Maseru Securities Market

Market Status: Closed

Global Market Review

 

WEEKLY MARKET COMMENTARY: EQUITIES

24/07/2020


United States

  • US equities fluctuated between losses and gains as investors assessed jobless claims data and a slate of solid corporate earnings.

  • Data on jobless claims showed unexpected rise in jobless claims, the first rise since March.

  • Regression of labor market came as new COVID-19 cases continue to climb and threatens economic recovery, as many states have had to pause or rollback reopening plans.

  • Investors were also watching for signs that Congress will announce stimulus to replace the extra $600 weekly unemployment benefit set to expire at the end of July.

  • On politics,  President Trump’s administration’s decision to close China’s consulate in Houston over concerns about spying is seen as a significant escalation in tensions between Washington and Beijing.

  • Market stress tend to retreat toward normal levels as CBOE VIX  reaches 24.85, just less than 5 points above its long-term average.

  • NASDAQ Composite, S&P 500 and Dow Jones Industrial Average were down at 10720.672, 3271.34 and 26954.85 respectively on Thursday open.

Europe

  • European markets ended mixed on Thursday as investors reacted to rising US-China tensions and corporate earnings.

  • COVID-19 pandemic concerns are also returning to the fore as US infections approach a 4 million landmark.

  • On economics, German consumer confidence has soared on the back of a return to economic activity and landmark stimulus measures in Europe.

  • On politics, EU leaders reached a deal on $862 billion recovery fund to help the region recover from corona virus crisis.

  • UK’s FTSE 100, German DAX, French CAC 40 and Stoxx 600 were at 6232.56, 13128.83, 5039.69 and 374.19 respectively on Thursday close.

South Africa

  • Major stock indexes on the JSE were mixed on Thursday close, with allshares and resources rising while the financials retreated.

  • The SARB MPC cut the repo rate by 25bps in a widely expected move

  • SA’s main stock index headed lower for the first time in four days as investor enthusiasm that spurred recent gains moderates amid questions about the strength of an economic recovery.

  • COVID-19 coupled with recurring electricity load shedding imply that economic growth will remain highly fragile in SA which would cripple the already shaky prospect of job creation. On Wednesday, merely a week after Eskom suspended loadshedding since the national lockdown, pleaded with customers to switch of geysers, pool pumps, unnecessary lights and unused appliances as its power system was under ‘severe pressure’.

  • Both South African and Emerging markets CDS spread are falling – indicating a subsiding fear in the market.

  • All major JSE indices edged lower on Thursday. JSE All share index, Resources index and Financials index ended at about 56267.18, 31746.11 and 26763.32 respectively

 Data source: Bloomberg

 

 

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