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Which part of the market cycle are we in: stagflation or deflation? ‘Inflation is trending upwards; what you should be after is investments in asset classes that will help you protect the real value of your money’ – Adriaan Pask, PSG Wealth.

What the two-pot retirement system may mean for your retirement plans What the two-pot retirement system may mean for your retirement plans Ronald King, Head of Public Policy and Regulatory Affairs at PSG Wealth Times are tough. And National Treasury are worried that rising financial pressure could see people increasingly resigning from jobs in order to access a porti...

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In celebrating Women's Month, Kobie-Marie Kritzinger from PSG Menlyn talks to Ann Mackeurtan, the JSE's first female stockbroker about her achievements and the challenges she faced during her distinguished career.

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PSG Wealth comes out tops at prestigious awards PSG Wealth was again recognised as the Top Wealth Manager of the Year: Large Institutions at the prestigious digital Intellidex Top Private Banks and Wealth Managers Awards, for the fourth consecutive year. The firm dominated this year’s awards, also securing three archetype awards: lump-sum inves...

Suspended oil production in the US Gulf due to Hurricane Ida caused the price of oil to fall yesterday and over the weekend. Brent crude recovered somewhat at 18h00 on Monday trading at $72.49 a barrel.

The JSE closed down by almost 1% yesterday pulled down by the industrial sector.

Most global markets closed in the green after sentiment towards growth assets got a boost from the dovish comments from US Federal Reserve Chairman, Jerome Powell at the Jackson Hole Economic Symposium held this past weekend.

Powell indicated that the “central bank would taper by the end of the year, but gave no timeline and said an interest rate hike is still far away, while reiterating inflationary pressures are temporary,” Reuters reported.

Hopes that continued central bank support would sustain an economic recovery offset woes over rising Delta Covid-19 variant cases in Europe.

While UK markets were closed for a bank holiday, Germany’s DAX and France’s CAC 40 both closed in the green.

Hong Kong’s Hang Seng also enjoyed the positive sentiment caused by the Fed’s dovish comments over the weekend.

The Nikkei also closed higher even though Japan struggles to contain a fifth wave of Covid-19 infections.

Gold’s safe-haven appeal was dashed after Powell’s dovish remarks, causing the price to fall slightly but still trading above $1 800 an ounce last night.

Shares in the greater part of Europe were on track to reach multi-week highs on Friday afternoon after US Federal Reserve Chair Jerome Powell maintained his dovish stance on monetary policy, while Norway’s real estate firm, Entra, led gains on the STOXX Europe 600 with an intraday best of 4.60% “as its peer Castellum purchased a stake in the firm using the government’s pension fund,” Reuters reported.

US equities jumped following Powell’s speech at the Jackson Hole Economic Policy Symposium in Kansas City on Friday as market participants disregarded rising Covid-19 cases and sluggish growth concerns. Powell’s remarks about the dangers of prematurely withdrawing the monetary support that has sustained the US economy since the Covid-19 made its debut and emphasis on the fact that “there’s much ground to cover to reach the Fed’s employment objective” suggested that the central bank may put off tapering until the last quarter of the year.

Although oriental shares struggled for direction on Friday, they were on track for their greatest week in six months as Chinese markets welcomed central bank liquidity, however, comments from the Fed’s more hawkish policymakers capped gains and boosted the dollar against a basket of global currencies. The rand maintained its yield advantage over advanced markets after Powell’s remarks prompted a decline in US Treasury yields.

Supporting gold prices, which are highly sensitive to fluctuating US interest rates, Powell used the unwavering rise in Covid-19 infections to “buy time for more employment data before a taper announcement,” according to Bloomberg analysts. Spot gold rose 1.19% to $1 816.60/oz, while US gold futures settled at $1 819.50 by 17h30 on Friday. Oil prices gained over 2% in intraday trade on Friday, marking the biggest weekly gain in over a year, “as energy firms began shutting US production in the Gulf of Mexico ahead of a major hurricane expected this week,” according to Reuters

Investors acted with caution on Thursday ahead of US Federal Reserve Bank (Fed) Chairman Jerome Powell’s address at the Jackson Hole economic symposium later today.

The uncertainty of what to expect from the conference pushed investors to shy away from risk-heavy trade, leading to most global indices posting losses.

Industrial metals and food producers detracted the most from the local market, while the rand extended gains, clocking an intraday high of R14.86/$.

The S&P 500 and the Nasdaq took a knock at the start of trade due to mixed earnings results, US economic data and the Kabul airport attack in Afghanistan.

Rising Covid-19 infections in Europe, weaker German consumer morale as well as the Kabul blast towards the end of trade weighed heavily on European markets.

In Asia, the Hang Seng was anchored by the tech sector, while Japan’s Nikkei edged up thanks to transport shares.

Gold prices made up losses close to the end of trade as investors awaited the Jackson Hole symposium.

However, oil’s three-day surge snapped due to rising Covid-19 infections, muted equity markets and Mexico restoring some output after Sunday’s fire.

Most global indices were muted on Wednesday as investors eagerly awaited US Federal Reserve Bank (Fed) Chairman Jerome Powell’s speech to be delivered at the Jackson Hole economic symposium later this week.

The address is said to provide some direction regarding the plans. Central bankers are set to convene and discuss US economic issues, such as easing its $120 billion monthly bond-buying programme, which aided economic growth during the Covid-19 pandemic.

However, the States are facing another infection rate surge amid a lacklustre vaccination approach from citizens.

The Nasdaq started trade at a record high, lifted by strong performances from tech shares. European markets also struggled due to losses from Italian utilities “after brokerage RBC turned more negative on its expectations of future returns”.

Looking at commodities, gold lost some ground due to the greenback strengthening as investors hoped that the Fed would provide an economic support tapering timeline this week.

Brent crude reported an over 10% rise in three consecutive days as US data showed demand had reached its highest point since the start of the pandemic.

On Tuesday the local market extended gains, after the US Food and Drug Administration (FDA) approved another Covid-19 vaccine.

Wall Street opened trade on a high note thanks to solid performances from energy and travel counters after the FDA granted full approval to the Pfizer Covid-19 vaccine to boost their immunisation drive amid another wave of infections.

European indices closed flat as investors refrained from major activity ahead of the US Federal Reserve’s (Fed) monetary policy update later this week.

Asian markets continued their upbeat momentum, with Japan’s Nikkei closing up, tracking an overnight rally on Wall Street boosted by tech, energy and transport shares.

In commodities, gold prices rose for another session as the rising US infection rate bolstered expectations that the Fed would move away from tapering economic support at its Jackson Hole economic symposium on Friday.

Brent crude prices also firmed after a fire at a Mexican oil platform “on Sunday killed five workers and took 421 000 barrels per day of production — about a quarter of the country’s overall output — offline”.

Spot gold broke the $1 800/oz threshold on Monday as investors flocked to bullion due to a softer greenback, rising Covid-19 infections and expectations that the US Federal Reserve might delay tapering economic support.

Brent crude also enjoyed a superb day, jumping over 5% in light of a weaker US dollar and risk-on sentiment.

The local bourse tracked global indices higher, with miners and resources leading gains and investors making the most of the previous week’s losses. Wall Street opened higher, lifted by oil and banks as sentiment shifted to risk-on trade.

The stronger commodities sector boosted oil and mining shares, which helped European markets bounce back from posting near six-month lows last week.

In Asia, the Hang Seng posted gains due to solid performances from tech and healthcare, and China’s Shanghai rose on the back of no new Covid-19 cases – the first since July 2021.

A strong performance from the auto sector led to the Nikkei closing up after Toyota Motors announced plans to reduce global production by 40% in the coming month.

US markets ended higher on Friday thanks to a rally in tech-related shares, following a turbulent week mostly underpinned by speculation over when the US Federal Reserve (Fed) will start to reduce its stimulus support, the spread of the Covid-19 Delta variant and China’s regulatory tightening on key sectors.

European shares posted the biggest weekly decline in five months on Friday as signs of slowing growth and the proliferation of the Delta variant kept investors on edge, while a decline in commodity prices pushed mining stocks to record lows.

Asian markets also fell on heightened concern that new mutations of the virus could worsen their underperformance relative to global peers, while more than $1 trillion was expunged from Chinese markets in a week where regulatory tightening weighed on investor confidence.

The JSE extended losses, tracking the global slump in equities, while the rand was amongst the worst-performing emerging currencies, trading at R15.30/$ at 17h00 on Friday.

Fears that a spike in Covid-19 cases could undermine the global economic outlook drove investors toward safe-haven investments including gold, but gains were capped by the strength of the US dollar after it reached a near 10-month high on Friday.

Crude prices extended losses, posting a weekly decline of more than 8% as investors ditched futures in anticipation of poor fuel demand.

Wall Street relished gains in defensive and heavyweight tech stocks on Thursday, while market participants speculated over when the US Federal Reserve (Fed) will start to reduce its stimulus support.

European shares shed over 1% amid fears of premature policy tightening, while a decline in commodity prices pushed mining stocks to new lows.

“Although the European Central Bank has so far stood pat on its policy, rising inflation has sparked fears that global central banks would start to rein in their easy money policies that have been instrumental in lifting global stock indexes to record highs,” Reuters added.

Asian stocks were mixed as a summary of the Fed’s July meeting minutes, which suggested a willingness to start reducing its bond-buying programme before year-end, coincided with gains from Fujifilm and other noncyclical stocks.

However, Fed officials emphasised that any quantitative easing was not a prelude to an interest rate hike.

The JSE extended losses, tracking the global slump in equities, while gold prices fell on the back of a stronger greenback.

Crude prices were in a downward spiral as investors fretted about fuel demand as the pandemic continues to unsettle global markets.

Wall Street wobbled on Wednesday after the US Federal Reserve (Fed) meeting minutes hinted that there was a strong chance that the central bank could start reducing asset purchases before the end of the year as the economy improved.

For July 2021, the Fed’s target range for its federal funds rate remained unchanged at 0% to 0.25% and the bond-buying pace was kept at $120 billion per month.

Reuters reported that: “Fed officials expressed a range of views on the appropriate pace of tapering asset purchases, but most noted that it could be appropriate to start reducing asset purchases this year, provided that the economy evolves as anticipated.”

Other officials noted that while the economy had improved, it still had a long way to go before reaching the desired target of maximum employment and price stability, and that plans to taper asset purchases should also consider the possibility that the reductions might not occur immediately and highlighted that the risks associated with rising Covid-19 cases could delay the economic recovery.

At 20h00, the Dow fell by 1.08%, while the S&P 500 and Nasdaq lost 1.05% and 0.89%, respectively.

European markets were dealt a different fate on Wednesday, led by a rally in travel stocks, and Asian markets made up lost ground supported by defensive stocks.

In commodities, gold prices saw a boost after the Fed’s meeting minutes were released. However, crude prices continued a multi-day slump as market participants expressed concern about fuel demand as the pandemic continues to rattle global markets.

Wall Street took a knock on Tuesday, following a decline in mega-cap tech stocks and a disappointing earnings report from Home Depot, while a decrease in US retail sales fuelled concerns about the economic recovery.

Reuters reported that retail sales fell more than anticipated in July 2021, "as supply shortages weighed on motor vehicle purchases and the boost to spending from the economy's reopening and stimulus checks faded, suggesting a slowdown in economic growth".

European shares touched a one-week low on Tuesday as a sharp increase in Covid-19 cases in parts of Asia did little to calm fears of a slowdown in the global economic recovery, while market participants remained anxious about China's regulatory crackdown on key sectors and lockdown restrictions.

Asian stocks were mixed as investors digested weak economic data from China and tracking developments in Afghanistan, with the deteriorating situation in Kabul having overshadowed strength on Wall Street.

Taliban, which is a Deobandi Islamist movement and military organisation in Afghanistan, has assumed control of the capital city, and fears about a return to the organisation's brutal rule have since been mounting after President Joe Biden withdrew the US military and ordered an evacuation of the US embassy in Kabul.

In local news, the JSE ended higher on Tuesday, notwithstanding the weaker global trend, owing to a stellar performance by miners; however, gains were capped by a decline in Naspers shares after China tightened regulations for companies in the internet sector.

In commodities, gold prices rose for a fifth consecutive session, buoyed by falling US bond yields, while oil prices eased as more nationwide lockdowns diminished demand prospects.

Disappointing data from the world’s second-largest economy drove a global slump on Monday with commodity-linked stocks faring worst.

China’s factory output and retail sales slowed in July 2021 as rising Covid-19 cases and floods hampered business activity.

All three major Wall Street indices were mostly flat after Chinese data dulled investor sentiment and fueled concerns of a slowing global economy, further encouraging a flight to defensive stocks amid political unrest in Afghanistan.

Over the last few days, Taliban forces overran the Afghan military and assumed control of the capital city of Kabul, which experts say adds to the political risks already facing the markets.

European stocks came off record highs reached last week as commodities took the hardest knock after “Chinese data raised concerns about faltering demand in the world’s major consumer of metals and oil,” Reuters reported.

The raft of weak economic data unsurprisingly weighed on Asian markets as well and experts say: “the continent’s poor vaccine rates and minimal tolerance for community spread suggest it is the region most at risk economically from the Delta variant.”

China is in the process of tapering policy support, which if done prematurely, could disrupt domestic demand growth and hurt the economy.

The Nikkei closed 1.62% in the red, marking its biggest decline in close to three weeks, while the broader Topix slid 1.61% in its sharpest decline in nearly two months.

The JSE followed global markets lower, shedding 0.81% at the close of business. At 18h00, gold traded at $1 787.42/oz, while a barrel of oil fell to $70.13.

A strong earnings season boosted markets in the US and Europe on Friday. Positive earnings reports from Walt Disney and other tech shares pushed the Dow and S&P 500 to record highs.

Signs that inflation in the US was cooling combined with a steady recovery in Europe from the pandemic-led downturn helped major European indices close the week in the green.

“Speculation that the US Federal Reserve could soon start to unwind its bond-buying stimulus calmed a bit following tame US consumer prices data (last) week,” Reuters reported.

Meanwhile, markets in Asia closed in the red on continued concerns “about Chinese regulation and the fast-spreading Delta variant of the coronavirus”.

A decrease in tech shares like Alibaba, Tencent and Meituan pushed the Hang Seng down by 0.48%.

Moreover, chip-related shares continued to impact Japanese shares, with the Nikkei closing down by 0.14%.

The JSE followed Asian markets closing flat on Friday, while the rand continued to weaken against developed market currencies.

The gold price rose slightly on Friday due to increasing concerns around the Delta variant, while the price of Brent crude continued to trade above $70 a barrel, despite forecasts of weaker demand.

Concerns that China’s regulatory crackdown on key market sectors could continue for longer than expected pushed major indices into the red on Thursday.

In a statement released Wednesday evening, the Chinese State Council said: “Areas where the country will work on legislation include national security, technological innovation and anti-monopoly practices.

Law enforcement will be strengthened in sectors ranging from food and drugs to education tutoring, where people’s immediate interests are at stake.”

The JSE closed down by 0.31% tracking declines in global markets. US indices were mixed, with two of the major indices trading in the red an hour after the JSE closed mainly due to an increase in US producer prices which investors weighed against data that showed less Americans filed for unemployment benefits in the past week.

Declines in mining shares impacted markets on the European continent. However, losses were capped when data showed that the British economy grew faster than the anticipated 1% at the end of June this year.

This “after many hospitality firms restarted indoor service in mid-May and as more people visited doctors following the pandemic,” Reuters reported.

Weaker-than-expected lending data triggered liquidity concerns in Asian markets, which were already under pressure due to regulatory changes from the Beijing government.

Japan’s Nikkei was impacted after Morgan Stanley released a report warning investors that the chip market might have peaked, causing the index to fall after four consecutive days of gains.

A stronger greenback and US Treasury yields pushed the price of gold slightly lower yesterday evening, with bullion trading at $1 751.28 an ounce at 18h40.

A report by the International Energy Agency (IEA) stating that the fast spreading Delta variant could impact global demand forced oil prices to fall, albeit slightly.

Wall Street reached record highs on Wednesday “after data showed that growth in inflation appeared to have peaked.”

“Nine of the 11 major S&P sectors rose in early trading after inflation numbers calmed some fears of early monetary policy tightening by the US Federal Reserve,” Reuters reported.

The US consumer price inflation rate came in at 5.40% y/y in July 2021, unchanged from the previous month's 13-year high, indicating the low base effect triggered by the global health crisis and persistent supply constraints.

Upward pressure came from a spike in food prices, new vehicles, and shelter, while prices eased for energy, used cars and trucks, apparel, transportation services and medical care services.

The 10-year US Treasury yield was little changed at 1.35%, while the dollar edged 0.10% lower against six global currencies at 17h00 just after the release of inflation data.

At the same time the rand strengthened against major global currencies, trading at R14.69/$, R20.37/£ and R17.25/€.

In Hong Kong the market was supported by confidence in real estate companies after the developer Evergrande Group said they would sell certain assets.

Banking shares supported the Nikkei and European indices which all closed in the green.

While the price of oil fell below $70 a barrel during the day after the US asked OPEC+ to boost output to support the economic recovery, it traded at $70.61 at 18h40.

Even though a firmer US dollar capped gains in the gold price it still rose somewhat “as concerns over the rapid spread of the Delta coronavirus variant spurred some safe haven buying.”

Major markets closed in the green on Tuesday after the US Senate passed President Joe Biden’s $1 trillion infrastructure plan.

The plan is considered one of the biggest investments in the roads, airports and waterways of the US in decades.

Shortly after the vote most US indices traded higher with only the Nasdaq trailing by 0.23%.

“Polls show that the drive to upgrade America's infrastructure, hammered out by a bipartisan group of senators over months of negotiations, is broadly popular with the public,” Reuters noted.

“The bill still has to go to the House of Representatives and the spirit of cooperation in Congress that led to Tuesday's vote will likely prove fleeting.”

Despite local manufacturing data coming in lower than expected, the JSE still closed up, supported by index heavyweights Naspers and Prosus.

Manufacturing production decreased 0.70% in June 2021 over the previous month, missing expectations of a 0.80% rise.

According to market commentators the civil unrest seen in parts of Gauteng and KwaZulu-Natal during July also impacted the manufacturing sector which accounts for about 13% of local GDP. The decline in manufacturing production is also expected to weigh on second quarter GDP growth.

Markets in Europe and Asia also closed higher yesterday, with strong earnings reports from European leisure and travel companies boosting indices on the continent.

Corporate earnings boosted Japan’s Nikkei which closed up by 0.24%, while investors in Hong Kong bought technology shares which were trading lower due to China’s regulatory clampdown.

In commodities, gold rebounded somewhat, but still traded below the psychological $1 800 an ounce level.

Rising demand of Brent crude in Europe and the US boosted oil prices which traded at $71.75 a barrel at 18:50 last night.

Although the local market closed up on Friday, it reported a loss for the week, weighed down by precious metals and resources.

The appointment of Enoch Godongwana to replace Tito Mboweni as Minister of Finance boosted the rand; however, it took a knock alongside other emerging-market currencies after the release of non-farm payrolls in the US.

Data showed that employment rose at a faster-than-expected rate, adding 943 thousand jobs compared with the market consensus of 938 thousand.

On the back of the jobs report, the S&P 500 started the day strong, although gains were muted due to inflation concerns and the effect of the Delta Covid-19 variant on economic recovery.

European indices ended the week on a positive note after a slew of upbeat corporate earnings reports fuelled hopes of economic recovery and boosted economic-related sectors such as banks.

In Asia, the Hang Seng was dragged down as investors feared stricter regulations due to rising Coivd-19 infections in China.

The Nikkei, however, enjoyed its best week in about two months, thanks to robust earnings reports.

Looking at commodities, the increase in US jobs activity led to expectations that the US Federal Reserve could start tapering economic support sooner, which pulled gold down to its lowest level in over a month.

Brent crude also posted a loss on Friday due to a stronger greenback and worries about possible travel restrictions.

Despite a rally by banks and financials, the local market was weighed down by Naspers and miners.

Naspers traded lower after China’s Securities Times newspaper continued criticism about the online gaming industry focusing on teenage addiction and favourable tax treatments.

Wall Street opened stronger on Thursday as data revealed that fewer Americans claimed for unemployment benefits.

However, investors are now keeping a close eye on the non-farm payroll data to be released later today.

In European markets, losses from miners and retailers were offset by stellar quarterly earnings results, pushing indices to record highs.

After a volatile day, the Hang Seng closed down, after an over 2% drop in the tech sector.

Although concerns about the spread of Covid-19 still loomed, Japan’s Nikkei ended the day up due to the release of several corporate earnings reports.

The gold price fell after US Federal Reserve Vice Chair Richard Clarida mentioned that “conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023” and that the bank could start tapering its asset purchase programme later in this year.

Oil posted an over 1% gain on Thursday on the back of Middle Eastern tensions; however, gains were capped by global Delta infection concerns.

In the next episode, Bruce Whitfield will host Charlize Theron, South African-born and Oscar-winning actress. To book your seat in the discussion on the future of women leadership, follow the link https://thinkbig.psg.co.za/ep/?event=PSG-Think-Big-Series-CT-

On Wednesday, the local market ended a three-day losing streak, boosted by Naspers and tech counters making up some of the previous day’s losses after the Chinese media “toned down their criticism of the gaming industry”.

Wall Street started the day on a low note as renewed Covid-19 fears fueled concerns around slowing economic growth that weighed on economic-sensitive counters such as banks and industrials.

In Europe, indices enjoyed a solid run, lifted by positive sentiment on a buoyant earnings season and tech shares reaching a 20-year high.

The Hang Seng closed up due to the tech sector recovering some of the previous day’s losses, with Tencent reporting a daily increase of over 2%.

However, the Nikkei dipped on the back of profit-taking after Toyota released upbeat quarterly earnings.

In commodities, gold gave up earlier gains as investor worries rose that the US Federal Reserve could taper its asset-buying stance later in the year.

Brent crude extended losses for a third consecutive day, reaching a two-week low in light of an unexpected rise in US stockpiles, weak US economic data and surging global Covid-19 infections.

On Tuesday, the JSE was weighed down by Naspers, which fell due to its Tencent exposure. Tencent’s over 6% drop was due to reports fuelling “concerns over tighter regulation on online gaming”, labelling it as “spiritual opium”.

However, losses on the local bourse were offset by stellar performances from banks, financials and retailers.

Wall Street opened strong on the back of upbeat earnings reports and global corporate deals; however, the rising Delta infection rate capped gains.

Similarly, European markets neared record highs, boosted by positive corporate results, despite concerns around Covid-19 and the tech sector.

Major Asian indices reported losses on Tuesday, weighed down by the rise in Covid-19 infections as well as the decline in tech shares brought on by media reports around online gaming regulations.

Brent crude extended losses as global Covid-19 worries outweighed expectations of decreased US inventories.

Gold also dipped slightly ahead of US jobs data due later this week as it could influence the US Federal Reserve’s asset purchase timeline.

Despite a strong start to Monday, the FTSE/JSE All Share Index (ALSI) posted losses at the close of trade, weighed down by concerns of the rising Covid-19 infection rate in parts of Asia.

However, the rand was one of the best-performing emerging market currency as risk sentiment rose due to the positive reaction around the US infrastructure bill unveiled this past weekend.

The almost $1-trillion bipartisan infrastructure bill, expected to be passed in the next few days, is said to contain “$550 billion of new spending over five years”.

The S&P 500 neared a record high on Monday after the US infrastructure bill was unveiled, while solid corporate earnings reports drove investor sentiment.

European shares started August 2021 on a high note, boosted by robust earnings reports from the financial sector and a slew of deal activity.

In Asian markets, China’s Shanghai Composite Index closed in the green thanks to gains in the financial and consumer staples sectors.

The Nikkei in Japan also enjoyed gains on the back of upbeat earnings reports from shipping companies and cyclical firms.

Looking at commodities, despite a weaker US dollar and lower yields, spot gold rose marginally as investors’ appetites for risk-on trade increased.

Brent crude started the week on a low note, losing almost 4% as concerns fueled by weak US and Chinese economic data and high output from OPEC producers impacted demand.