Moore or Less: The Market Rundown
As the week comes to a close, several important stories have shaped the global landscape. John Williams, President of the New York Federal Reserve, signalled that U.S. inflation is cooling, with further declines expected. He anticipates a Fed rate cut by 2025, supported by projections of steady GDP growth and easing inflation.
Meanwhile, the IMF warned that retaliatory tariffs, particularly in Asia, could disrupt supply chains and hinder growth. This comes as concerns grow over proposed U.S. tariffs on Chinese goods. Reflecting these challenges, Goldman Sachs CEO David Solomon noted that weak consumer confidence and difficulties in capital repatriation are making global investors cautious about investing in China, signalling broader concerns about the country’s economic stability.
On the global stage, leaders gathered in Brazil for the G20 Summit, focusing on social inclusion, sustainable development, and governance reform. South Africa made history by becoming the first African nation to assume the G20 presidency— because if we can handle load-shedding, we can handle global politics!
On the battlefield, Ukraine has escalated the conflict by deploying British Storm Shadow missiles against military targets in Russia's Kursk region, following earlier strikes with U.S. ATACMS missiles. In response, President Putin has revised Russia's nuclear policy, lowering the threshold for using nuclear weapons in retaliation to such attacks.
Global markets have seen mixed movements. The S&P 500 and Nasdaq dipped after Nvidia's earnings revealed slower-than-expected growth—turns out even AI can’t solve every problem. European markets remained subdued, with tech stocks under pressure from concerns over high valuations. Asian equities also declined, impacted by Nvidia's forecast and geopolitical tensions. Meanwhile, Bitcoin surged near $100,000, still fuelled by optimism over potential regulatory changes in the U.S.
Closer to home, South Africans have more to celebrate than just another Springbok win. Yesterday, the SARB's MPC cut the repo rate by 25 basis points to 7.75%. This decision was driven by a significant drop in annual inflation to 2.8% in October—the lowest in over four years and below the SARB's target range of 3% to 6%. However, the SARB remains cautious, factoring in global economic uncertainties and the strength of the rand.
The rand is currently trading at R18.11 to the dollar, an improvement from last week. This appreciation can be attributed to increased investor confidence following South Africa's credit rating outlook upgrade by S&P Global Ratings, as well as ongoing economic reforms in key sectors like energy and telecommunications. Additionally, favourable global trade conditions, such as high precious metals prices, and attractive carry trade opportunities have further supported the rand's strength.
As the week comes to an end, we see a world balancing progress and uncertainty—global commitments to sustainability alongside conflict and fragile peace. South Africa’s resilience stands out, reminding us that even in a chaotic world, there’s room for optimism. The real question is, how do we ensure that optimism lasts longer than the shelf life of a New Year’s resolution?