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

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Weekly Wrap – Week ending 10 May 2024

GLOBAL MARKETS

United States: The S&P 500 Index closed the week near its all-time high after three consecutive weeks of gains. The S&P500 ended the week up 1.85%, bringing year-to-date return to 9.5%. The Nasdaq closed up 1.14% on the week.

Individual stocks have experienced sharp movements in response to first-quarter earnings releases with Walt Disney shares falling 9.5% despite beating earnings estimates due to concerns over slowing subscriber growth in its online streaming business. Shopify shares drop 18.6% following a prediction for slowing revenue growth.

Weekly jobless claims unexpectedly increased to their highest level since August, reaching 231 000 vs a consensus of 212 000.

The University of Michigan reports a significant drop in its preliminary consumer sentiment index for May to 67.4, marking its lowest level in six months.

The USA 10-year Treasury yield to maturity was relatively flat for the week, closing the week at 4.48%.

Asia: The Japanese Yen depreciated against the US dollar, weakening from JPY 153 to JPY 156 despite currency interventions from the authorities.

The yield on the 10-year Japanese government bond finished the week broadly unchanged at around the 0.9% level, near a six-month high.

The Nikkei closed the week flat, bringing the year-to-date price return to 14.24% while Chinese stocks continued their advance on hopes of a continued recovery, with the Hang Seng adding 2.83%.

Chinese CPI again came in muted, at 0.3% year on year, slightly above last month’s 0.1%.

Eurozone: The UK’s economy grew by a strong 0.6% in the first quarter of 2024, surpassing expectations and signalling a potential exit from the recession that began in the latter part of the previous year.

The Bank of England (BoE) maintains its key interest rate at 5.25% but suggests the possibility of policy easing as soon as June.

The pan-European STOXX Europe 600 Index ended the week 3% higher after strong earnings releases.

The UK’s FTSE 100 closed at a new all-time high, up 2.7% for the week.

Sweden’s central bank, the Riksbank, cuts its key interest rate by a quarter point to 3.75%, marking its first reduction since 2016. The bank indicates the possibility of two additional rate cuts in the second half of the year if the outlook for slowing inflation persists.

LOCAL MARKETS

The JSE All Share Index was firmer for the week, closing at 78 464 points, bringing the weekly gain to 2.73%.

The South African ZAR continued its recent strength against the US dollar, ending the week 0.37% firmer, bringing the monthly rand movement to a +3.14%.

2024 quarter one unemployment came in at 32.2%, slightly worse than the end of 2024’s 32.1%.

The South African 10-year bond was flat for week with a closing yield to maturity of 12.1%.

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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+27 21 492 0200 |  invest@merchantwest.co.za

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