Daily Solutions – 30 August 2018

By Alexander Forbes Investments on Aug 30, 2018 in Daily Solutions

JOHANNESBURG –  The JSE ended Wednesday slightly higher as the market battled to find direction in a weaker rand environment and on a possible renewed flare-up in trade tension. Sentiment towards emerging markets turned negative amid continued weakness in the Turkish lira. Banks, financials and retailers were sold off on the day, while gold stocks recovered on a higher metal price. But platinums remained weak. Naspers gained some traction toward the close. As the euro rose to $1.17 from $1.13 against the dollar during the past two weeks, it removed all the pricing in of political and economic risks from Turkey and other emerging markets, Societe Generale analysts said. A stronger dollar would worsen Turkey’s debt. The situation in Turkey, however, hasn’t changed and the lira continues to fall. But analysts have taken the view that European banks have not lent enough to Turkish companies to be a concern if those companies cannot repay those loans, Dow Jones Newswires reported. Although a trade deal between the US and Mexico has been struck, global trade tension remains. “There is still a long way to go with President Donald Trump recently again threatening tariffs on cars from Europe and the US, while preparing for another $200bn of tariffs against China,” said Oanda analyst Craig Erlam. At the same time, Brexit negotiations appeared not to have progressed that well, with the UK and EU appearing far from agreeing on the terms of the divorce.

US MARKETS – A rally in tech stocks led the Nasdaq Composite and S&P 500 to record highs, with Amazon, Alphabet and Apple leading the gains. Investor sentiment was also boosted by the resumption of U.S.-Canada trade talks. The Nasdaq gained 1 percent to close at 8,109.69. The S&P 500 rose 0.6 percent to 2,914.04, closing above 2,900 for the first time. The S&P 500 tech sector rose 1 percent. The Dow Jones Industrial Average climbed 60.55 points to 26,124.57 as Apple rose 1.5 percent to an all-time high. Amazon shares rose 3.4 percent to a record after Morgan Stanley raised their price target on the stock, predicting a $1.2 trillion valuation for the company. Analyst Brian Nowak said Amazon’s advertising, subscription and cloud businesses “will drive higher profitability and continued upward estimate revisions.” Shares of Google-parent Alphabet gained 1.5 percent after Morgan Stanley raised its price target on the stock, making it the highest on Wall Street. 

EUROPEAN MARKETS –  The majority of European markets finished Wednesday slightly higher, as investors continued to monitor corporate earnings and global trade developments. The pan European Stoxx 600 closed up 0.29 percent, with most sectors turning positive by the close. The U.K.’s FTSE 100 underperformed fellow bourses, off 0.71 percent as Brexit turmoil resurfaced. Other indexes finished on a positive note, with France’s CAC 40 rising 0.30 percent and Germany’s DAX popping 0.27 percent. Most peripheral markets closed flat or in the black. In other corporate news, British luxury car firm Aston Martin announced it may launch an initial public offering (IPO) in London. Aston Martin is most famously known as the car brand of choice for James Bond.

ASIAN MARKETS –  Asia markets were mixed on Wednesday afternoon after the Nasdaq and S&P 500 hit another record high on Wall Street overnight as trade fears eased. Japan’s Nikkei 225 ended the trading day up by 0.15 percent at 22,848.22 after hitting an earlier high of 22,968.18. The country’s shipping sector extended its gains from the previous day by 2.88 percent. South Korea’s Kospi also closed higher by 0.26 percent to end at 2,309.03. The mainland China markets ended the trading day in negative territory. The Shanghai composite fell by 0.31 percent to close around 2,769.30 while the Shenzhen composite fell 0.56 percent to close at 1,489.29. 

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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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