Markets in a Nutshell
World
South Africa
Equities
World
Global equities were lower as hawkish major central banks signalled that interest rates would be higher for longer — global emerging markets fell in line while European stocks fell most on translation to the stronger US dollar
South Africa
The FTSE/JSE Capped All Share Index tracked global bourses lower — led lower by industrial giants Richemont and Naspers/Prosus, as well as by resources shares on generally lower commodity prices
Bonds
World
Developed market bond yields continued to rise (the US 10-year yield hit its highest level since 2007) with bond markets selling off — as investors anticipate higher rates with the risk of near-term recession moderating
South Africa
The All Bond Index was little changed for the quarter as the yield curve steepened — bonds with shorter maturities outperformed longer dated bonds
Currencies
World
US dollar strength persisted with the greenback now advancing in eight of the past 11 quarters — the euro and pound were sharply lower on slower growth while the yen continued its slump
South Africa
The rand was volatile but ended the quarter little changed against a generally stronger US dollar — the unit remains vulnerable, given SA’s lacklustre growth and weakening terms of trade
Commodities
World
Industrial commodity prices were again lower on expectations for slower growth out of China, while gold and silver were down on the opportunity cost of higher rates for longer — crude oil surged towards $100 a barrel as OPEC+ extended production cuts into next year
Economy
World
The US and European economies resiliently defied gravity, albeit with challenges in the Eurozone as the German economy contracted — Chinese GDP growth rebounded from a low base, but the World Bank forecasts growth to slow to 4.4% in 2024 amid a continuing property crisis
South Africa
Second-quarter GDP growth surprised to the upside but was still understandably anaemic — SA’s debt and deficit metrics will continue to deteriorate with the SA Reserve Bank forecasting annual growth of just 1.1% by 2025
Monetary and fiscal policy
World
There was hawkish rhetoric but no rate changes by the leading central banks — meanwhile the US lost another triple-A credit rating and again narrowly temporarily escaped a government shut down
South Africa
The SARB held rates unchanged despite strong advocacy amongst its ranks for a rate hike — the governor urged more fiscal restraint as the SA Revenue Service warned of lower receipts