Wall Street rallied to a record close yesterday, helped by strength in the retail sector. In the UK, a strong Pound and lagging construction sector placed pressure on markets. Data showed that inflation increased more than expected and may prompt rate hikes earlier than forecast. Oil prices climbed yesterday after a report from OPEC indicated a slowdown in output. The number of barrels produced in the Gulf of Mexico also decreased due to Hurricane Harvey, which is adding upward pressure to prices.
South African News
SA markets jumped yesterday on the back of strength in miners and industrials. Gold mining companies tracked the gold price lower as fear dissipates in the global environment. The ZAR declined against a stronger Dollar, which was positive for ZAR hedge shares. Local politics made its way into the news again when the High Court annulled the 2015 ANC provincial executive election in KZN. The reaction from the ZAR was positive before Dollar strength overturned momentum. The court ruling is a psychological boost for Ramaphosa, however it creates more uncertainty leading up to the ANC elective conference in December. This shouldn’t affect the voting in December as KZN accounts for a very small portion of the votes.
Richemont reported 5 months sales at it’s annual general meeting in Geneva, Switzerland. Sales increased in all regions that the company operates in, lead by double digit sales growth in most of the Asian markets, including China and Hong Kong. A weaker growth rate of 3% in European markets reflects the impact of the strong Euro on the tourists spending habits. Overall the company increased sales by 12% in constant currency and shows higher demand for luxury goods. Richemont’s share price increased 32.58% year-to-date and was one of the top performances of the heavy weights on the JSE Top 40.
credit: Graph Provided by Sharenet Advanced Online Charts
Trade CFR From 0.3%
The Day Ahead
There are a few data releases scheduled for today including local retail sales and business confidence. Producer prices from the US may also gather attention from traders seeking to update views on future rate hikes in the US. Currently, it looks like the market is expecting one more rate increase for the year.
Key Results Out Today
SA Retail sales
SA Business confidence
EU Industrial production
Quote of the day
"There is no heavier burden than an unfulfilled potential."
- Charles Schulz
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.