of National Statistics (ONS), was slightly higher than analysts’ forecasts. Most economists were expecting a small fall in the CPI to 2.9 percent.

ASIAN MARKETS – Most Asian markets closed higher on Tuesday, after stateside indexes recorded their second day of gains following last week’s losses. Japan’s benchmark Nikkei 225, however, reversed early gains to closed down 0.65 percent, or 137.94 points, at 21,244.68 as markets resumed trade following a long weekend. The decline in the index came as the dollar slipped further against the Japanese yen, and was at odds with bounces seen in other regional markets following the recent sell-off in stocks. Across the Korean Strait, the Kospi advanced 0.41 percent to finish the day at 2,395.19. Greater China markets were also buoyant. Hong Kong’s Hang Seng Index rose 1.54 percent by 3:14 p.m. HK/SIN as markets clawed back gains after falling into correction territory last week.


Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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