January has come to an end and bought relief to investors as most of the loses of December were regained. The MSCI All-Country World Index recorded its best monthly performance since March 2016, along with the S&P 500 which had its best performance in 30 years.
Global News
- Theresa May’s Brexit deal was rejected by parliament, she will now have to return to an already hostile EU to renegotiate a deal – this comes eight weeks to the Brexit deadline, as British Parliament refused a call to extend the deadline.
- On Thursday, President Trump met with China’s Vice Premier Liu He to discuss the Sino-US trade war. Trump did say however that there would be no “final deal” until he meets with President Xi Jinping.
- The Pentagon announced that the Trump administration intends to withdraw from the 1987 Intermediate-Range Nuclear Forces Treaty, that it has with Russia. The reason for the withdrawal is that the US says, Russia has violated the treaty for years anyway by refusing to dismantle its cruise missiles.
- The government shutdown in America ended late last week, but the threat of another shutdown lingers/looms. Democrats and Republicans have three weeks to come to an agreement regarding Trump’s wall – Trump has said that he is willing to endure another government shutdown or declare a national emergency to gain funds from the Defence Department to build his wall.
- The US Treasury is likely to borrow $1 trillion to finance the government’s budget deficit, this would be the second year in a row.
- President Trump’s Attorney General William Barr suggested that he may be prevented from releasing Robert Mueller’s report. Barr implied that Justice Department standards might prevent him from releasing the report. He also said that he would resign if Trump demanded Mueller’s dismissal if it were based on spurious claims.
- US prosecutors filed charges against Huawei Technologies this week, for allegations that it stole trade secrets, violated sanctions against Iran, and sold potential spyware to China.
- Senator Bernie Sanders has proposed an estate tax of up to 77% on the value of estates above $1billion.
Local News
- This week the monthly budget figures were released, in December the national government fiscal balance swung to a surplus of R14.5bn, after it recorded a R16.9bn deficit in November
- South Africa also registered a larger than expected trade surplus of R17.1bn in December.
- The dovish Fed encouraged a rally in risk assets which benefitted the rand, and other Emerging Market currencies. The rand strengthened by 7.4% against the dollar in January.
- Follow this link to an article from Fin24, ANALYSIS: 6 things to look out for in SONA and Budget 2019.
Source: Dynasty, Stanlib, Prescient, Daily Maverick, Moneyweb, Reuters, RMB, Aljazeera, and Bloomberg Markets, etc
