Stanlib Morning Market Commentary Thursday 19th June 2014 There was plenty of news and action yesterday and overnight. The US Fed had its meeting, continuing with its $10bn tapering (now down to $35bn of bond buying per month) and Janet Yellen indicated that US short rates would remain low for a while after tapering ends (mid-2015 it appears), despite her admission that the US economy is bouncing back nicely after the bad weather early in the year. So it was good news for both equities and bonds. So the US rose by 0.8%, Europe was up 0.1% and London 0.2%. Then good old Chinese Premier Li Keqiang produced bullish comments himself, pledging to sustain the Chinese economic growth rate at least at 7.5%. He said in London China will have “medium to high level” growth in the long-term and “honestly and solemnly there will not be a hard landing”. Nice. So things are humming this morning in Asia, with Asian markets at 6 year highs and Emerging Market currencies and shares firmer. The Nikkei is up 1.4%, Hong Kong up 0.2% and Aussie is happily up 1.5%, with Billiton up strongly +2.5%. The JSE All Share saw fairly broad selling across financial and industrial shares yesterday, falling 0.4% to 50,693. We had plenty of news too, with our inflation higher at 6.6%, our current account deficit better than expected (net around -R40bn for the quarter and R39bn of funds came in from offshore, so mostly financing the deficit. Most of the R39bn is classified as “other”). The dollar is weaker this morning at $1.359 to the euro and versus the pound too at $1.699. The rand is up at 10.67 today to the dollar (from 10.84), at 18.14 from 18.38 versus the pound, 14.50 to the euro from 14.58 and 10.03 versus the Aussie. The rand has gained along with almost all emerging market currencies overnight. Foreigners were sellers of our bonds yesterday at -R609m and our equities at –R968m, but year-to-date the total net number is +R12.1bn. Sadly AMCU has made new demands on the platinum companies, beyond the “in principle deal” announced last week, including a R3,000 cash payment to all strikers and a moratorium on retrenchments. So no deal. We are a bit concerned at the price of crude oil, now at $114 a barrel, as strife in Iraq continues. Good for Sasol shares of course. Our market should be interesting today, possibly breaking upwards rather than downwards. Paul Hansen Director: Retail Investing Stanlib Wealth Management stanlib
Posted on: Thu, 19 Jun 2014 12:25:00 +0000
Trending Topics
Recently Viewed Topics
© 2015