Good news…All main exchanges are on the up!
JSE up 3,3%
Last week the JSE recovered from an oversold position to close the week with a gain of 3,3%. Financials gained 4,8% and Industrials were up 3,7%. Resources managed a gain of 1,5%.
DAX up 6,6%, CAC up 5.2%.
European markets breathed a sigh of relief as the Italian referendum failed, the Dax gained 6,6% and the CAC 5,2%. Italy was up 7,3% and Spain put in 6,5%
US Markets continue to rally post elections, up 3,3%
The S&P 500 set another high on a post-election rally that has continued for 5 weeks. Stimulus under Trump is expected to add 0,4% to economic growth in 2017 and could be more significant in 2018.
The SA Currency and Commodities were subdued.
3 Stocks to Buy
The sharp sell-off in retailers has presented an opportunity to buy Pick ‘n Pay
(New) CEO, Richard Brasher has been in place for almost two years. He has made steady progress, addressing weaknesses in their offering and improving margins. The share price began to discount this some time ago and has been expensive on a historical PE basis. After reaching R84,00 in August you can now buy below R64.00.
Sanlam prominsing better value right now
The technical picture for Sanlam has improved, the stock is trading in a narrow ascending range which looks likely to break to the upside.
Fundamentally the share now offers better value buy on weakness, below R62,00
With a US rate hike looming, we like Impala Plats right now here’s why…
Last week we highlighted Impala Platinum as attractive in the low $40’s. Platinum continues to establish a base at around $910 per ounce. There has been a 25% selloff since September. Janet Yellan will make per pronouncement on US rates the week (14 December), traditionally this is negative for commodities. At current levels, we would be buying, as much of the negativity in already priced in.
2 Stocks To Sell
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Financials have rallied strongly - it’s time to sell Barclays
Financials have had a strong month, benefiting from better sentiment post the Trump win. Barclays has been one of the biggest gainers, it is overbought and we would be taking some profit at current levels. Sell above R170.
Rand vs US Dollar
US rate hikes to take shine off carry trade - this is a good time to be reviewing your offshore allocation
As we write this the Rand remains strong at around R13,60 to the dollar. A US rate hike this week appears to be a certainty, with more to following in 2017. This may signal a change in the carry trade. We have highlighted before that this is a good time to review your offshore allocations and we believe the bias is for a weaker Rand ahead.
Guy Algeo is Director of Prodigy Asset Management.