Stanlib Morning Market Commentary Friday 8th November 2013 The US stock market declined by 1.3% as a much stronger than expected economic growth or GDP number for the 3rd quarter (2.8% v 2% expected) raised fears about an earlier tapering (cutting back of the $85bn bond-buying program). Kevin Lings doesn’t think it will do so because of the underlying composition of the growth. Twitter had a superb initial public offering, rising 72% from its offering price, but also raising some concerns that this area of the market may be too hot. In fact bond yields actually declined in the US to 2.59%, much closer to their lows of the past 5 months, although that may have been related to the apparently unexpected halving of the official European interest rate, from 0.5% to 0.25%, by the European Central Bank. This drove European bond yields down (prices up), as well as knocking the euro from $1.35 to $1.34. Our bond yields also fell off, with the 13-year R186 SA government bond yield back down to 8.08% from 8.18%, despite the weak rand. Shares in Asia are down, but all less than a percent, with the Nikkei down 0.8% and Aussie down 0.4%. We had more good news from China this morning, with exports and imports for October both up better than expected. The JSE ALSI fell 0.3% yesterday to 46,068 as Truworths fell 8% on slow sales growth of just 7% or only 2% for same-store sales. This hurt many other retailers. It is interesting to see Brent oil down at $103.22, as the market anticipates a possible lifting of Iran’s oil sanctions and as the US pumps more oil and gas from its fracking operations. Today sees the big announcement this afternoon of the US jobs report, with only 120,000 expected because of the recent partial US govt shutdown. The rand is pushing its weaker boundary at 10.27 to the dollar and 16.49 to the pound and 13.76 to the euro. Paul Hansen Director: Retail Investing Stanlib Wealth Management stanlib
Posted on: Fri, 08 Nov 2013 08:39:27 +0000
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