The rand gave up earlier gains on Wednesday as finance minister Enoch Godongwana’s medium-term budget policy statement (MTBPS) addressed "key issues impacting South Africa's economic stability and growth." He highlighted the positive impacts of new energy investments and progress made by the national logistics crisis committee in easing issues at ports and specific rail corridors. However, Godongwana also noted that the National Treasury’s GDP growth forecast for 2024 is a modest 1.10%, significantly below the global average of 3.20%, underscoring the need for economic reforms. Investment in infrastructure, particularly in “gross fixed capital formation,” remains below target, posing further growth risks.
Wall Street ended lower on Wednesday as investors reviewed more corporate earnings amid signs of an economic slowdown. The S&P 500 and Nasdaq 100 fell 0.30% and 0.60%, respectively, while the Dow dropped 91 points. Chipmakers faced headwinds, with Nvidia (NASDAQ:NVDA) dipping 0.90% and AMD (NASDAQ:AMD) plunging 10.60% following weak guidance. Economic data showed that GDP growth slowed to an annualised 2.80% in Q3, slightly below expectations. Meanwhile, a strong labour market curbed hopes for Fed rate cuts, creating caution as more significant earnings reports loom.
European stocks continued their decline, ending sharply lower on Wednesday as markets digested disappointing earnings and important economic indicators. The STOXX 50 dropped 1.30% to 4 886, and the STOXX 600 lost 1.10%, closing at 512.
In Asia, the Hang Seng fell 1.60% to close at 20 381 points on Wednesday, marking its second consecutive day of losses with declines across various sectors. Investor sentiment was volatile ahead of next week’s US election and the Fed rate decision. In contrast, Japan’s Nikkei rose 0.96% to close at 39 277, marking a three-day winning streak driven by strong quarterly earnings from major US tech firms, boosting sentiment for tech stocks.
WTI crude oil futures rebounded by more than 2%, reaching $68.60 per barrel on Wednesday following an unexpected drawdown in US oil stockpiles, while geopolitical concerns remained high. Gold surged past $2 780 per ounce, hitting a new record amid increased demand for safe-haven assets in response to geopolitical risks and inflationary trends in the US economy.
