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Weekly Market Focus - 11 March 2019

Markets

WEEKLY FOCUS: Bracing for a dip to allocate capital                                                                           11 March 2019

 

 

All major indices ended the week in the red after the S&P500 could not capture the 2,814 technical level for the fifth time since mid-October. The positive news flow surrounding earnings season is behind us and the central bankers, European Commission, IMF, OECD and other institutions reviewing their growth forecasts downwards is acting as a headwind for risk assets. As we explained in previous columns, the projections were too optimistic after 9 consecutive quarters of acceleration of GDP growth in the US and higher base effects are a major factor for the revisions. Short term traders (using the Commitment of Traders data chart above) have turned bearish and this is a sign that we could have a dip in the near term which would be an opportunity to enter the market at more attractive prices.

 

As forecast, central bankers have changed their policy stance one by one and the ECB was the latest as they announced a round of soft loans to banks as from September 2019, delayed their rate hike projections further and excluded balance sheet reduction well after a hypothetical rate increase.

The US non-farm payrolls addition for February was a modest 20,000 but the positive trend remains strong as the unemployment rate further improved to 3.8%. Oil prices continued their rebound after Saudi Arabia announced a reduction of supply up to at least April and this further averts deflationary fears, if there were any.  

 

Industrial production data, new car registration numbers and final inflation numbers for February for the Euro area will be released this week. In the UK, we should move towards a request for extension of Article 50 with the only unknown being the extension period. In the US, capital goods data should provide clues on the trajectory of investment spending and industrial production.   

 

 

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,743

-2.16%

10.35%

S. Africa

3,354

-0.83%

3.30%

Euro Stoxx50

3,284

-0.86%

9.40%

FTSE100

7,104

-0.03%

5.50%

DAX

11,458

-1.24%

8.51%

CAC40

5,231

-0.65%

11.81%

Swiss Mkt.

9,268

-1.53%

9.95%

FTSE MIB

20,484

-1.02%

11.79%

Shanghai Comp

2,970

-0.81%

19.08%

BSE Sensex

36,671

1.68%

1.65%

Nikkei

21,026

-2.67%

5.05%

Major currencies

 

 

 

USDZAR

14.44

1.48%

0.07%

EURUSD

1.12

-1.20%

-1.73%

GBPUSD

1.30

-1.42%

2.44%

USDCHF

1.01

0.90%

2.41%

EURCHF

1.13

-0.31%

0.58%

USDJPY

111.17

-0.67%

0.81%

EURGBP

0.86

0.22%

-4.10%

USDAUD

1.42

0.50%

-0.06%

Dollar Index

97.27

0.85%

1.36%

 Commodities 

 

 

 

Brent

65.74

1.03%

25.94%

WTI Oil

56.07

0.48%

23.69%

Copper

2.89

-1.33%

7.90%

Aluminum

1,845.25

-3.20%

-0.05%

Platinum

818.85

-5.03%

3.62%

Sugar

12.18

-3.49%

-1.69%

Corn

354.75

-2.54%

-5.53%

Coffee

95.30

-1.70%

-5.60%

Gold

1,299.30

0.01%

0.78%

Cotton

73.33

-0.76%

1.47%

 Sovereign Yields

 

 

 

US10Y

2.63

(0.13)

(0.09)

UK10Y

1.19

(0.11)

(0.08)

Germany10Y

0.07

(0.11)

(0.16)

 

Contact us: Durban +27 (0) 31 566 3365 | CPT +27 ( 0 ) 21 851 0920 | JHB +27 ( 0 ) 11 017 7230 | Email: enquiries@pegasus-wm.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

 

 



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