Global News:
- In the US, share prices are at new highs – promoted by the strengthening economy, consumer confidence, anticipated profits and reduced taxes.
- US factory orders saw an increase that was slightly higher than expected at 2.7% month-on-month in October; it was expected to gain 2.6%. Overall, orders rose by 1.3% year-on-year, this is the second positive reading after 22 months of declines.
- In Europe, Q3 GDP came in at the same rate as the previous quarter, 0.3% quarter-on-quarter.
- The European Central Banks (ECB) meeting on, 8 December 2016, committed to extend its quantitative easing program to beyond March 2017.
- Globally, the MSCI World Index total return is 8.6% in dollar terms (-3.2% in rand) for 2016.
- The MSCI Emerging Market Index, including dividends, is up 13.2% in 2016. This is still ahead of the developed market index which gained 8.6% this year. The EM index has stabilised since the downturn it experienced when Trump won the US presidential election.
Local News:
- In SA, GDP growth for the Q3 was slightly below expectations at 0.2% quarter-on-quarter annualised (seasonally adjusted), in contrast to the predicted 0.6%.
- October manufacturing and mining output data released last week provided little hope for a significant improvement in Q4.
- The seasonally adjusted output for the manufacturing sector fell sharply during October, by 1.9% month-on-month. Falling back more than it gained in September (1.3%). This is a contraction of -2.7% year-on-year, far worse than the consensus of 0.7%.
- The seasonally adjust output for the mining sector fell by 1.2% month-on-month, and -2.9% year-on-year. This again was worse than consensus which estimated a rise of 2.3% year-on-year.
- The latest asset class returns for 2016 are: Bonds +15%, Cash +6.9%, Property +6.8% and the JSE ALSI +3.1% (+14.8% in US dollars).
- Big Mining shares have been moving higher; BHP Billiton hit a new high for 2016 on Monday, 13 December 2016. The iron ore price is at a two-year high, gaining 87% in 2016. Copper has also seen a large boost, increasing by 26% since late October.
- BHP is up 40% this year in rand terms, reaching its highest level in 18 months. Both Anglos and Glencore hit record highs for 2016.
Source: Dynasty, Stanlib, Efficient Select, Prescient, Moneyweb & Bloomberg Markets etc.
