Traders remained cautious on Wall Street yesterday, sending US markets slightly lower. The weaker trend this week continued on a lack of market events that could alter sentiment. The dollar fell against global peers after President Trump made comments suggesting the greenback is too strong and that the US will not brand China as a currency manipulator. UK markets fell on weakness in mining sector stocks and Asia is tracking overnight losses this morning. China’s trade activity increased with the volume of imports and exports surging and the country recorded a larger than expected trade surplus.
South African News
South African markets reversed gains late in the afternoon yesterday to close marginally higher. Banks rallied and the Rand was stronger against the dollar, having a negative impact on large cap dual listed shares. The Rand has now reversed about a third of its losses since the cabinet reshuffle, a remarkable feat considering the country’s recent credit downgrades. Data yesterday showed a decline in Retail sales for February, raising concerns that consumers are under pressure and that first quarter GDP growth could miss estimates.
Company News - Daniel
The rand strengthen overnight against all major currencies, especially the US dollar after Trump’s comments on currency and interest rates. We believe there will be quite a bit of volatility today in the market, the same we saw in the end of yesterday trading day on the back of a stronger rand. It might be a good time to stock up on the rand hedges. Our view is that Zuma will stay in office until his term is up, where we will see a continues weakening of the rand. The Gold spot price strengthened overnight, so we might see some upside in the gold stocks like Sibanya although not too much on the back of a weaker US dollar.
credit: Graph Provided by Sharenet Advanced Online Charts
The Day Ahead
The Rand looks likely to continue its volatile behaviour going into the long weekend. Local mining production is due for release and should reveal another piece of the GDP puzzle for the first quarter. US producer prices and initial jobless claims should also receive some attention.
Key Results Out Today
SA Mining production
US Initial jobless claims
Quote of the day
"What we need in South Africa is for egos to be suppressed in favour of peace. We need to create a new breed of South Africans who love their country and love everybody, irrespective of their colour."
- Chris Hani
Quantitative Investment Analyst
Ian Stiglingh is a full time quantitative analyst, responsible for research of equities across all industries. Ian completed his degree in Mathematical Science in 2013 and his Honours degree in Financial Risk Management in 2014, both at the University of Stellenbosch. During his studies, Ian worked as an intern at Old Mutual Actuaries & Consultants as well as J.P. Morgan in Johannesburg, and is currently a CFA candidate
Analyst and Securities Trader
Daniel is a full-time analyst and securities trader, and is responsible for equities research across industries. Although he grew up in a small town in the Klein Karoo, Daniel has always been interested in both locally and internationally traded companies. Daniel has been actively investing and trading on the JSE and other global exchanges since starting his Bcom Investments Degree at the University of Stellenbosch, which he completed in 2014 . During his studies, Daniel worked as an intern at Kruger International in Johannesburg in 2015, gaining valuable experience from Hein and Mia Kruger. He is currently a CFA candidate.