A snapshot of local & global market news, indices, & events

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Weekly Wrap – Week ending 14 February 2025

GLOBAL MARKETS

United States: The Nasdaq Composite gained 2.58% for the week, leading major indexes, while growth stocks outperformed value stocks. The S&P 500 and Nasdaq closed within 1% of all-time highs.

Stocks surged on Thursday after President Trump delayed new global tariffs, opting for a study on reciprocal tariffs by April 1, which eased investor concerns.

January inflation data exceeded expectations, with CPI rising 3.0% year-over-year. Fed officials signalled a continued restrictive policy, pushing expectations for rate cuts from September to December.

Treasury yields fluctuated following inflation reports, with the 10-year yield reaching 4.66% before retreating. Investment-grade corporate bonds out-performed Treasuries amid strong demand.

Europe: The STOXX Europe 600 rose 1.78% to a record high, driven by optimism over a potential Ukraine-Russia resolution and strong earnings. Major indexes, including Germany’s DAX (+3.33%) and France’s CAC 40 (+2.58%), also saw gains.

The UK economy grew 0.1% in Q4 2024, defying expectations of contraction, with annual GDP rising to 0.9% in 2024. Growth was driven by services and construction.

BoE Chief Economist Huw Pill urged caution on rate cuts due to strong wage growth, while MPC member Catherine Mann argued for a larger cut amid a weakening labour market.

Industrial production in the eurozone fell 1.1% in December, exceeding forecasts of a 0.5% decline, but Q4 GDP growth was revised up to 0.1%, with annual growth at 0.7%.

Asia: The Nikkei 225 rose 0.93%, and the TOPIX gained 0.80%, supported by a weaker yen and Trump’s decision to delay reciprocal tariffs.

Investors speculate that the Bank of Japan may raise rates faster than expected, pushing 10-year government bond yields to a 15-year high of 1.35%.

The corporate goods price index increased 4.2% year-over-year in January, prompting the government to release rice reserves to counter soaring food prices.

In China, the CSI 300 and Shanghai Composite rose over 1%, while Hong Kong’s Hang Seng Index surged 7.04% amid optimism over US tariffs and AI-related tech stock gains.

Consumer inflation rose 0.5% in January, but factory deflation persisted for the 28th month. Moody’s downgraded China Vanke’s credit rating further into junk status, raising default concerns.

LOCAL MARKETS

The South African stock market gained over the week on positive global sentiment, with the FTSE/JSE All Share and the FTSE/JSE SWIX indices both rising by 1.4%.

The FTSE/JSE Industrials 25 Index rose by 3.5% mainly on the back of a c.12% rise in the prices of index heavyweights Naspers and Prosus.

 

The strong gains in Naspers and Prosus also resulted in large caps (+1.7%) outperforming small caps (+0.2%).

Resources (JSE Resources 20 Index) gained 1.8% mainly on the back of an increase in the price of gold mining companies.

Financials (JSE Financial 15 Index) was the only sector to end in the red with a return of -0.9% as index heavyweights Capitec and FirstRand retreated.

The rand was flat against the US dollar over the week, closing the week at R18.39.

WEEKLY TICKER

WEEK AHEAD - UPCOMING ECONOMIC EVENTS

Disclaimer: The document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in any form whatsoever. Investors are encouraged to obtain independent professional investment advice before investing. Investors should be aware that investing in a financial product entails a level of risk which depends on the nature of the investment. The merits of any investment should be considered together with the investor’s specific risk profile and investment objectives. Past performance is not necessarily a guide to future performance. Fluctuations in exchange rates and underlying investments may cause the value of international investments or underlying investments, if included in the mandate, to go up or down. Illustrations are not guaranteed but are for illustrative purposes only. Merchant West Investments is an Authorised Financial Service Provider (FSP 44508).

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Merchant West Investments
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Merchant West Investments  FSP 44508

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