Investing.com’s stocks of the week
South Africa Market Review
South African markets closed in the red yesterday, after domestic inflation soared just below the upper limit of South African Reserve Bank’s (SARB) inflation target in March. Lenders, FirstRand (JO:FSRJ), RMB Holdings (JO:RMHJ) and Capitec Bank Holdings (JO:CPIJ) shed 2.9%, 1.9% and 1.5%, respectively. Gold miners, AngloGold Ashanti (JO:ANGJ) and Gold Fields (JO:GFIJ) declined 1.9% and 1.0%, respectively. Diversified miners, Anglo American (JO:AMSJ), African Rainbow Minerals (JO:ARIJ) and Exxaro Resources (JO:EXXJ) dropped 1.6%, 1.5% and 1.1%, respectively. On the flipside, real estate property companies, Dipula Income Fund (JO:DIBJ) and Growthpoint Properties (JO:GRTJ) soared 5.7% and 1.1%, respectively. Retailers, Lewis Group (JO:LEWJ), Clicks Group (JO:CLSJ) and Cie Financiere Richemont S.A. (JO:CFRJ) gained 3.2%, 3.1% and 2.5%, respectively. The JSE All Share index declined 0.1% to close at 73,783.43.
UK Market Review
The UK market finished firmer yesterday, on the back of strong corporate earnings updates. CRH (LON:CRH) soared 5.9%, after the company noted a positive start to the year, with group like-for-like sales increasing 13.0% in 1Q22 and 1H22 sales, EBITDA and margin set to be ahead of the prior year. Just Eat Takeaway.com N.V. (AS:TKWY) advanced 2.1%, after it stated that it is considering the partial or full sale of GrubHub as it reported a drop in 1Q22 orders and reduced its FY22 guidance. Meanwhile, Hikma Pharmaceuticals (LON:HIK) declined 1.9%, even though the pharmaceutical company announced that it received preliminary approval from the US Federal Trade Commission (FTC) for the acquisition of sterile injectables company, Custopharm, from Water Street Healthcare. The FTSE 100 index advanced 0.4% to close at 7,629.22.
US Market Review
US markets ended mostly lower yesterday, dragged down by weaker corporate earnings results. Netflix (NASDAQ:NFLX) plummeted 35.1%, after the video streaming company reported a net loss of 200,000 paid subscribers in 1Q22, against the expectations of a 2.50mn net additions. On the contrary, International Business Machines Corporation (NYSE:IBM) surged 7.1%, on the back of an optimistic 2022 forecast, with the only headwind being a loss of Russian business following robust 1Q22 results. Procter & Gamble (NYSE:PG) advanced 2.7%, after the consumer products company reported better than expected profits and sales in 3Q22 and raised its sales guidance for FY22. The S&P 500 index fell 0.1% to settle at 4,459.45, while the DJIA index advanced 0.7% to close at 35,160.79. The NASDAQ index eased 1.2% to end the trading session at 13,453.07.
Asia Market Review
Asian markets are trading mostly higher this morning, despite overnight losses on Wall Street. Meanwhile, investors in China await signs for Covid policy support from Chinese Authorities. In Japan, steel company, Japan Steel Works (TYO:5631) has gained 3.7%. On the contrary, Pacific Metals Company (TYO:5541) has eased 2.0%. In Hong Kong, pharmaceutical company, Wuxi Biologics (HK:2269) has plunged 5.9%. On the flipside, Anta Sports Products (HK:2020) has added 1.8%. In South Korea, electronics companies, LG Electronics (KS:066570) and Samsung Electronics (KS:005930) have advanced 1.6% and 1.0%, respectively. Meanwhile, SsangYong Motor Company (KS:003620) has plummeted 19.2%. The Nikkei 225 index is trading 1.1% higher at 27,521.79. The Hang Seng index has declined 1.6% to trade at 20,603.91, while the Kospi index is trading 0.4% higher at 2,731.31.
Commodities
At 06:00 SAST today, Brent spot prices rose 1.2% to trade at $106.86/bl, reversing previous sessions losses.
Yesterday, Brent spot prices fell 0.4% to settle at $105.61/bl, amid concerns about economic growth and decline in crude oil demand weigh against tighter supplies. Further, OPEC+ member Libya’s National Oil Corporation (NOC) said that the country has been forced to shut in 550,000bls per day of output because of a wave of blockades on major oilfields and export terminals. Meanwhile, the US Energy Information Administration (EIA) reported that the US crude inventories fell by 8.00mn bls for the week ended 15 April.
Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.4% to $7.87875/bushel.
At 06:00 SAST today, gold prices declined 0.3% to trade at $1,952.38/oz. Yesterday, gold gained 0.4% to close at $1,957.77/oz, as escalating Russia-Ukraine war and a surge in inflation raised demand for the safe haven yellow metal.
Yesterday, copper declined 0.8% to close at $10,196.00/mt. Aluminium closed 0.2% higher at $3,251.75/mt.
Currencies
Yesterday, the South African rand weakened against the US dollar. In South Africa, consumer prices advanced closer to the upper limit of the SARB’s target range, pushing the Bank deeper in a quandary about curbing inflation without cutting on economic growth. In the US, mortgage applications declined as interest rates surged to a 12-year high in the week ended. The Federal Reserve’s (Fed) Beige Book revealed that the economy grew steadily through early April, but high inflation appears to concede a little in the coming months and clouded the outlook for the economy. Meanwhile, inflation is set to turn sharply lower. Businesses have been forced to pay higher wages due to a tight labour market, supply chain constraints and higher prices.
The yield on benchmark government bonds were mixed yesterday. The yield on 2026 bond rose to 8.18%. Further, the yield for the longer-dated 2030 issue fell to 9.87%.
At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R15.0692, while the euro is trading marginally higher at R16.3147. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R19.6612.
Yesterday, the euro advanced against most of the major currencies. In Germany, factory inflation soared in March, driven by a surge in energy prices. In the eurozone, factory output advanced in February despite supply chain disruptions and rising input costs.
At 06:00 SAST, the euro slipped 0.2% against the US dollar to trade at $1.0827, while it has weakened 0.1% against the British pound to trade at GBP0.8298.
Economic Updates
In March, on a MoM basis, the consumer price index (CPI) rose 1.0% in South Africa. In the previous month, the CPI had recorded a rise of 0.6%.
Trade deficit in Italy narrowed to EUR1662.00mn in February, compared with market expectations of a trade deficit of EUR1170.00mn. Italy had reported a trade deficit of EUR5128.00mn in the prior month.
In March, on a MoM basis, the producer price index (PPI) in Germany climbed 4.9%, compared with an advance of 1.4% in the previous month. Markets were anticipating the PPI to rise 2.6%.
In the eurozone, the seasonally adjusted industrial production advanced 0.7% in February on a monthly basis, compared with a revised fall of 0.7% in the prior month. Market anticipations were for industrial production to rise 0.7%.
In February, the seasonally adjusted trade deficit in the eurozone rose to EUR9.40bn, from a trade deficit of EUR7.70bn in the previous month. Market anticipations were for the nation to register a trade deficit of EUR8.40bn.
The number of mortgage applications in the US slid 5.0% on a weekly basis, in the week ended 15 April 2022. In the prior week, the number of mortgage applications had fallen 1.3%.
In the US, existing home sales fell 2.7% in March on a monthly basis. Existing home sales had registered a revised drop of 8.6% in the prior month.
On a MoM basis, in Canada, the CPI registered a rise of 1.4% in March, compared with a rise of 1.0% in the previous month. Markets were anticipating the CPI to rise 1.0%.
The house price index advanced 2.0% on a monthly basis in Canada, in March. The house price index had registered a revised rise of 1.9% in the previous month.
In 1Q22, on a QoQ basis, the CPI advanced 1.8% in New Zealand, less than market expectations for an advance of 2.0%. In the prior quarter, the CPI had climbed 1.4%.
Corporate Updates
South Africa
Cashbuild Limited (JO:CSBJ): The retail company, in its 3Q22 operational update, stated that revenue dropped to 10.0%, as compared to the same period of the prior year. For the 305 existing stores, revenue decreased by 11.0% and the 12 new stores contributed 1.0% growth. This, combined with the results reported in the 1H22, equated to a decrease in revenue for the year to date of 11.0%.
Oil recovers amid worry about supply: Oil prices rebounded from sharp losses in the previous session as concerns about tighter supplies from Russia and Libya dominated, while industry data showed a drop in US crude inventories.
