Not a member? Register | Lost your password?

Weekly Market Focus - 22 April 2019

Markets

WEEKLY FOCUS: A yearly drawdown of 10% in the S&P500 is the norm                                        22 April 2019

 

 

Indices remained close to their year to date highs during a holiday shortened week with 80% of S&P500 sector indices  at those levels and the Nasdaq has also reached an all-time high. ‘FAANG’ stocks (tech leaders) which were the drivers of market growth during large parts of the past 2 years have regained their leadership position as the VIX index of volatility sunk below 16.

Data on fund flows from the Investment Company Institute on the participation of investors in US domestic equities shows large amount of uninvested cash. This is a good contrarian indicator and supports further market highs, but the timing of entry remains critical at such levels. The average drawdown in the index since 2010 has been 10% (see above chart) and is an indication that patience could fetch better rewards.

 

The Citi Economic surprise index, a measure of economic data released compared to analysts’ expectations shows weakness globally, but nominal data remains healthy: Retail sales, the highest component of US GDP has rebounded to 3.6% y/y growth in March, the household debt service ratio remains at cyclical lows below 10% and is also at cyclical lows of 76% compared to nominal GDP.

 

In Europe, the Brexit uncertainty, yellow vest protests in France and automobile sector weakness in Germany is taking its toll on industrial growth as the PMI manufacturing data for the latter 2 economies remain below the 50 boom/bust level. On the other hand the soft patch seen in China from December 2018 to February seems to be receding as the effects of multiples cuts in the reserve requirement ratio of banks and an increase in local government debt issuance seems to be boosting consumption and stabilizing the economy.

 

 

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,905

-0.08%

16.87%

S. Africa

3,638

2.04%

12.04%

Stoxx50

32

0.67%

15.80%

FTSE100

7,460

0.22%

10.78%

DAX

12,222

1.74%

15.75%

CAC40

5,580

1.30%

19.27%

Swiss Mkt.

9,571

1.13%

13.55%

FTSE MIB

21,957

0.26%

19.82%

Shanghai Comp

3,250

1.93%

30.33%

BSE Sensex

39,140

0.96%

8.49%

Nikkei

22,090

1.00%

10.37%

Major currencies

 

 

 

USDZAR

14.06

0.31%

-2.58%

EURUSD

1.12

-0.26%

-1.81%

GBPUSD

1.30

-0.44%

2.29%

USDCHF

1.02

1.28%

3.18%

EURCHF

1.14

1.01%

1.25%

USDJPY

111.97

0.30%

1.53%

EURGBP

0.86

0.17%

-4.04%

USDAUD

1.40

-0.39%

-1.51%

Dollar Index

97.15

0.35%

1.24%

Commodities 

 

 

 

Brent

71.97

1.61%

37.87%

WTI Oil

64.00

0.66%

41.19%

Copper

2.92

0.76%

8.84%

Aluminum

1,868.50

-0.46%

-2.45%

Platinum

907.40

1.11%

14.82%

Sugar

12.76

0.79%

2.99%

Corn

358.50

-0.42%

-4.53%

Coffee

90.20

-0.06%

-10.65%

Gold

1,271.90

-1.30%

-1.35%

Cotton

77.34

0.44%

7.02%

Sovereign Yields

 

 

 

US10Y

2.56

0.06

(0.16)

UK10Y

1.20

0.04

(0.07)

Germany10Y

0.02

0.03

(0.21)

     
     

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

 

 



Twitter
Facebook
Connect with us