MARKET WRAP: JSE snaps four-week losing streak with gold miners faring best

The JSE fell on Friday, hit by jitters over an escalation in the US-China trade war, although the local bourse did manage to eke out a 0.2% gain for the week.

Trade was volatile, with a series of events related to US monetary policy and the US-China trade war buffeting equity markets, as well as the rand.

China has threatened to levy tariffs on US goods at the beginning of September, putting pressure on risk assets on Friday afternoon, although the rand managed to recover a little in the early evening.

US Federal Reserve chair Jerome Powell delivered his remarks at Jackson Hole in Wyoming, with global equity markets and the rand both benefiting slightly. Powell repeatedly emphasised the current strength of the US economy, saying the Fed would “act as appropriate” in the face of economic damage from the US-China trade war.

Markets have priced in a 100% chance of at least one 25-basis-point (bps) Fed interest rate cut at its September meeting, with market bets on a 50bps cut rising to 11.1% after Powell’s remarks, from 6.6% before he spoke. US markets turned positive, the JSE pared losses, and the rand had firmed 1.05% to R15.0869/$ shortly before the JSE closed — its best level in a week.

US markets and the rand, however, gave up these gains fairly quickly after US President Donald Trump tweeted that he would be responding to the Chinese tariff threat later.

The JSE all share lost 0.35% to 53,995.8 points on Friday and the top 40 0.39%. Platinums fell 1.21% and food and drug retailers 1.94%. Gold miners added 2.31%. The all share gained 0.23% for the week and gold miners 8.31%.

Shortly after the JSE closed, the Dow had slumped 1.35% to 25,898 points; in Europe, the FTSE 100 was down 0.23%, the CAC 40 0.8%, and the DAX 30 0.84%.

Gold jumped 1.88% to $1,526.14/oz after Trump’s tweet. Platinum rose 0.64% to $864.10. Brent crude fell 1.9% to $58.82 a barrel.

Naspers lost 0.32% to R3,419. Earlier, it confirmed that its shareholders had approved a spin-off of its international technology assets, which will be listed in Amsterdam on September 11. It gained 1.45% in the week.

AngloGold Ashanti added 2.05% to R336.46.

Northam Platinum fell 0.94% to R59.14, despite earlier reporting a record operating profit of R2.4bn for the year to end-June.

Old Mutual lost another 0.93% to R18.11. On Thursday it announced it had once again served a dismissal notice on former CEO Peter Moyo.

Momentum Metropolitan Holdings gave back 0.57% to R15.70. This despite it saying earlier that it expected a 65% to 85% jump in headline earnings per share for the year to end-June.

Blue Label Telecoms fell 0.73% to R2.72. Earlier, S&P Global Ratings downgraded Cell C’s debt to its lowest possible junk rating after the latter failed to make good on interest payments. Blue Label holds 45% of the mobile operator.

There is little on the economic calendar in the week ahead apart from producer inflation numbers for July on Tuesday. Consumer inflation, as measured by the annual change in the consumer price index, surprised in July, moderating to 4% year-on-year, some way below the midpoint of the Reserve Bank’s 3% to 6% target.

gernetzkyk@businesslive.co.za