Not a member? Register | Lost your password?

Weekly Market Focus - 18 February 2019

Markets

WEEKLY FOCUS: Retail sales data is tracking the 2015 mini-cycle                                              18 February 2018
 

 

Major equity indices rose strongly to end between 2% and 4% higher for the week. A potential government shutdown was averted in the US and the deadline of March 1 for a trade agreement with China was extended. Also Benoit Coeure, an ECB official said that the slowdown in the Eurozone had been longer and deeper than expected and hence a fresh round of cheap long term loans for banks was being considered. This reversal of policy stance by the ECB after being hawkish during last year is similar to the US FED’s U-turn in January and is a sign that there is a central bank ‘put’ in Europe also. As economic data slows sequentially mostly because of higher base effects, policy will become more dovish and supportive of risk assets.

 

Retail sales data for the US fell by 1.2% over the previous month and was responsible for a revision in the GDP forecast of the Atlanta Fed to 1.5%, a more realistic figure compared to the 2.7% of a few weeks back which was too optimistic. From some perspectives, it is better to analyse year on year numbers which still indicate a 2.05% growth consistent with a softer GDP but which is nevertheless growing. (please see chart above)

 

Factset data shows that 79% of companies within the S&P500 have reported a blended earnings growth rate of 13% for the past quarter and the forward 12 month PE for the index is currently at 16, just below the 5 year average of 16.4 and this is an indication that equity prices are not stretched. Interestingly, the Nasdaq index minus its FAANG components (larger technology stocks which drove the index last year and are behind this year) is just under 1% above its all- time highs. This FAANG slowdown is principally on account of steep comparatives and is an indication of the benefit of diversification.

 

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,776

2.50%

11.66%

S. Africa

3,307

0.89%

1.84%

Euro Stoxx50

3,242

2.42%

8.02%

FTSE100

7,237

2.34%

7.47%

DAX

11,300

3.60%

7.02%

CAC40

5,153

3.86%

10.14%

Swiss SMI

9,242

2.65%

9.64%

FTSE MIB

20,212

4.45%

10.31%

Shanghai Comp

2,682

3.79%

7.56%

BSE Sensex

35,809

-2.02%

-0.74%

Nikkei

20,901

2.79%

4.43%

Major currencies

 

 

 

USDZAR

14.08

3.35%

-2.40%

EURUSD

1.13

-0.31%

-1.25%

GBPUSD

1.29

-0.44%

1.45%

USDCHF

1.01

0.50%

2.12%

EURCHF

1.14

0.19%

0.80%

USDJPY

110.50

0.70%

0.20%

EURGBP

0.88

0.14%

-2.69%

USDAUD

1.40

-0.82%

-1.44%

Dollar Index

96.74

0.34%

0.81%

 Commodities 

 

 

 

Brent

66.31

6.78%

27.03%

WTI Oil

55.59

5.44%

22.63%

Copper

2.80

-0.43%

4.36%

Aluminum

1,825.75

-3.10%

-1.11%

Platinum

808.55

0.79%

2.32%

Sugar

13.14

3.38%

6.05%

Corn

374.75

0.13%

-0.20%

Coffee

97.95

-4.53%

-2.97%

Gold

1,322.10

0.27%

2.54%

Cotton

70.22

-3.12%

-2.84%

 Sovereign Yields

 

 

 

US10Y

2.66

0.03

(0.05)

UK10Y

1.16

0.01

(0.11)

Germany10Y

0.10

0.02

(0.13)

     

Contact us: Durban +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