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US retail sales for June surpassed expectations

17 July 2019

US retail sales for June surpassed expectations

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Market commentary

SA flag Icon
South Africa

The local market continued to climb on Tuesday, boosted by a strong showing by banks and financials, while investors awaited the South African Reserve Bank’s rates announcement on Thursday. At the closing bell, the All Share was 0.90% higher.

US flag Icon
United States

Despite positive retail sales figures released for June, US shares opened slightly lower on Tuesday after the release of mixed quarterly bank reports. At 18h00, the S&P 500 traded 0.16% down.

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Europe

European equities rose on Tuesday on the back of weak German economic data releases, and new Brexit concerns that supported stimulus from the European Central Bank. The pan-European STOXX 600 Index closed the day 0.35% in the green.

HK flag Icon
Hong Kong

On Tuesday, the Hang Seng edged up ahead of US retail sales results and corporate earnings releases, as investors looked for guidance on how the economic superpower is fairing. At 18h00, the Hang Seng stood 0.13% in the green.

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Japan

Japanese markets fell on Tuesday as investors digested China's slow economic growth. However, automobiles outperformed on reports that China will shift to hybrid vehicles. The Nikkei closed the day 0.69% down.

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Rand

Although the rand firmed against the pound and the euro on Tuesday, it lost some ground against the dollar due to the dollar strengthening as a result of positive US retail sales figures for June. At 18h00, the rand traded R13.93 against the dollar.

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Precious metals

Positive retail sales data out of the US dragged gold prices down on Tuesday as experts started to lower their expectations of US rate cuts. At 18h00, spot gold traded at $1 404.51 an ounce.

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Oil

On Tuesday, the oil price stabilised in light of trade tensions easing between the US and Iran and as crude production resumed on the US Gulf after Hurricane Barry past. At 18h00, a barrel of Brent crude was trading at $67.08.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 052.72 0.90 - 0.10 - 1.16 9.66 8.22
Gold mining 1 986.08 - 0.03 3.84 33.25 50.88 96.61
Basic minerals 33 151.61 0.61 - 1.73 - 2.65 19.04 25.80
Industrial index 78 991.94 0.86 0.82 0.23 10.26 1.58
Financial 41 797.57 1.28 - 0.18 - 2.33 0.16 6.16
Fin + Ind 30 7 847.73 1.00 0.49 - 0.62 6.71 3.05
International markets (Base currency)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Dow Jones (USD) 27 335.63 - 0.09 4.86 3.98 14.30 11.66
S&P 500 PR (USD) 3 004.04 - 0.34 4.18 3.85 16.00 9.53
NASDAQ (USD) 8 222.80 - 0.43 5.52 3.07 17.54 6.51
FT-100 (GBP) 7 577.20 0.60 3.29 2.52 13.21 4.15
Hang Seng (HKD) 28 619.62 0.23 6.39 - 3.02 9.06 3.88
Nikkei 225 (JPY) 21 535.25 - 0.69 2.22 - 2.86 6.53 - 2.65
MSCI World (USD) 6 420.24 - 0.28 3.72 - 2.33 13.59 5.59
Frankfurt (EUR) 5 530.14 0.35 2.77 2.72 13.72 - 1.04
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 416.25 0.76 4.72 10.06 9.84 14.17
Platinum ($) 843.00 0.48 3.06 - 5.07 5.38 1.44
Brent Oil ($) 66.48 - 0.36 7.21 - 6.60 9.63 - 11.75
Rand/USD 13.98 -0.56 5.56 0.09 -1.77 -5.94
Rand/GBP 17.36 0.24 6.39 4.91 2.64 0.70
Rand/EUR 15.68 -0.14 5.71 0.81 -0.16 -1.39
ALBI (R) 686.93 0.05 2.90 3.69 7.11 11.08
  1. Some data may be delayed, the above table reflects the latest available information
  2. Performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month


Economic calendar

Local International
  1. Retail sales MAY
  1. UK: Inflation rate JUN
  2. JPN: Balance of trade JUN

Source: Reuters, Business Day, Trading Economics


PSG Product Matrix

Fund matrix

PSG Wealth Solutions
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Enhanced Interest D 3.90 8.03 8.00 8.06 7.92 7.59
PSG Wealth Income FoF D 4.52 8.06 7.94 8.07 8.17 8.11
PSG Wealth Preserver FoF D 4.42 4.63 5.51 5.39 6.12 6.68
PSG Wealth Moderate FoF D 5.60 2.39 4.35 4.43 5.14 5.85
PSG Wealth Creator FoF D 4.71 1.03 3.24 3.72 3.41 3.69
PSG Wealth Global Moderate FF D 8.15 6.99 6.78 4.18 5.43 7.31
PSG Wealth Global Creator FF D 17.21 12.03 13.57 10.99 11.65 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 7.79 2.54 3.29 5.29 2.45 1.83
PSG Wealth Global Creator FoF D 17.10 7.05 9.76 12.06 8.35 7.47
PSG Wealth Global Preserver FoF (USD) D 5.81 5.20 3.06 4.06 4.63 3.41
PSG Wealth Global Flexible FoF (USD) D 11.34 5.44 7.64 10.43 8.91 6.44
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 6.99 9.04 4.72 5.45 8.48 7.66
PSG Wealth Global Flexible FoF (GBP) D 13.88 10.97 9.01 11.48 13.09 12.34
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.58 7.30 7.35 7.45 7.30 7.10
PSG Income A 4.17 8.40 8.35 8.43 8.24 7.89
PSG Diversified Income 3.87 7.08 7.55 7.79 7.86 7.71
PSG Stable A - 0.09 1.05 4.17 5.16 5.46 6.15
PSG Balanced A - 3.62 - 5.02 0.52 3.21 3.46 5.07
PSG Flexible A - 3.43 - 4.33 0.64 3.62 4.25 5.77
PSG SA Equity D - 10.68 - 11.88 - 5.16 - 0.08 - -
PSG Equity A - 7.13 - 8.85 - 2.56 2.03 1.28 2.65
PSG Global Flexible FF A - 0.55 - 3.49 1.46 3.28 4.31 -
PSG Global Equity FF A - 0.91 - 5.14 1.45 4.22 4.23 5.68
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 0.70 - 7.36 - 1.80 4.86 1.76 1.10
PSG Global Equity USD - 1.04 - 8.65 - 1.74 5.92 1.62 0.74
PSG Direct Portfolios
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Direct Flexible Income 3.76 7.30 7.45 7.60 7.50 7.25
PSG Direct Low Equity - 0.40 0.30 3.50 4.73 4.99 5.73
PSG Direct Managed - 3.79 - 5.28 0.10 2.84 3.19 4.77
PSG Direct Aggressive - 4.05 - 5.75 - 0.40 2.77 3.15 -
PSG Direct Global Managed - 0.77 - 3.93 0.99 2.81 3.83 -
PSG Direct Global Aggressive - 0.99 - 4.95 1.00 3.41 3.79 -
  1. The PSG Wealth Solutions are exclusively available through registered PSG planners and/or advisers
  2. The above information reflects the latest available data at time of distribution, as such product performance data reflects T-2 numbers
  3. Performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month
  4. The PSG Best Ideas Portfolios were renamed to the PSG Direct Portfolios in February 2018

Equity portfolio matrix

PSG Wealth House View Portfolios
Portfolio 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth SA Equity Portfolio -1.72 -3.80 1.77 2.40 - -
PSG Wealth SA Property Equity Portfolio -1.71 -8.48 -6.73 -3.54 - -
PSG Wealth SA Dividend Income Equity Portfolio -2.38 -2.35 4.36 4.42 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.47 11.62 12.30 14.16 - -
PSG Wealth Managed Volatility Equity Portfolio -4.49 -9.98 -4.14 - - -
  1. The PSG Wealth equity portfolios are exclusively available through registered PSG planners and/or advisers
  2. PSG Wealth equity portfolio performance are shown gross of management fees, but net of brokerage and other trading costs
  3. PSG Wealth SA and Offshore Equity Portfolio Inception date: 30 August 2015
  4. PSG Wealth SA Listed Property Portfolio Inception date: 1 December 2015
  5. PSG Wealth Dividend Income Equity Portfolio Inception date: 29 April 2016
  6. PSG Wealth Managed Volatility Equity Portfolio Inception date: 28 July 2016
  7. PSG Wealth Funds are exclusively available through registered PSG planners and/or advisers


Recent Investment Ideas

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Highlights

  • Our recommendation for TBS SJ is overweight; click here to read the full report on our secure site.
  • Tiger Brands is a high-quality food producer with a strong balance sheet and sound cash generation.
  • The group has seen working capital improvements, which would feed into greater free cash flow generation; this, coupled with no debt, indicates that dividend payments should be sustained while maintaining a strong balance sheet.


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Highlights

  • Our recommendation for OMU SJ is overweight; click here to read the full report on our secure site.
  • Since the majority of the group's embedded value is in shareholders’ funds, which is more susceptible to market fluctuations, market returns and investment income will be the primary drivers of investment return.
  • We feel that downside is limited at the current valuation multiple and improved capital management with excess capital being returned to shareholders is likely to justify an improved multiple going forward.


company logo

Highlights

  • We recommend a Neutral positioning for FSR SJ; click here to read the full report on our secure site.
  • FirstRand’s new initiatives are showing uptake and have typically displayed resilience in earnings and income during recessions.
  • It is important to point out that the impairment ratio is still below the group’s through-the-cycle threshold.


Corporate actions

Date Company Share code Expectation
17 July 2019 Alexander Forbes Group Holdings Limited AFH Cash Dividend
17 July 2019 Alexander Forbes Group Holdings Limited AFH Special Cash Dividend
17 July 2019 Delta EMD Limited DTA Cash Dividend
17 July 2019 Delta EMD Limited DTA Liquidation Dividend
17 July 2019 Investec Bank Limited Redeemable Non-Participating Preference Shares IBRP1 Cash Dividend
17 July 2019 Lewis Group Limited LEW Cash Dividend
17 July 2019 Nictus Limited NCS Cash Dividend
17 July 2019 Primeserve Group Limited PMV Cash Dividend
17 July 2019 The Foschini Group Limited TFG Cash Dividend
  1. The information above is to the best of our knowledge correct at the time of distribution but due to the nature thereof cannot be guaranteed.
  2. This document only contains general information and not the opinion of the distributor.

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Author
author

Adriaan Pask PhD

Chief Investment Officer


At PSG Wealth
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