Daily Report 10 May 2024

SA Company News:

The Johannesburg Stock Exchange All-Share Index closed 0.47% higher at the 77 539 level.

Sappi shares underperformed with an over 4% drop, after reporting lower sales for the second quarter. Sales for the March quarter were 6% lower at $1.35 billion and down by 15% at R2.62 billion for the half year. Half-year EPS came in at 20 US cents, down 51% at the half-year stage a year ago. Profit for the quarter was down 58% at $29 million. Looking ahead, the Sappi said that the third quarter is seasonally the weakest in terms of demand for its products and market sentiment is generally improving across all of our product segments, the company is well positioned to manage current market uncertainties.

 

SA Economy:

Manufacturing production fell by 6.4% year-on-year in March 2024, following a downwardly revised 4% rise in the prior month and surprising markets that expected a 0.4% increase. This is the first decline in industrial activity in six months and the steepest since April 2022, mainly due to a 25.9% drop in the manufacture of motor vehicles, parts and accessories and other transport equipment.

 

Global Economy:

The Bank of England kept its key interest rate unchanged at a 16-year high of 5.25%, in line with what investors and economists had been expecting .However, two of the nine members of its Monetary Policy Committee voted to lower the key rate to 5%.The MPC has now kept rates on hold at six meetings in a row but it hinted that a first cut could come as soon as its next meeting in June.

US jobless claims for the week of 4 May increased to 231 000 from 209 000 previously, coming in above expectations of 215 000. This is the highest reading since August 2023, and the largest weekly increase since January and is a signal that the labour market in the US is clearly cooling down after NFP also missed expectations last week.

The UK economy exited a recession, with gross domestic product (GDP) increasing by 0.6% in the first quarter. The U.K. entered a shallow recession in the second half of 2023, as persistent inflation dragged the economy.

 

Global Company:

The FTSE 100 closed 0.51% higher at 8 381.

The Hang Seng Index is trading 2.27% higher at 18 966.

Hong Kong stocks rose to their highest levels in eight months, driven by optimism regarding China’s economic rebound and recovery progress. High dividend yield stocks surged on talk that China may scrap a dividend tax on Hong Kong-listed shares available for mainland investors.

In China, the Shanghai Composite is up 0.07% to 3 156.

The Dow Jones Industrial Average closed 0.84% higher to 39 387, while the S&P 500 closed 0.51% higher at 5 214.

The Dow Jones Industrial Average extended its winning streak to seven trading sessions. The S&P 500 also moved back above the 5 200 closing level for the first time since 9 April. The real estate sector led the gains. Nvidia and AMD shares were down slightly.

 

Commodities:

Gold is trading higher by 1.59% at $2 355/oz, while Platinum is higher by 0.39% to $986.65/oz.

Brent crude was 0.61% higher at $84.19 a barrel.

 

Currencies:

The rand traded at R18.47 against the US Dollar, R23.13 against British Pound and R19.91 against the Euro.

The Euro is slightly firmer against the US Dollar to trade at $1.0775.