SOUTH AFRICA MARKET REVIEW
- South African markets closed in the green on Friday, as investor concerns over rising global inflation eased, following the release of a lesser than expected increase in US inflation.
- Retail sector companies, Clicks (JO:CLSJ) Group, Mr Price Group (JO:MRPJ) and Shoprite Holdings (JO:SHPJ) gained 3.4%, 2.8% and 1.1%, respectively.
- Real estate property companies, Attacq (JO:ATTJ), Delta Property Fund (JO:DLTJ) and Capital & Counties Properties (JO:CCOJ) advanced 2.9%, 2.3% and 0.8%, respectively.
- Banking companies, Investec, RMB Holdings (JO:RMHJ) and Nedbank Group (JO:NEDJ) added 1.7%, 0.7% and 0.4%, respectively.
- Platinum mining companies, Anglo American (JO:AMSJ) Platinum and Royal Bafokeng Platinum (JO:RBPCBe) rose 1.0% and 0.6%, respectively.
- On the flipside, gold mining companies, Gold Fields (JO:GFIJ) and AngloGold Ashanti (JO:ANGJ) shed 2.1% and 1.3%, respectively.
- The JSE All Share index advanced 0.3% to close at 67,028.86.
- The UK market finished firmer on Friday, buoyed by broad-based gains in retail and mining sector stocks and as a balanced revival in the domestic economy boosted investor morale.
- Retailers, Just Eat Takeaway.com N.V. (LON:JETJ) and Tesco (LON:TSCO) surged 6.1% and 0.7%, respectively.
- However, peer, Burberry Group (LON:BRBY) declined 1.9%. Mining sector companies, Antofagasta (LON:ANTO), Glencore (LON:GLEN) and Anglo American (LON:AAL) gained 2.1%, 1.5% and 1.1%, respectively.
- Meanwhile, Rio Tinto (LON:RIO) shed 1.4%, after the company slashed its iron ore shipment guidance for FY21, amid labour constraints in Western Australia.
- On the flipside, Pearson (LON:PSON) plummeted 14.9%, despite reporting an increase in its revenue. However, it recorded a drop in US higher education admissions amid the Covid-19 pandemic.
- The FTSE 100 index advanced 0.4% to close at 7,234.03.
US MARKET REVIEW
- US markets ended higher on Friday, as investors cheered better than expected corporate results for 3Q21, along with a more than expected rise in US retail sales in September.
- Alcoa (NYSE:AA) Corporation surged 15.2%, after the aluminium manufacturing company announced dividends for the first time since 2016, following robust 3Q21 earnings.
- It also announced a $500.00mn share buyback. Banking company, Goldman Sachs Group (NYSE:GS) added 3.8%, after reporting an increase in its 3Q21 net income.
- Peer, Charles Schwab (NYSE:SCHW) Corporation advanced 3.6%, after the company reported better than expected 3Q21 results.
- The S&P 500 index rose 0.7% to settle at 4,471.37, while the DJIA index advanced 1.1% to close at 35,294.76.
- The NASDAQ index climbed 0.5% to end the trading session at 14,897.34.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning, reversing Friday’s gains on Wall Street, as the release of weaker-than-expected Chinese economic growth data dampened investor sentiment.
- In Japan, technology company, Panasonic (T:6752) has shed 0.6%. On the contrary, glass manufacturing company, Nippon Sheet Glass (T:5202) has advanced 4.5%.
- In Hong Kong, pharmaceutical company, CSPC Pharmaceutical Group (HK:1093) has dropped 1.7%.
- On the flipside, peer, Wuxi Biologics (HK:2269) has added 3.1%. In South Korea, technology company, LG Electronics (KS:066570) has eased 0.8%.
- On the contrary, steel manufacturing company, Hankook Steel has surged 29.7%.
- The Nikkei 225 index is trading 0.2% lower at 29,018.82.
- The Hang Seng index has declined 0.4% to trade at 25,242.04, while the Kospi index is trading 0.1% higher at 3,017.25.
COMMODITIES
- At 06:00 SAST today, Brent spot prices fell marginally to trade at $84.87/bl, reversing the previous session’s gains.
- On Friday, Brent spot prices rose 0.8% to settle at $84.87/bl, after the International Energy Agency stated that the energy crisis will boost the demand for oil resulting in a supply deficit by the year end. Moreover, the Baker Hughes data indicated that the number of active US oil rigs rose by 10.00 to 543.00 for the week ended 15 October.
- On Friday, the Illinois North Central No.2 Yellow corn spot prices rose 2.1% to $4.92/bushel.
- At 06:00 SAST today, gold prices advanced 0.2% to trade at $1,770.51/oz. On Friday, gold declined 1.6% to close at $1,767.62/oz, as strength in US Treasury bond yields dented demand for the safe haven yellow metal. However, losses were capped on account of a weaker dollar.
- On Friday, copper rose 4.0% to close at $10,538.00/mt. Aluminium closed 1.6% higher at $3,148.90/mt.
CURRENCIES
- On Friday, the South African rand strengthened against the US dollar. In the US, the New York Fed’s Empire State business conditions index fell more than expected in October. Consumer sentiment dropped in October amid the consistent spread of the Delta coronavirus variant and supply disruptions. In contrast, retail sales surged in September, buoyed by expensive motor vehicle sales, despite fears that supply constraints could disrupt the shopping season amid continued shortages of goods. Meanwhile, the President of the New York Federal Reserve, John Williams forecasted that high inflation would ease off by next year and stated that he is in no rush to increase interest rates.
- The yield on benchmark government bonds mostly fell on Friday. The yield on 2026 bond fell to 7.85%. Further, the yield on 2023 bond advanced to 5.33%, while that for the longer-dated 2030 issue fell to 9.40%.
- At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.6340, while the euro is trading 0.1% higher at R16.9596. At 06:00 SAST, the British pound has gained 0.1% against the South African rand to trade at R20.1030.
- On Friday, the euro declined against most of the major currencies. In the eurozone, trade surplus narrowed in August, following increased energy imports.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1589, while it has marginally gained against the British pound to trade at GBP0.8437.
ECONOMIC UPDATES
- On a MoM basis, the final EU normalised consumer price index (CPI) in Italy rose 1.3% in September, lower than market expectations of an advance of 1.4%. The EU normalised CPI had climbed 0.2% in the prior month. The preliminary figures had recorded a rise of 1.4%.
- Italy had posted trade surplus of EUR1,316.00mn in August, compared with a trade surplus of EUR8,780.00mn in the previous month.
- On a MoM basis, in September, the final CPI registered a drop of 0.2% in Italy, more than market expectations for a fall of 0.1%. The CPI had recorded a rise of 0.4% in the prior month. The preliminary figures had recorded a fall of 0.1%.
- In September, the final EU normalised CPI registered a drop of 0.2% in France on a MoM basis, in line with market expectations of a drop of 0.2%. In the previous month, EU normalised CPI had climbed 0.7%. The preliminary figures had also indicated a fall of 0.2%.
- In August, the non-seasonally adjusted trade surplus in the eurozone narrowed to EUR4.80bn, compared with a trade surplus of EUR20.70bn in the previous month. Market expectations were for the eurozone to post a trade surplus of EUR16.10bn.
- In the US, the NY Empire State manufacturing index dropped to 19.80 in October, higher than market expectations of a drop to 27.80. In the prior month, the NY Empire State manufacturing index had registered a level of 34.30.
- On a MoM basis, retail sales (ex-auto & gas) in the US advanced 0.7% in September. In the prior month, retail sales (ex-auto & gas) had risen by a revised 2.1%.
- The flash Reuters/Michigan consumer sentiment index registered an unexpected drop to 71.40 in the US, in October. The Reuters/Michigan consumer sentiment index had registered a level of 72.80 in the previous month.
- Wholesale sales recorded a rise of 0.3% in Canada on a monthly basis in August, compared with a drop of 2.1% in the prior month. Markets were expecting wholesale sales to advance 0.5%.
- In Canada, existing home sales rose 0.9% in September on a MoM basis. In the previous month, existing home sales had dropped 0.5%.
- Industrial production in China climbed 3.1% on an annual basis in September, compared with an advance of 5.3% in the previous month. Market expectations were for industrial production to advance 4.5%.
- On an annual basis, real gross domestic product (GDP) (YTD) climbed 9.8% in 3Q21, in China. Real GDP (YTD) had advanced 12.7% in the prior quarter.
- On a YoY basis, in China, retail sales climbed 4.4% in September, more than market expectations for a rise of 3.3%. Retail sales had advanced 2.5% in the previous month.
CORPORATE UPDATES
SOUTH AFRICA
- SA Corporate Real Estate Limited: The real estate investment trust company announced that Mr. Otis Tshabalala has tendered his resignation as the Chief Operating Officer of the company to pursue a new career opportunity in the property sector.
- Oil climbs amid rising demand: Oil prices climbed, heading for gains of more than 2.0% for the week, on increasing signs of robust demand and tighter supplies over the next few months as rocketing gas and coal prices stoke a switch to oil products.