Daily Solutions – 29 August 2018

By Alexander Forbes Investments on Aug 29, 2018 in Daily Solutions

JOHANNESBURG – After a hesitant start on Tuesday, the JSE all share ended the day higher, firming above 60,000 points for the first time in seven months, on easing global trade tension. Retailers, banks and property stocks were the best performers on the day, with market heavyweight Naspers taking a back seat. The all share opened marginally higher on optimism over a tentative trade deal between the US and Mexico, announced overnight. The momentum on the JSE stalled towards midday, but picked up again before the close, amid signs that the trade spat between President Donald Trump and the EU might be resolved. Dow Jones Newswires reported that Trump spoke by phone to German Chancellor Angela Merkel, with the two strongly supporting “ongoing discussions between Washington and Brussels to remove barriers to a deeper trading relationship”, the White House said in a statement. While Wall Street has largely muscled past trade concerns, boosted by strong corporate profits and economic data, any resolution of trade uncertainty is seen as positive for the outlook in markets, the newswire said. After Monday’s upbeat performance the Dow had risen 0.18% by the JSE’s close on Tuesday. It reached a record high on January 26, when it closed at 26,616.71 points. Both the S&P 500 and the Nasdaq have closed at record highs over the past few sessions. More weakness in the Turkish lira capped further gains in the rand, which momentarily broke through R14 to the dollar during the course of the day. 

US MARKETS – Stocks closed slightly higher on Tuesday, boosted by an improved outlook on global trade after the U.S. and Mexico struck a deal. The S&P 500 rose marginally to 2,897.52, but posted a record close and briefly broke above 2,900 for the first time ever. The Nasdaq Composite also hit a record high, climbing 0.1 percent to 8,030.04 as Apple rose 0.8 percent. The Dow Jones Industrial Average advanced 14.38 points to 26,064.02. The market’s slight gains on Tuesday came a day after a rally propelled the S&P 500 and Nasdaq to record highs. Nicholas Colas, the co-founder of DataTrek Research, said in a note the recent breakout is “a function of a baseline assumption (further corporate earnings growth and low rates) and a fresh input (a US Mexico trade deal means other trade/tariff negotiations are also likely).” 

EUROPEAN MARKETS – European markets ended on a mixed note at Tuesday’s close, with risk appetite sharpened by news the U.S. and Mexico had reached a deal to overhaul the North American Free Trade Agreement. The pan-European STOXX 600 was off 0.03 percent by the close, with sectors pointing in different directions at the end of market trade. Looking at bourses, most of Europe’s major indexes closed higher with the U.K.’s FTSE 100 pushing ahead, up 0.52 percent on the back of a strong performance from British miners. The French CAC 40 rose 0.11 percent, while the German DAX came under slight pressure, off 0.09 percent. Peripheral markets showed a mixed-to lower picture by the finish. 

ASIAN MARKETS – Asia markets were broadly higher on Tuesday afternoon following yet another day of record highs on Wall Street, as the U.S. and Mexico announced a new trade agreement. The Nikkei 225 ended the trading day largely flat, closing at 22,813.47, with the country’s shipping sector up by 2.3 percent. South Korea’s Kospi closed in positive territory at 2,303.12, up by 0.17 percent, with industry heavyweight Samsung Electronics rising 0.54 percent. Over in the Greater China markets, Hong Kong’s Hang Seng index lost some of its earlier gains, but still traded up by 0.26 percent as of 3:01 p.m. HK/SIN. Mainland Chinese stocks, meanwhile, closed in relatively cautious territory. 

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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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