Gavin Mccarter

  • Emerging Markets on the back foot as the Dollar strengthens
  • The rand has bucked the emerging market currency trend by strengthening 7.6% year to date. The Brazilian Real, Indian Ruppee and Turkish Lira have all weakened over 7%. The Turkish Central bank surprised the market with its 3% interest rate hike last week. We should see an increase in market and currency volatility leading into Friday's US employment data, which is expected to stay near the 1... ››› more
  • [29 May 2018]
  • Two to buy as Trump's “Truce” drives the market's up
  • As earnings season winds down, the market is taking cues from geopolitics and the weekly macro-economic data that comes out. The biggest boost the markets will receive is from America and China, agreeing to put aside international trade differences to work on a wider agreement. This is very positive and will be a tail wind for markets to rally higher. Add this to the bullish phase global marke... ››› more
  • [24 May 2018]
  • Global markets remain robust as volatility declines
  • Global markets remain robust with no clear signs of a downturn as volatility slowly declines. Investors are buying even the smallest dip, which has seen the market remain in a bullish phase this past week. On the currency front, we could see gradual rand weakness over the coming months due to the global interest rates rising.   A Federal Reserve member stated:   "Interest rates ... ››› more
  • [17 May 2018]
  • One to buy as strong earnings bolster markets
  • Global markets are being held up by strong first quarter earnings releases and US data from last week that signals US inflation is being controlled. Over 80% of the S&P 500 has released Q1 results and 78% of them have exceeded expectations. If the trend continues it will be the highest proportion of “beats” in almost 10 years. This earnings growth is keeping valuations in check, the S&... ››› more
  • [10 May 2018]
  • Rand Hedges in focus as the Rand's run seems to have ended
  • The Rand is on the back foot as US treasury yields jumped towards 3%, an important psychological level for investors. The weaker Rand helped the resources and rand hedge industrials rise yesterday as banks and retailers pulled back. After a surprisingly strong run, the Rand appears to be heading back to resistance at R12. 48 as anxiety and volatility return to more normal levels.   ... ››› more
  • [24 April 2018]
  • Building strength ahead of a breakout
  • The market has remained robust as Trump shifted most of his focus away from a potential trade war with China to Syria. This helped the market bump higher as it tries to break above its 200-day moving average. The market remains in a bullish phase, while a sustained break above the 200-day moving average around 50,800 could see the market take another rally towards its 2018 high. Long term ... ››› more
  • [23 April 2018]
  • The Great JSE Reset
  • The market sold off strongly last week Wednesday, but only in the morning. This was an opportunity for the market to reset, find a bottom and allow buyers with fresh capital to come in. The ALSI future came within a couple points of its 200-week moving average, a level which it has bounced from strongly, since 2014. It's seen a peak to pull back over 14%, that's a healthy correction and cur... ››› more
  • [11 April 2018]
  • 2018's rocky first quarter provides plenty buying opportunities
  • Global markets typically have a good run in April before the “Sell in May and Go Away” period, but the spike in volatility in February and March has shaken investors. With global markets down year to date, we should see investors buy this dip and a potential run up in April that will make up for 2018's rocky first quarter. The below graph shows the S&P 500's average monthly return for the ... ››› more
  • [05 April 2018]
  • Moody's believes in the Ramaphosa Rouse
  • Late Friday night Moody's released its rating for South Africa and reaffirmed its sovereign debt rating at investment grade. It even improved its outlook from negative to stable, but stated policy ineffectiveness could “… undermine confidence, growth and social cohesion, with inevitable consequences for the country’s balance sheet”.   The Monetary Policy Committee is expected... ››› more
  • [27 March 2018]
  • Business Confidence will accelerate growth in South Africa
  • The RMB/BER Business confidence index for 2018 Q1, rose sharply to 45, the highest level since 2015. A level above 50 is considered positive, but it's a move in the right direction. As mentioned last week, improvements in investor, business and consumer confidence is the tail wind behind improving economic growth. There are a few obstacles that could come in the way of increasing growth li... ››› more
  • [20 March 2018]
  • What's on the horizon… A bullish 2018!
  • Economic data for January showed some positive signs, but sentiment took another hit after parliament voted to change the constitution regarding land rights. Despite assurances that this should be done on unused land, without affecting food security and focus on the development of new agricultural zones, it introduces another hurdle for new investment. The market is concerned that it's another... ››› more
  • [13 March 2018]
  • A volatile week - Ignore the noise
  • After a volatile week, the market is almost flat. It's on the back of a lot of news (noise). But nothing that could derail emerging market rally. We've had an intensified call for expropriation of land without compensation, the mining charter put to the back burner with a new and improved version due in 3 months. US President Trump ignites a potential trade war. And today SA GDP coming in ... ››› more
  • [07 March 2018]
  • The market likes “The Cyril Shuffle”
  • President Ramaphosa announced a late-night cabinet reshuffle that has seen some key Ministry replacements, notably the return of Nhlanhla Nene to the finance ministry and Pravin Gordhan as Public Enterprises Minster. One of the most important legislative changes made in the past week was the increase in offshore allocation in Regulation 28. African focused investments are now limited to a max... ››› more
  • [27 February 2018]
  • Back to Reality... Balancing the 2018 Budget
  • Last week, the market saw a strong bounce following Zuma's 'sudden' resignation after re-iterating he "hasn't found someone that can tell him what he has done wrong”. Traders started to take profit on Friday, which will see the markets trend lower before the budget speech this week. This sell off could be one of the last dips before a broader rally as President Ramaphosa tries to invig... ››› more
  • [20 February 2018]
  • A healthy correction underway! Get ready to buy the dip…
  • The past two weeks have seen investors being spooked by a global selloff in stocks and bonds. This will be short lived and allows investors with fresh capital an opportunity to invest at lower levels. The global market needs a healthy correction (around 15%) after volatility was at its lowest level in years and investor confidence in the market rising day after day was at record highs. The... ››› more
  • [13 February 2018]
  • Global growth forecasts good for Commodities and Emerging Markets!
  • The International Monetary Fund has increased its global growth forecast to 3.9% for 2018 on the back of US Tax cuts that will most likely stimulate growth. Typically, global growth above 3.5% is a strong catalyst for commodity price growth and emerging markets. SA is still in a honeymoon phase after Ramaphosa's election. The Rand strength and other positive economic results have raised th... ››› more
  • [23 January 2018]
  • 2018: The year of SA Inc and small caps
  • The market and currency have responded positively to the appointment of Cyril as President of the ANC. We've seen the rand on the longest weekly winning streak since 2002, as foreign investors that were sitting on the sidelines start deploying capital in to SA stocks. As mentioned late last year, the stocks on their shopping list are SA focused companies with earnings mostly generated locally.... ››› more
  • [10 January 2018]
  • Cyril Ramaphosa's support is growing, spurring a rand rally
  • According to a poll by Kantar Public, Cyril Ramaphosa's support as next ANC president rose to 43% in November from 36% in August. He is also leading the nominations, Ramaphosa has an over 500 branch lead. A lot can still happen in the next few weeks, so, watch this space. As the saying goes, plan for the worst, hope for the best. Additional tail winds for a global rally is the traction being m... ››› more
  • [06 December 2017]
  • Complete downgrade averted as Moody's gives SA one last shot - with one to buy
  • Last week South Africa side stepped the exclusion from the World Government Bond Index, as Moody's didn't downgrade its local currency. Instead, Moody's placed South Africa on Credit Watch. This is a period of up to 90 days where it critically evaluates any material changes and can downgrade SA at any-time. S&P downgraded SA, which sparked panicked selling of the rand after the JSE closed, but... ››› more
  • [28 November 2017]
  • The Looming Credit Downgrade - Two to buy and none to sell
  • Moody's and S&P ratings agencies will be announcing if they drop SA's credit ratings one more notch after the market closes on Friday. Although Moody's signaled, it wouldn't be making any serious decisions before the 2018 budget, we had Minister Gigaba's mini-budget confirmed that South Africa's in crisis. A strong focus is one of the core Pillar's Moody's considers when making a decision.... ››› more
  • [22 November 2017]
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