EQ-FIN 14 hours ago MARKET COMMENTARY by PAUL HANSEN Wednesday 23rd July 2014 Markets rebounded on hopes of a calming of issues out there. The S&P 500 Index rose by 0.5% to within a point of a new record closing, with the Nasdaq +0.7%. Better existing home sales (best in 8 months) helped. Also, Bill Ackman’s attempts to deal a “death blow” to Herbalife backfired, with the share +23%!! Apparently he is not too popular on Wall Street. European markets were +1.7% and London +1%. It is interesting to note that 40% of European oil consumption comes from Russia, complicating issues, plus 22% of their gas. For example, the Netherlands imports 95% of its oil from Russia, so despite the loss of so many Dutch lives in the plane disaster, Holland has to be careful. Asian shares have progressed this morning to new 6-year highs. The Nikkei is flat, but Hong Kong +0.7% on hopes of stimulus from China for the ailing property market and Aussie at another 6-year high +0.6%, helped by strong production reports from Billiton, with iron ore production up 19% year-on-year in the latest quarter to end June. The share is +1% today. The US 10-year bond yield is flat at 2.47%, just 0.37% above the US consumer price index (June was at 2.1%). Our 13-year R186 bond yield is up a bit at 8.16%. Foreigners sold some R1.1bn of our bonds yesterday, but bought R500m of our shares. The JSE ALSI closed +1% at 51,931 yesterday, with Mining shares up 1.7% at a new high for 2014 and the Resources Index +1.8%, its highest level since February 2011. It has a total return so far in 2014 of 20.4%, including dividends!! New highs during the day included HCI, Sasfin, Resilient, Telkom, Mpact, Mr Price, Remgro, Peregrine, RMBH, Lifecare, Billiton, Firstrand, Pioneer Foods and Sappi, with Ellies the only new low. The dollar is much better this morning at $1.346 to the euro (an 8 month high) but identical versus the pound at $1.707 versus yesterday. The rand is a bit stronger at 10.56 today to the dollar from 10.60 on Friday, at 18.03 from 18.10 versus the pound, 14.22 to the euro from 14.34 and 9.95 versus the Aussie from 9.96. So the European Central Bank is gradually winning its battle to weaken the euro. No need to fight against a central bank there! Good to see that 7 companies are investing over R3bn at the Coega Industrial Development zone (a construction boom?).
Posted on: Wed, 23 Jul 2014 20:57:09 +0000
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