WATCH: Animal Spirits

Friday’s US jobs report was a bit of a “Goldilocks” print with a decent (but below consensus) 431,000 payroll gain. The US unemployment rate fell to 3.6% but average hourly earnings were only up 0.4% month on month and 5.6% year on year (the latter in line with consensus). But it feels like investors are more focused on the yield curve, which has dipped into negative territory, and are bidding up more defensive sectors as the probability of a recession increases.

The SA reform narrative continues to grind in the right direction: with the spectrum auction completed in March and last Friday, Transnet announced that it would be inviting bids from the private sector to operate sections of its freight network. Moody’s revised its outlook from negative to stable, and the EU is looking at further sanctions against Russia after a number of atrocities have been reported near Kyiv. It is a fine balance between holding Russia to account for war crimes without escalating the situation further.

Business Day TV spoke to Chris Holdsworth, chief investment strategist at Investec Wealth and Investment, to find out what the animal spirits are saying.

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