Daily Solutions – 12 September 2017

JOHANNESBURG – The JSE closed in positive territory on Monday, tracking firmer global equity markets, which gained after North Korea refrained from provocation during its anniversary celebration at the weekend. The all share was pushed higher by market heavyweight Naspers, ending above 56,000 points, despite banking shares turning negative in late trade. Some demonstration by North Korea of its military capabilities was expected at the weekend, but the lack of action as well as the downgrade of Hurricane Irma to a less serious category, allowed investors the opportunity to unwind some of the safe-haven trades from previous sessions, said Oanda analyst Craig Erlam. Despite risk-on trade, local bonds were under pressure amid speculation about a possible Cabinet reshuffle, and the ANC’s confirmation that presidential hopeful Nkosazana Dlamini-Zuma would be sworn in as an MP this week. The rand, however, showed little reaction to Finance Minister Malusi Gigaba’s earlier warning that GDP growth was at risk of falling short of the forecast, and that a revised outlook could be announced during the medium-term budget policy statement on October 25.

US MARKETS – U.S. stocks rose sharply on Monday as the damage from Hurricane Irma didn’t appear to be as bad as feared. The Dow Jones industrial average jumped 259.58 points to close at 22,057.37, with Goldman Sachs, Apple, 3M and insurer Travelers Cos. contributing the most to the gains. The index also posted its best session since March 1, when it rose 303 points. The S&P 500 rallied 1.1 percent to close at 2,488.11, a record. The index also notched its biggest one-day gain since April 24. The Nasdaq composite popped 1.1 percent to 6,432.26, as large-cap technology stocks, including Apple, rose. Apple’s stock snapped a four-day losing streak ahead of the company’s expected unveiling of its latest iPhone. The three indexes also turned positive for the month.

EUROPEAN MARKETS – European stocks finished trade sharply higher on Monday, supported by gains in trade seen overseas, as investors worldwide continued to monitor the economic impact of Hurricane Irma. The pan-European Stoxx 600 ended up 1.04 percent, with all sectors closing in positive territory. The U.K.’s FTSE 100 rose 0.49 percent by the close, while France’s CAC 40 and Germany’s DAX, closed up 1.24 and 1.39 percent respectively. European stocks followed a positive session in Asia and preceded a strong trading session on Wall Street. Around the European close, the Dow Jones industrial average posted gains of more than 200 points. Insurance sector jumps, while health care’s Lundbeck sinks 13.8%.

ASIAN MARKETS – Asian stocks closed higher on Monday on fading risk aversion as the dollar clawed back losses. Markets also digested headlines concerning developments out of the People’s Bank of China and European Central Bank announced at the weekend. The Nikkei 225 rallied 1.41 percent, or 270.95 points, to close at 19,545.77. South Korea’s benchmark Kospi index tacked on 0.66 percent to end at 2,359.08 as geopolitical tensions eased on the Korean peninsula over the weekend. The rally took place after no North Korean missile launches materialized on Sept. 9, the anniversary of the country’s founding. There had been speculation in the lead up to the weekend that North Korea could conduct its next missile test then to celebrate the occasion. Greater China markets also gained.


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