MARKETS IN A NUTSHELL
WORLD
EQUITIES
Global equities fell sharply on expectations of COVID-19’s effect on economic activity and company earnings — the US S&P 500 Index recorded its fastest-ever bear market correction, falling 20% in just 20 days
BONDS
Developed market bond yields fell sharply as investors scrambled for liquidity and safe-haven investments — while central banks re-ignited market liquidity operations
CURRENCIES
The US dollar was unchanged against the majors but rallied against emerging market currencies — the dollar is sought after in times of stress
COMMODITIES
Crude oil plumbed 17-year price lows as Saudi Arabia and Russia entered an oil-price war just as the COVID-19 demand shock gathered momentum — industrial commodities also succumbed and should stay subdued, although precious metals should find support as alternative stores of value
ECONOMY
Global growth expectations plummeted as COVID-19 became a global pandemic and much of the world was locked down — economic recession is a certainty, with only the depth and duration still debatable
MONETARY AND FISCAL POLICY
Governments launched unprecedented fiscal measures to help the real economy survive quarantines — central banks cut rates and took emergency measures to support banks and ease financial market stress
SOUTH AFRICA
EQUITIES
The JSE plunged on the global sell-off with ‘SA Inc.’ companies including banks and listed property hit hardest — companies already under severe economic pressure will struggle to withstand a lengthy economic shutdown
BONDS
South African bond yields surged as global investors sold off emerging market assets in a scramble for liquidity — while Moody’s finally downgraded SA debt, leaving all three major agencies’ ratings on BB+ with a negative outlook
CURRENCIES
The rand is amongst the weakest currencies this year — given highly strained public finances and pandemic-driven global liquidation of emerging market assets
COMMODITIES
Crude oil plumbed 17-year price lows as Saudi Arabia and Russia entered an oil-price war just as the COVID-19 demand shock gathered momentum — industrial commodities also succumbed and should stay subdued, although precious metals should find support as alternative stores of value
ECONOMY
SA is in a technical recession after two quarters of GDP contraction in 2019 — the economic standstill will cause a severe GDP contraction for the first half of 2020 at least
MONETARY AND FISCAL POLICY
The SARB cut the repo rate by a quarter-point in January to counter recessionary conditions — but made an emergency 1% cut in March and introduced liquidity measures to combat the COVID-19 fallout