Local Market Highlights
- Equities: Developed markets surged (+4.8%), led by US equities (+7.7%) driven by optimism over Trump’s pro-growth policies. Emerging markets fell (-2.8%), impacted by trade concerns.
- SA equities declined slightly (-0.9%), pressured by weak mining stocks (-7%) and Naspers/Prosus (-2%). Precious metals miners slumped, with gold (-10%) and PGM miners (-12%) following lower commodity prices.
- Domestic-focused companies outperformed (+0.8%), with WeBuyCars (+26%), Pepkor (+17%), and Mr Price (+13%) posting strong gains. Retail stocks rose (+7.1%), while Chemicals (-7.2%) and Resources (-6.7%) lagged.
- Bonds: SA bonds gained (+3%) as yields fell on lower inflation, an improved fiscal outlook, and expectations of repo rate cuts. The 10-year bond yield dropped to 10.2%.
- Property: The sector rose (+1.7%), with MAS (+12.7%), Hyprop (+7.1%), and Fairvest (+6%) leading on positive news. Sirius (-1.9%) underperformed on execution risks.
- Economy: The SARB cut the repo rate by 0.25% to 7.75%, with inflation at a multi-year low (2.8%). Modest growth improvements are expected through 2027. The rand weakened (-2.5%) but remained relatively strong globally.
Offshore Market Highlights
- Equities:
- US stocks surged (+6%), led by small caps (+11%) on optimism over tax cuts and deregulation. Consumer discretionary and financials outperformed.
- Eurozone markets were flat amid weak PMIs and political uncertainty. UK stocks rebounded on takeover activity and post-budget sentiment.
- Emerging markets (-2.8%) underperformed, with China and Brazil hit by dollar strength and trade concerns.
- Bonds: Global bonds were mixed. US Treasuries and UK Gilts rallied, while Japanese bonds fell on yen strength.
- Commodities & Crypto: Gold and silver declined, while Bitcoin (+37%) and Ethereum (+47%) hit new highs, boosted by optimism around US crypto policy.
- Outlook: While US markets benefit from policy optimism, high valuations and geopolitical risks warrant caution. Opportunities exist in undervalued regions like Europe and select emerging markets. Diversified portfolios and quality assets are key to managing volatility and capturing growth.
Read more below in the Market Watch for November.
Missed last month and need to catch up? Read the October market watch here.
