Last week, was a wild ride.
We had a global sell-off in stocks and currencies due to:
• The nail-biting election between Trump & Biden
• Major dollar weakness with the lack of confidence in America
• A resurgence in COVID-19 cases to new highs in Europe and America
And while all hell was breaking loose, the South African rand was on fire.
In fact, last week it broke below ... ››› more
Market sentiment has improved since President Trump's release from hospital, and we head into third quarter (Q3) earnings season.
Analyst forecasts on the S&P500 (a gauge for global equity markets) signals a potential decline of 20.5% for Q3, this would be the second largest Q3 decline since 2009.
Analysts expect a decline in earnings in the fourth quarter of 11.8%, and a return to earning... ››› more
The rand has been extremely volatile this year, ranging between R14/USD to over R19/USD. Recently, the currency seems to have found a range between R16.40/USD and R17.20/USD. This stability may be short-lived however as the rest of the year will likely prove turbulent.
Overseas, we have the US election looming in early November. It's set to be one of the most contentious in recent memory. Thou... ››› more
The Rand followed the technical pattern in textbook fashion last week banking 3.5% ungeared. That's 35% using futures and as much as 350% on margin if you were trading CFDs.
Right now the Rand is at a crucial technical level as support on the USD/ZAR builds at R16.40.
Look at the chart below to see where the Rand could be headed next…
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The Rand has been given a welcome boost from central bankers intensifying accommodative monetary policy that will keep interest rates lower for longer. This week central bankers from America, UK, New Zealand, China, Switzerland will be releasing interest rate announcements or provide additional information relating to recent announcements and economic outlooks.
More information on the potentia... ››› more
Some big-name companies announced stock splits and today is an important day for investors.
Apple (APPL) shares split four for one on Friday close. This means it will start trading today at 25% of its closing price of $499.23 on Friday. This is the fifth time its split in 33 years. If Apple never did these share splits, 1 share would be changing hands at almost $29,000, from an IPO price of $2... ››› more
The rand is once again in hot water.
In August, we saw the currency drop from R15.00 down to R17.78 for the first time since 21 May 2020.
And this is due to one main factor.
We hit half a million cases of Coronavirus in SA, taking us to the top five infected countries in the world.
It's clear the COVID-19 pandemic still has the power to cause a see-saw in market sentiment.
And... ››› more
For the first time in nearly 16 years inflation is below the South African Reserve Bank's targeted range.
Yesterday, Consumer Price Inflation (CPI) slowed to 2.1%. That's the lowest number since September 2004.
Now, you're thinking inflation is low, that's a good thing, right?
It's a bit more complicated. Let's explore…
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Di... ››› more
This week, sit-down restaurants once again opened their doors to the public.
They opened under a cloud of restrictions. But they're open!
This must be a welcome relief to so many private restauranteurs and small business investors. Because, while they can't serve alcohol, offer a buffet and or hand you a menu (menus will have to be replaced by “no-touch” options), they can at least sta... ››› more
Many investors rush for the exit at the same time, causing a whip-saw effect in asset prices.
The Rand is particularly vulnerable to this as one of the major currencies.
Emerging market (EM) investors can use it as a proxy for less liquid EM currencies, and use it to hedge as it has the benefit of straddling trading hours in parts of Asia and America.
There are two ways for you to get ... ››› more
It's been an absolute roller coaster for the rand this year.
In January it was trading strongly at R14.50 to the US dollar.
In late April, we thought it was the end of the rand as it traded at R19.00 to the dollar.
And now, it's currently trading at R16.55.
I believe there's been two main causes for the rand's volatility namely.
Cause #1:
South Africa entering into ... ››› more
For a long while now, I've been talking about countries coming out of lockdown and how we'll see a recovery in markets.
I wasn't wrong.
The S&P 500 is back above 3 000, a gain of almost 40% from its March low.
Let me say that again, the S&P 500 has returned almost 40% in the past two months.
While I knew markets would begin to recover, even I wouldn't have predicted a recovery that... ››› more
Q. “On Tuesday I bought 100 Remgro shares and when I woke up on Wednesday to check the markets, I was holding 69 RMH (Rand Merchant Bank Holding) shares instead. Please can you explain what happened?”
A. Believe it or not, the exact same thing happened to me.
Remgro went ahead with the unbundling process in Rand Merchant Bank Holdings to its shareholders.
Unbundlin... ››› more
Everyone has favourites. A favourite food. A favourite colour. A favourite vacation spot. And, even though you'll never admit it, some people even have a favourite child.
For me, this pertains to the world of stocks too.
So, what is that one stock? The one I just have to hold no matter what anyone says?
Well, it's a company that, for the longest time, operated in the shadows of its mai... ››› more
A bear market refers to a widespread decline in asset prices of at least 20%.
We've seen stock markets fall 20% and more in recent months. The oil price fell through the floor, and unemployment is soaring.
This is not a fun time to be in, and you might be confused, panicked or just blown away.
The good news is, this is only a phase - and it will also pass. Things will turn around and l... ››› more
On 24 February 2020, I sent out an article:
Coronavirus + Eskom + Moody's + Chart = Rand disaster
At the time the South African rand was trading at R14.20.
I predicted that the USD/ZAR would move to the first target at R16.00 within a couple of weeks…
This was due to the following factors at the time…
• The Coronavirus was declared by the WHO as a global health emergency. ... ››› more
Just in: The South African Reserve Bank just lowered interest rates by another 1%, the second time in a month.
This puts the South African repo rate at a historic low!
We can write essays about what the lower interest rate means for business and consumers. But in short - lowering interest rates historically has meant one thing for gold. Its price goes up!
And as you can see in the c... ››› more
March will be known as the worst month of all-time for the South African rand.
With the ongoing lockdown, the increasing rate of COVID-19 cases, the crumbling economy, and the downgrading from Moody's - It's just been bad news after bad news for SA.
And what happened last week?
Well we saw the South African rand hit record lows passing through the R19.00 mark against the US dollar.
... ››› more
R19.34!
It's enough to make you sick.
Because that, my friend, is not the price of a loaf of bread these days.
Or even the cost of a litre of petrol.
It's how much you would have to cough up to buy a single dollar on Monday morning.
Shocked? I was too, when three days ago the ZAR touched its worst level ever!
And the awful reality is, it's not about to rally back to R14.00... ››› more
Speak to any financial advisor with half a brain and he'll tell you to go offshore.
Sure, South Africa may one day reclaim our early 2000 title of “investment darling of the emerging markets”, but it's not going to happen any time soon.
Our problems are simply too big. There's is no quick fix to Eskom, our ever-increasing sovereign debt or our 29% unemployment rate. So yes, that means ... ››› more
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