Daily Market Review

Friday, 20 May 2022

US markets closed lower in another turbulent trading session with the main indices swinging between gains and losses. Tech hardware, rails, apparel, casual diners, insurers and credit providers were some of the weak spots. Precious & industrial metals, chemicals, managed care, autos, homebuilders, software and Chinese tech were among the stronger sectors. Unemployment benefit claims rose for a third week in a row. US house prices reached a record high in April despite the number of sales falling. The yield on the 10-year US Treasury note closed lower at 2.854%.

European equity markets closed lower but off the worst levels of the day. Food, beverage and tobacco underperformed. Utilities and health care were relative outperformers. Nestle lost ground after being downgraded to market perform by Bernstein. UK Chancellor Sunak pledged tax cuts for business in his autumn budget. Hawkish rhetoric from ECB members strengthened in the wake of soaring inflation levels, to the point where Dutch central bank chief Knot suggested that a 50bps hike in July is a possibility if inflation broadens.

S&P500 -0.58% Dow -0.75% Nasdaq -0.26% FTSE100 -1.82% DAX -0.90% CAC -1.26%

Asian equities are rallying this morning after China cut its benchmark interest rate. Japan’s CPI data revealed a higher-than-expected increase in core inflation, which rose above the Bank of Japan’s 2% target. Core ex-energy inflation also turned positive.

Nikkei +1.32% Hang-Seng +2.22% Shanghai +1.37% ASX +1.14%

The JSE closed lower, following in the footsteps of global peers. The SARB’s Monetary Policy Committee increased the repo rate by 0.5%, in line with expectations. The SARB lowered SA’s GDP growth forecast for 2022 and slightly increased the CPI forecast but still expects inflation to moderate towards the end of the year. Banks and Insurers were some of the biggest losers, weighing on the financial sector which lost 4.63%. The yield on the 10-year government bond was lower at 9.88%.

Notable Gainers/Losers:
Harmony +2.66% Anggold +2.49% Clicks +2.27% Goldfields +1.28% Kumba +1.23% Vukile +1.03% Thungela +0.89% Discovery +0.57%
Ninety1 -4.43% AB Inbev -4.31% Old Mutual -3.91% Exxaro -3.83% Spar -3.81% Mondi -3.77% Standard Bank -2.96%
JSE All-Share -1.21% JSE Top 40 -1.23% Industrials -1.29% Resources -0.64% Financials -4.63%
JSE All-Share 68’246
S&P500 3’901
EURZAR 16.75
GBPZAR 19.73
AUDZAR 11.14
NZDZAR 10.12
Brent Crude $111.71
Gold 1’845
Platinum $955
Palladium $2’014

Sources: Factset, Yahoo Finance, Trading Economics, BusinessDay Live, WSJ