Daily Solutions – 28 August 2018

By Alexander Forbes Investments on Aug 28, 2018 in Daily Solutions

JOHANNESBURG – A strong showing from banking and mining stocks lifted the JSE on Monday as a dovish tone from the US Federal Reserve boosted renewed risk-on trade. The all share closed above 59,000 points for the first time in five months, with the index having now recorded eight consecutive positive days. Last week saw it rise 3.8%. It reached a best level of 61,776.70 on January 26 amid Ramaphoria, before dropping to 53,000 points in intra-day trade on April 4. The day’s gains pushed the all share into positive territory for the year, as the local market continues to recover from a weaker, low-volume environment which coincided with the summer holiday season in the northern hemisphere, as well as local economic and political challenges. Volumes were low on the day, as UK markets were closed for a public holiday. Other European markets were higher, with the DAX 30 having added 0.75% by the JSE’s close. Both the S&P 500 and Nasdaq closed at record highs on Friday, continuing to rise on Monday. The Dow was 0.85% higher by the JSE’s close on Monday. European stocks continue to get a lift from Fed chair Jerome Powell’s remarks on Friday that affirmed the US central bank would continue its strategy of gradually normalising its monetary policy, Dow Jones Newswires reported. The euro firmed above $1.1650 on Powell’s comments, the strongest level for the bloc’s currency this month, boosting the rand to R14.1407 to the dollar, from R14.2514, by the JSE’s close. 

US MARKETS – Stocks jumped on Monday as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months. The S&P 500 gained 0.8 percent to close at 2,896.74 — a record high — with materials and financials as the best-performing sectors. The Nasdaq Composite climbed 0.9 percent to an all-time high, breaking above 8,000 points for the first time, as Facebook, Amazon, Netflix and Alphabet rose. Tech’s gains led the Nasdaq to close at 8,017.90. The Dow Jones Industrial Average rose 259.29 points to 26,049.64 as Caterpillar outperformed. Monday also marked the first time since Feb. 1 that the Dow closed above 26,000. “The market has been buffeted with a lot of headwinds lately, and the biggest one is trade,” said Art Hogan, chief market strategist at B. Riley FBR. 

EUROPEAN MARKETS – European markets closed in positive territory on Monday as investors reacted to comments from the head of the Federal Reserve on the U.S. central bank’s policy-tightening path. The pan-European provisionally Stoxx 600 index closed 0.5 percent higher, with all sectors in positive territory. In the U.K., markets are closed due to a bank holiday. Looking across the benchmark, Germany’s Metro Group was the top performer, after Ceconomy said it was in talks to sell most of its 10 percent stake in the German wholesale retailer. Shares of Metro Group closed 12 percent higher. Markets reopened in Turkey following a week-long holiday. The Turkish lira weakened 3 percent Monday amid continued concerns over the country’s economy. 

ASIAN MARKETS – Asia markets were largely positive in afternoon trade on Monday, with Greater China markets gaining following a move by China’s central bank to guide the management of the yuan, which analysts saw as a way to slow the yuan’s slide. Hong Kong’s Hang Seng index rose by 2.18 percent as of 3:10 p.m. HK/SIN as all its major sectors rose, with services up by 3.21 percent. Over on the mainland, the Shanghai composite was 1.89 percent up to close at 2,780.89 while the Shenzhen composite ended the trading day higher by 2.491 percent at 1,496.71. The onshore Chinese yuan traded down against the dollar at 6.8163 at 3:24 p.m. HK/SIN after touching a high of 6.8052 earlier in the day. 

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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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