- In the US, it was thought that the markets would stumble in the event of a Trump victory. In actuality, they have performed relatively well.
- The stock markets had their best performing week in two years. The S&P 500 Index increased by 3.8%, the Nasdaq rose 3.8%, the smaller-cap Russell 2000 index increased by almost double that at 7.6%, nearly hitting it record high. It remains to be seen whether this rebound in equities will materialise or whether it is a knee-jerk reaction.
- The US 10-year Bond rose by 50 bps to 2.3% since the 9 November 2016.
- The MSCI Emerging Market Index lost -3.5%, in dollar terms, last week.
- The MSCI Emerging Markets Index is still +9.5% (including dividends) in 2016, ahead of the +4.5% total return of the developed market MSCI World Index (both in dollars).
- Over the past month, the European Central Bank’s (ECB) balance sheet increased by 1.9%, the Bank of Japan’s (BoJ) increased by 1.5% and the Bank of England (BoE) increased by 5%.
- Global PMI rose to 53.3% in October, recovering from its recent low of 50.8%.
- The strong dollar, facing its highest levels versus the euro since January 2016, is impacting precious metal prices but thebig industrial metals, copper and iron ore had large gains over the last week.
- Iron ore bounced by 14%, while copper saw a 19% increase, both in dollar terms.
- Brian Molefe, CEO of Eskom, resigned last week. This came after he was named in former Public Protector, Thuli Madonsela’s state capture report.
- The rand weakened by 9% against the US dollar last week, equities and bonds sold off by 2% and 3% respectively.
- South Africa’s returns for its four assets classes:
- All Bond Index +12.5% total return so far in 2016
- Cash +6.3%
- SA Listed Property +5.0%
- JSE All Share Index +1.6% (+9.1% in dollars)
- Mining shares on the JSE saw massive increases last week: Glencore +24%, Kumba +19%, BHP Billiton +18%, Assore +15%, Anglos +13%, South 32 +13% and African Mineral Resources +11%.
- The top 5 shares (60% of the index) are all rand-hedges and have had dismal year so far, with Naspers -17% from its record high in September and -0.9% so far in 2016, Richemont -13% in 2016, despite a very good bounce from its low point, British American Tobacco -10.7% in 2016, MTN -15.7% and Steinhoff -11.1%.
Source: Dynasty, Stanlib, Efficient Select, Prescient, Moneyweb & Bloomberg Markets etc.