The Traders' Update, 29-30 April 2024
Realeboha Molaba
Actuarial Junior Consultant; Actuarial Science Honours Graduate from the University of Cape Town; Actuarial Science and Mathematical Statistics Graduate from the University of the Witwatersrand
Segment 1: Overseas Markets
European Markets
Equity markets closed relatively mixed as investors looked ahead to more earnings reports, central bank decisions and data, i.e.:
The pan-European Stoxx 600 closed 0.10% higher with mining stocks closing 1.5% to lead the gains.
On the individual shares front, Dutch medical devices firm Philips was the best-performing stock in the S&P 500 after it reached a US$1.1 billion settlement in a U.S.-related case associated with the recall of some of its devices.
German lender Deutsche Bank shares fell after the company stated that it had increased its provision of up to €1.3 billion (US$1.39 billion) for the second quarter following reports that the latest hearing from a Cologne court suggests that the lender should have paid a higher price for the acquisition of Postbank back in 2010.
Cash-strapped French IT firm Atos confirmed reports that the French government had offered to purchase the firm's big data and security business along with its spanning cybersecurity and advanced computing products.
On the data front, the German Federal Statistical Office reported that the country's consumer price index (CPI) rose by 2.4% year-on-year in April and on a monthly basis, it rose by 0.6%.
Asia-Pacific Markets
Hong Kong
The Hang Seng closed 0.54% higher at 17,746.91.
China
Industrial profits fell in March, however, they pointed to a slow growth in the first quarter of 2023 and they climbed by 4.3% year-on-year compared to the 10.2% year-on-year increase reported in the previous year.
Mainland markets closed higher, i.e.:
Japan
The Bank of Japan left interest rates unchanged after it concluded its two-day monetary policy meeting on Friday.
Broader markets closed higher, i.e.:
South Korea
Korean markets closed higher, i.e.:
Australia
The S&P/ASX 200 closed 0.81% higher at 7,637.40.
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U.S. Markets
Equity markets closed higher after investors digested Friday's data publications and more corporate earnings reports, i.e.:
Electric vehicle (EV) maker Tesla shares rose to the top of the S&P 500 after the Chinese government stated that it will support a rollout of the company's "self-driving" advanced assistance technology throughout the technology. Hence this would assist in boosting the EV maker's outlook in China where it has been facing challenges related to falling sales and increasing competition from local EV makers.
Lithium producer Albemarle shares jumped ahead of the release of the company's earnings report, set to be released on Wednesday. The firm's earnings are expected to benefit from a recent stabilisation in lithium prices.
Pizza chain company Domino's Pizza shares rose after the company posted larger-than-expected profit, revenue and same-store sales for the first quarter of 2024. The company's loyalty programme and agreement with Uber contributed significantly to the company's strong results.
Investment management firm Franklin Resources shares fell to the bottom of the S&P 500 after the company released its results for the fiscal second quarter. The disappointment in the stock price was due to a fall in profits due to higher expenses even though the reported revenue was higher than expected due to assets under management (AUM).
Tech giant Alphabet (GOOGL) shares fell after the parent company Google reportedly laid off an entire team of employees working on a high-level programming language Python and is in a process of establishing a new team to work on the project in Munich, Germany.
Social media giant MetaPlatform shares also fell on news of impending job cuts at its Oversight Board which is responsible for monitoring content across the company's social media platforms.
Discount retailer Dollar Tree shares fell after tornadoes that swept through Oklahoma over the past weekend caused damage to the company's warehouse situated in the area.
The Bureau of Economic Analysis reported that the Personal Consumption Expenditure (PCE) index remained rose to 2.7% in March, up from 2.5% reported in the previous month. The Federal Reserve prefers this index to assess how its monetary policy in the future will be influenced.
Segment 2: African Markets
Nigeria
The government secured a US$600 million seaport infrastructure investment from a Danish shipping company, Maersk. The purpose of the investment is to make the ports more accommodative to larger ships.
Morocco
The government aims to make the country an aviation hub and aims to grow the country's US$2 billion-a-year aerospace industry. Efforts include subsidizing manufacturers of planes, trains and automobiles.
Segment 3: South African Markets
The South African Reserve Bank (SARB) reported that in the latest Monetary Policy Review for April that the government is keeping inflation high by maintaining administered prices on services like electricity, water and education.
The SARB's latest Quarterly Bulletin showed that South African lenders reduced the amount of loans advanced to clients due on the back of rising interest rates, however, credit card advancements boomed. Household loans fell to 4.1% in January 2024, which was the lowest rate since March 2021. Mortgage advances to households slowed to 3.3%, down from 3.7% recorded in the previous year. Growth in credit card advances came in 9% in the last year.
American beverages company Coca-Cola is planning an initial public offering (IPO) of its African bottling business around some time next year. The company is considering a dual listing of Coca-Cola Beverages Africa in Johannesburg and Amsterdam. Thus it is expected to seek a valuation of approximately US$8 billion (R149.54 billion).
Segment 4: JSE Market Wrap?Update