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Weekly Market Focus - 30 September 2019

Markets

WEEKLY FOCUS: A definitive sector rotation is not apparent yet                                                      30 September 2019

 

 

US Equities ended the week slightly lower in a week dominated by political headlines: President Trump piled the pressure on China during his United Nations speech but was more conciliatory one day later. On the domestic front, House Speaker Nancy Pelosi endorsed an impeachment inquiry against the President but this requires a two third majority in the Republican controlled Senate to succeed.

 

There was divergence at the sector level as typically defensive sectors like utilities, staples and real estate gained while energy and communication services segments ended in the red (chart above). The growth sensitive small capitalization stocks continued to lag and called into question the possibility seen at the start of the month of a change of market leadership. Meanwhile personal spending rose in August but by only 0.10% and personal incomes rose by a healthy 0.4%. Business investment fell in August for the second consecutive month.

 

In Europe, major indices were pressured lower after the flash manufacturing PMI data for Germany recorded its worst reading in over a decade at 41.4. The Eurozone data was the worst in seven years and the services index will now be scrutinized to see if there is any broader contagion. In the UK, it seems the Bank of England would be in favour of lowering the benchmark interest rates irrespective of what happens on the Brexit front.

 

The embattled Prime Minister is facing an uphill battle after multiple defeats in parliament and defections within his Conservative party. Elsewhere, Japan reached a mini-trade deal with the US and will lower tariffs on agricultural products. The deal does not address auto-exports on which the US could impose higher taxes but both countries will resume talks in 2020

 
  Value 1 Week YTD

Equity Indices

 

 

 

S&P500

2,962

-1.00%

18.15%

S. Africa 40

5,510

-1.26%

4.88%

Stoxx50

3,555

0.52%

18.45%

FTSE100

7,414

1.20%

10.20%

DAX

12,398

0.45%

17.42%

CAC40

5,654

0.41%

19.52%

SMI Index

10,036

0.39%

19.06%

FTSE MIB

22,060

0.71%

20.36%

Shanghai Comp

2,905

-2.41%

16.49%

BSE Sensex

38,667

-1.08%

7.21%

Nikkei

21,756

-1.46%

8.70%

Major currencies

 

 

 

USDZAR

15.18

1.85%

5.68%

EURUSD

1.09

-0.66%

-4.80%

GBPUSD

1.23

-1.03%

-3.57%

USDCHF

0.99

0.48%

1.32%

EURCHF

1.09

-0.17%

-3.53%

USDJPY

107.95

0.38%

-1.47%

EURGBP

0.89

0.37%

-1.27%

USDAUD

1.48

0.30%

4.43%

Dollar Index

99

0.68%

3.29%

 Commodities 

 

 

 

Brent

60.33

-6.93%

12.04%

WTI Oil

55.23

-5.82%

21.63%

Copper

2.61

-0.19%

-1.51%

Platinum

927.20

-3.30%

15.75%

Sugar

12.66

12.83%

5.24%

Corn

372.38

-0.33%

-0.80%

Gold

 1,493.55

-2.47%

13.80%

 Sovereign Yields

 

 

 

US10Y

1.69

-1.68%

-36.93%

UK10Y

134.14

-0.41%

8.90%

Germany10Y

-0.56

-3.09%

-329.67%

 Deposit rates with selected banks

 

Investec Bank 32 days CCM - USD

1.20%

 

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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