SA Company News:
The Johannesburg Stock Exchange All-Share Index closed virtually unchanged at 80 784 level as weakness in the resources sector (-1.1%) was offset by gains in financials (+0.7%) and telecommunication companies, such as Telkom that was higher by 3.1%.
EPE Capital Partners (EPE) indirect portfolio company, AutoZone, southern Africa’s largest privately-owned automotive parts retailer and wholesaler, has reportedly voluntarily entered business rescue due to financial distress. AutoZone carried a significant amount of debt, but sluggish growth amid a weak economy led to its debt ballooning as profitability declined. AutoZone joins a growing list of distressed companies like Ellies, Pick n Pay and Multichoice.
SA Economy:
South African retail brands are experiencing a decline in consumer loyalty as cash-strapped shoppers become more discerning and value-driven in their purchase patterns. According to a grocery shopper survey conducted by Trade Intelligence in June, consumers are now exploring multiple outlets to find quality at reasonable prices rather than simply opting for the cheapest options.
The new energy minister, Kgosientsho Ramokgopa said that he would like to accelerate the shift to renewable energy from coal, marking a departure from his predecessor, who opposed rapid decarbonization and pledged to keeping burning coal for an extended period.
Global Economy:
Retail sales in the United Kingdom fell 0.5% on a like-for-like basis in June 2024 from a year ago, reversing from a 0.4% rise in May and missing market expectations for a 0.2% gain as bad weather dampened consumption.
Investors stay hopeful for a potential US Federal Reserve rate cut in September, with the attention shifting to the Federal Reserve Chair Jerome Powell’s testimony before the Senate and the House today and tomorrow. Powell signaled last week that while the Fed had marked some progress towards bringing down inflation, policymakers still did not have enough confidence to begin cutting interest rates. Thursday’s release of June’s consumer price index data will be closely watched for more indications on whether price pressures are easing. On a monthly basis, U.S. headline inflation is expected to rise slightly by 0.1% from a flat reading the month prior, while core inflation is expected to rise 0.2%.
China will release data on both consumer prices and trade on Wednesday, with German inflation figures out on Thursday.
Global Company:
The FTSE 100 closed 0.13% lower at 8 193.
The Hang Seng Index is trading 0.13% higher at 17 544 as sentiment is subdued ahead of the highly anticipated ‘Third Plenum’ meeting next week where some stimulus measures are expected to be announced.
In China, the Shanghai Composite is up 0.45% to 2 941 as investors cautiously waits for several significant economic data releases from China.
The Dow Jones Industrial Average closed 0.08% lower to 39 344, while the S&P 500 closed 0.1% higher at 5 572.
The technology sector, particularly semiconductors, showed robust gains with Nvidia rising by 1.88% and Advanced Micro Devices (AMD) increasing by 3.95%.
Investors prepares for a busy week that will see the release JPMorgan, Wells Fargo, and Citigroup, all set to report Q2 earnings on Friday.
Commodities:
Gold is trading lower by 0.8% at $2 364/oz, while Platinum is lower by 1.23% to $1 011.90/oz.
Brent crude was 0.75% lower at $85.42 a barrel.
Currencies:
The rand traded at R18.10 against the US Dollar, R23.19 against British Pound and R19.60 against the Euro.
The Euro is slightly firmer against the US Dollar to trade at $1.0827.
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| Market Indicators | |||||||
| Commodities $ | Cross Currencies ($) | Major Indices | |||||
| Gold | 2364.14 | -0.80% | USD/ZAR | 18.10 | Top40 | 73717.47 | -0.02% |
| Platinum | 1011.90 | -1.23% | GBP/ZAR | 23.19 | Dow 30 | 39344.79 | -0.08% |
| Brent | 85.42 | -0.75% | EUR/ZAR | 19.60 | S&P 500 | 5572.85 | 0.10% |
| Copper | 4.64 | 0.65% | EUR/USD | 1.0827 | FTSE | 8193.49 | -0.13% |
| Palladium | 1021.92 | 1.30% | USD/JPY | 160.96 | DAX | 18472.05 | -0.02% |
| Iron Ore | 108.30 | 0.00% | BITCOIN | 57315.00 | Shanghai | 2941.80 | 0.45% |
| Source: FACTSET | |||||||