Wednesday 2nd October 2013: partial shut-down of US government continues About 800,000 US government employees were told to stay at home yesterday as the US government partial shut-down continued because they could not reach agreement on the budget for the new financial year that started yesterday. It appears that 50% of the “Tea Party” faction within the Republican party come from the old south and are terrified of the country’s growing debt burden (110% of GDP) and of Obama turning the US into a socialist country. They have a point on the debt burden, even though it has flat-lined over the past few years. The US market closed up 0.8% on good manufacturing data, while European markets were up 0.7%, as investors speculated that the economic impact of the political stale-mate in the US would not hurt economies in the short-term. This morning Asian markets are up except for Japan, down 2% on the strong yen (97.86 to the dollar) and Abe’s decision to raise the sales tax from 5% to 8% next April, without as yet announcing any concrete steps to counter the negative effect on the economy of the big increase. The JSE lost 0.2% yesterday to 43,946 as mining shares got hit by weaker metal prices and our manufacturing data disappointed because of the motor industry strikes. Foreigners have invested R5.3bn net in our bonds in the last 10 days and R11.8bn in the last month. Yields rose a bit yesterday with the weak rand, with the 13-year R186 yield back at 8%. The rand is at 10.13 this morning to the dollar and 16.39 to the pound. The JSE had an excellent September, up 5% including dividends, making it 15% for the 2013 year-to-date. Even the All Bond Index was up 3% in September, with cash up 0.4%. Listed Property is up 7.3% so far in 2013, total return. The MSCI World Index rose 5% in dollars in September, while the MSCI Emerging Markets Index bounced back, returning 6.5% in dollars. The rand rose over 2% in September.
Posted on: Wed, 02 Oct 2013 07:24:13 +0000
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