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Markets in a Nutshell — December 2024

World

South Africa

Equities

World

Except for US share markets buoyed by Trump’s win, global equities retraced — investors spooked by sticky inflation and the US central bank planning to drastically slow the pace of interest rate cuts in 2025

South Africa

The JSE tracked global bourses lower, more so in US dollars on sharp rand depreciation in the last quarter — the resources sector fell nearly 10%, with financial shares also declining

Bonds

World

Global developed market bond yields rose (and bond markets fell) — as worries shifted to the burgeoning indebtedness of countries facing pressures to run ever-larger deficits

South Africa

The All Bond Index was marginally positive on continued optimism for improved fundamentals — SA bonds are looking somewhat expensive, trading at the same low premium to US bonds as in 2012

Currencies

World

The US dollar (and Bitcoin) rallied sharply after Trump’s MAGA win suggested imminent tariffs on all US imports — the greenback gained 7.5% against the euro and 9.4% against the yen

South Africa

After trading stronger since the formation of the GNU earlier in the year, the rand weakened dramatically — the unit traded 8.3% down against the US dollar, despite improving terms of trade

Commodities

World

Except for oil, global commodities, including copper, were nearly 10% lower on worries for global growth after Trump’s presidential win — gold’s 2024 rally was halted on expectations that interest rates would no longer come down as quickly as previously thought

South Africa

Except for oil, global commodities, including copper, were nearly 10% lower on worries for global growth after Trump’s presidential win — gold’s 2024 rally was halted on expectations that interest rates would no longer come down as quickly as previously thought

Economy

World

US economic growth quickened to 3.1% (annualised) in Q3 and continues to lead the developed world — the EU is expected to reach just 0.8% for 2024, with Japan slightly higher and China forecast to grow at 4.8% this year

South Africa

The SA economy grew by just 1% year-on-year to end September, with National Treasury revising down expected 2025 growth to 1.6% — slow growth means SA’s debt-to-GDP ratio is now optimistically set to peak at 75.5%

Monetary and fiscal policy

World

The European Central Bank and the US Federal Reserve each cut rates by 0.25% for the third time in 2024 — but the Fed warned that the pace of cuts would drastically slow if inflation continues to prove sticky above the 2% target level

South Africa

SARB’s Monetary Policy Committee ruled out a half-percent rate cut, voting unanimously to cut the repo rate by 0.25% — the market is expecting just two further rate cuts in 2025, in line with US Fed cuts

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