Moore or Less: The Market Rundown

As we near the end of the year, global events continue to surprise and reshape the economic landscape. This past week was no exception.

Early in the week, President-elect Donald Trump threatened 100% tariffs on BRICS nations if they dared to ditch the US dollar—proving once again that world trade can sometimes feel like a game of Monopoly with that one friend who always flips the board. Meanwhile, the G20, led by South Africa’s President Cyril Ramaphosa, braced for U.S. policy shifts. Ramaphosa expressed confidence in the group’s resilience, emphasizing climate change and global cooperation despite "America First" policies.

On the economic front, the OECD forecasts steady global growth of 3.2% in 2024, with a slight increase to 3.3% in the coming years. However, it cautions that rising protectionism could jeopardize trade recovery and disrupt supply chains.

Adding to concerns, the Institute of International Finance reported a $12 trillion surge in global debt during the first three quarters of 2024, reaching a record $323 trillion. This sharp increase is driven by falling borrowing costs and heightened investor risk appetite.

In Europe, the IMF warns the EU could lag 30% behind U.S. income levels without deeper integration or eastern expansion. Meanwhile, France’s far-right and left united in a historic no-confidence vote, forcing Prime Minister Michel Barnier to resign—the first such event since 1962.

Across the Channel, the UK’s Chancellor Rachel Reeves faced the age-old dilemma: raise taxes or risk an economic hangover. Brexit has left the UK stuck between the U.S. and the EU, trying to balance trade ties like someone juggling plates at a family dinner. With Trump re-elected, the pressure to pick sides on tariffs and regulations feels a bit like being forced to choose between two awkward wedding tables.

In South Africa, Moody's affirmed the country's Ba2 credit rating, citing reduced power outages and lower interest rates as factors supporting stability. However, weak economic growth, the need for reforms, and fiscal consolidation remain pressing challenges.

Contrary to expectations, South Africa’s economy contracted by 0.3% in the third quarter, driven by a sharp 28.8% decline in agricultural production. Economists had anticipated a 0.5% expansion, making this contraction a significant deviation from forecasts. Consumer confidence also dipped, with the index falling to -6 in Q4 from -5 in Q3, reflecting a weaker rand and higher petrol prices. Despite this, festive season retail sales are expected to match 2019 levels, supported by lower inflation and interest rate cuts.

The rand weakened by 0.3% to 18.13 against the U.S. dollar, influenced by geopolitical tensions in South Korea and investor caution ahead of U.S. economic data releases. Local factors, including increased private sector activity and stock market gains, offered some support, but global events continue to weigh heavily on the currency. Currently, the rand is trading at 18.03 to the dollar.

Overall, this week’s news could easily be the world’s Spotify Wrapped: full of surprises, overplayed themes, and a few tracks we wish would just end. Let’s hope the coming weeks shuffle us toward a better beat—and maybe a break from all the remixes of uncertainty.