Markets In A Nutshell
World
South Africa
Equities
World
Rising inflation and recession fears caused global equities to retreat further — tipping US and European bourses into bear market territory with declines exceeding 20% this year
South Africa
The JSE tracked other markets sharply lower, despite a late surge by media giants Naspers/Prosus — compounded by the bourse’s higher weighting to economically sensitive resources companies
Bonds
World
Developed market government bonds provided little refuge for investors — rising yields caused bond prices to fall, despite a brief quarter-end rally as yields fell on recession fears
South Africa
The All Bond Index was lower as yields followed global yields higher — the SA listed property sector also retraced sharply on higher yields
Currencies
World
The US dollar was materially stronger against the other majors — on widening interest rate differentials and the dollar’s safe-haven appeal
South Africa
The rand weakened in tandem with other emerging market currencies — increased risk aversion saw a flight to US dollar safety
Commodities
World
Commodities were mixed as sharp price falls in industrial metals on rising recession fears were offset by rising energy prices on supply constraints — but precious metals were lower on the increased opportunity costs afforded by rising fixed interest yields
Economy
World
The global economic outlook is clouded by dual concerns of elevated inflation and slowing growth — the Russia-Ukraine war has potentially dire economic consequences for Europe amid potential gas shortages and planned rationing
South Africa
After a relatively strong first quarter, the likelihood of a contraction in the second quarter of 2022 increased markedly — on flood damage in Kwazulu-Natal, escalating loadshedding and weakening global demand
Monetary and fiscal policy
World
The US Fed implemented a series of aggressive rate hikes to tame 40-year high inflation — raising the federal funds rate by 0.75% in June for the first time since 1994
South Africa
The increasingly hawkish SA Reserve Bank raised interest rates another 0.5% in May to 4.75% as was widely expected — the largest interest rate increase since 2016