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Weekly Focus - 17 February 2020

Weekly Focus               17 February 2020

Analysts’ estimates for US corporations remain bullish
 

 

Major indices recorded another week of solid gains. Within the S&P500 which rose by just under a percent, the defensive real estate and utilities sectors performed best. The healthcare, staples and financial sectors lagged but ended the week higher. The technology and communication services sectors also continue to show solid growth. The testimony of FED chair Powell to Congress boosted sentiment and the CME FED Watch tool showed that a majority of market participants expect the central bank to lower rates at its meeting in July or September. It is possible that a rate cut would coincide with proposed tax cuts which the outgoing Trump administration will present to voters for his re-election campaign.

On the macroeconomic front, weekly jobless claims data showed the series remains at a multi decade low and retail sales data released on Friday indicated an expansion of 0.3% in January. These are positive signs that corporations will continue to expand revenues. Factset estimates that the bottom up price target for the S&P500 for the next 12 months is 3,637 and this is 7.8% higher than the closing price of last Friday. (see chart above). However, the Industrial sector remains weak after a consecutive month of decline due in part to a halt in the production of the 737Max airliner by Boeing and disruption in supply chains due to the Covid-19 virus.

Meanwhile, European stocks also advanced but the FTSE100 was little changed following the abrupt resignation of Sajid Javid, the Chancellor of the Exchequer after a disagreement over fiscal rules which the government wants to relax. The Bank of England Governor seemed to agree with the government as he said in a testimony to the House of Lords, that interest rates would remain low for the foreseeable future and that business and government investment should be increased to boost GDP growth.

 

 

Value

1 week

YTD

Equity Indices

 

 

 

S&P500

3,380

0.84%

4.62%

FTSE JSE All Share

58,092

2.31%

1.89%

Stoxx50

3,850

1.50%

2.80%

FTSE100

7,438

-0.13%

-1.40%

DAX

13,767

2.04%

3.92%

CAC40

6,082

1.11%

1.74%

SMI Index

11,178

1.26%

5.29%

FTSE MIB

25,008

2.05%

6.40%

Shanghai Comp

2,984

3.22%

-2.18%

BSE Sensex

41,056

0.19%

-0.48%

Nikkei

23,523

-0.69%

-0.56%

Major currencies

 

 

 

USDZAR

14.90

-0.40%

6.40%

EURUSD

1.08

-0.63%

-3.30%

GBPUSD

1.30

0.79%

-1.84%

USDCHF

0.98

0.46%

1.42%

EURCHF

1.06

-0.17%

-1.93%

GBPZAR

19.39

0.20%

4.36%

EURGBP

0.83

-1.41%

-1.43%

USDAUD

1.49

-0.53%

4.45%

Dollar Index

99

0.30%

3.08%

 Commodities 

 

 

 

Brent

57.27

7.51%

-13.23%

WTI Oil

 52.34

5.59%

-14.28%

Copper

2.63

2.94%

-6.15%

Platinum

 971.70

0.65%

-0.02%

Sugar

 15.00

-0.27%

11.77%

Corn

377.62

-1.08%

-2.61%

Gold

1,583.95

0.61%

4.01%

 Sovereign Yields

 

 

 

US10Y

1.59

1.60%

-17.25%

UK10Y (price)

133.59

-0.64%

1.70%

Germany10Y

-0.40

-1.46%

116.58%

 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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