This week, the IMF released new international growth forecasts, the Republicans tried yet again to repeal Obamacare, and the South African Reserve Bank cut the repo rate by 25 basis points.
- The MSCI Emerging Market Index is up 4.9% for July and the MSCI World Index has gained 2.2% over the same period.
- The IMF released economic growth forecasts. For the first time in years, it did not revise its forecasts downwards for world growth for the current year and the year to follow.
- The IMF increased its forecast for European growth for 2017 and 2018, and lowered its forecast for the US.
- The dollar has weakened 10.7% against the euro this year, its weakest level in two and a half years.
- The US S&P 500 Index is up 10.4% in 2017 (excluding dividends) in dollar terms, but it is slightly down in euro terms.
- The Nasdaq and the S&P 500 indices traded at all-time highs last week. Each ended the week in the black – up 1.19% and 0.54% respectively.
- Technology shares continue to outperform, with Tencent in Hong Kong up by more than 35% in 2017.
- IT shares in the US have increased by 18.8%, compared to the S&P500’s 10.4% gain year-to-date. Financials are up 6.7% and energy/oil shares are down 13.5%.
- This week, the Republicans took another shot at repealing Obamacare.
- The ECB kept interest rates on hold at -0.4%. ECB President Mario Draghi says the institution is waiting for inflation to catch up to the economic recovery before tapering stimulus in the Eurozone.
- China’s year-on-year GDP growth for June surprised on the upside, increasing by 6.9%. A better than expected rise in retail sales and industrial production were the main drivers.
- The South African Reserve Bank cut the repurchase (repo) interest rate by 25 basis points, to 6.75%. This is the first cut in five years. It also halved its growth forecast for South Africa for 2017 from 1% to 0.5%.
- The JSE ALSI has recovered from its June doldrums by gaining 6% – back to its highs of the last three years.
- US dollar weakness is hurting the JSE. The rand is down 4.2% against the euro in 2017 and 0.5% against the pound but up 5.8% against the dollar.
- The Naspers share price has increased by 41% this year.
- South Africa’s headline CPI inflation rate for June increased by 0.2% month-on-month. The annual rate of inflation eased to 5.1% year-on-year from 5.4% in May. Inflation has trended lower in recent months, well below the peak of 6.7% year-on-year recorded in December 2016.