Not a member? Register | Lost your password?

Weekly Market Focus 20 August 2018

Markets

WEEKLY FOCUS – Which Sectors might outperform the market from here?    20 August 2018

 

The S&P500 rose to close to its all-time high last week as a stellar reporting season, characterised by strong growth in earnings, revenue and margins, drew to a close. Momentum indicators, corporate data and economic forecasts, however, indicate the end of this phase and the start of another which is likely to see the emergence of new bulls, i.e. new sector leaders in the coming quarters. The chart above shows cyclical sectors prominently, but the price performance of sector ETFs over the past month indicates that defensive sectors are rebounding and is an indication that the fight for market leadership is on.

 

As we move toward the year end, some major themes will dominate. The EU and UK have to strike a deal on Brexit well before the formal exit date of 29th March 2019 to provide both parties time for ratification. The Bank of England has started to raise interest rates to counter a tight labour market and just above trend growth, but the direction of Sterling will largely be dependent on the type of Brexit agreed which is far from clear.

 

The trade war between the US and China is set to continue as many analysts suggest that China has little more to offer in terms of concessions, but the Trump administration seems likely to continue its higher tariffs policy. A survey from the Atlanta Fed shows few companies have changed their investment plans as a result of the tariffs and hence US expansion should not be affected.     

 

The mid-term US elections on 6 November is important because if the Republicans win both the House and the Senate, it will allow the Trump administration to focus more on domestic policy and pursue his electoral promises. This might provide relief to trade tensions and boost global growth.

 

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,850

0.59%

6.60%

S. Africa

3,392

-3.06%

-10.52%

FTSE100

7,559

-1.41%

-1.68%

DAX

12,211

-1.72%

-5.47%

CAC40

5,345

-1.29%

0.61%

Swiss Mkt.

9,004

-0.30%

-3.56%

FTSE MIB

20,415

-3.20%

-6.58%

Shanghai Comp

2,669

-4.52%

-19.30%

BSE Sensex

37,948

0.21%

11.43%

Nikkei

22,270

-0.12%

-2.17%

Major currencies

USDZAR

14.64

3.81%

18.34%

EURUSD

1.14

0.25%

-4.66%

GBPUSD

1.28

-0.13%

-5.65%

USDCHF

1.00

0.05%

2.21%

EURCHF

1.14

0.26%

-2.57%

USDJPY

110.50

-0.40%

-1.94%

EURGBP

0.90

0.36%

1.03%

USDAUD

1.37

-0.19%

6.67%

Dollar Index

       95.98

-0.25%

4.52%

 Commodities 

Brent

71.83

-1.35%

7.42%

WTI Oil

65.91

-2.54%

9.09%

Copper

2.62

-3.95%

-20.00%

Aluminum

 2,033.75

-2.59%

-10.62%

Platinum

788.10

-4.91%

-15.68%

Sugar

10.18

-3.42%

-32.85%

Corn

364.25

1.82%

3.85%

Coffee

101.20

-5.42%

-19.81%

Gold

 1,176.50

-2.86%

-10.14%

Cotton

81.43

-4.44%

3.77%

 Sovereign Yields

 

 

US10Y

2.86

(0.01)

0.46

UK10Y

1.24

(0.01)

0.05

Germany10Y

0.31

(0.02)

(0.12)

 

 

 

 

Contact: DBN +27 ( 0 ) 31 566 3365 | CPT +27 ( 0 ) 21 851 0920 | JHB +27 ( 0 ) 11 017 7230 | Email:enquiries@pegasuswm.com
Disclaimer: The research report has been prepared for information purposes and does not constitute an offer. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and the company accepts no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this report
 

 



Twitter
Facebook
Connect with us