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Wall Street slips as tough stimulus talks loom

29 July 2020

Wall Street slips as tough stimulus talks loom

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The JSE closed slightly higher on Tuesday as most investors waited to see what stimulus measures the US Federal Reserve will announce.

US flag Icon
United States

US stocks fell on Tuesday as lawmakers geared up for gruelling talks over a COVID-19 aid plan, with the blue-chip Dow Index weighed down by 3M and McDonald’s shares after the companies reported quarterly profits that missed estimates.

EU flag Icon
Europe

European shares closed higher on Tuesday, as investors assessed a batch of mixed earnings reports while holding out for more US stimulus to limit the economic damage of COVID-19. The pan-European STOXX 600 rose 0.40%.

HK flag Icon
Hong Kong

The Chinese stock market edged up on Tuesday on expectations that the world’s second-largest economy was on track for a rebound, and that Beijing will keep its policy supportive.

Japan flag Icon
Japan

The Nikkei fell 0.26% on Tuesday as investors maintained a cautious stance ahead of corporate earnings, while Mitsubishi Motors plunged to an all-time low after the carmaker posted gloomy quarterly numbers.

Rand Icon
Rand

The rand was weaker on Tuesday, in line with its emerging-market peers with the dollar firming over prospects of another huge economic stimulus package in the US lifting market sentiment.

Precious metals Icon
Precious metals

Gold hit a record high on Tuesday before the sheer scale of its gains drew a burst of profit-taking, which, in turn, helped the dollar from two-year lows and kept equity markets steady. The precious metal had risen almost $40 higher at one point to reach $1 980/oz. A wave of selling pushed back to $1 915 in volatile trade.

Oil Icon
Oil

Oil prices fell around 1% on Tuesday, as US lawmakers prepared to wrangle over an economic stimulus package and investors worried about a rise in COVID-19 cases worldwide.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 56 488.11 0.29 5.35 13.05 3.03 1.58
Gold mining 6 594.90 - 1.01 40.36 46.44 142.83 217.60
Basic minerals 41 141.99 - 0.45 14.45 30.21 23.76 30.78
Industrial index 78 031.86 0.33 - 0.86 3.51 4.15 0.07
Financial 27 007.38 1.77 4.91 9.12 - 25.18 - 28.59
Fin + Ind 30 6 781.86 0.72 0.67 4.99 - 6.10 - 10.05
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) 26 379.28 - 0.77 5.57 10.12 - 7.01 - 0.58
S&P 500 PR (USD) 3 218.44 - 0.65 7.08 12.93 - 0.79 8.48
NASDAQ (USD) 10 402.09 - 1.27 6.64 21.12 12.77 26.16
FT-100 (GBP) 6 129.26 0.40 - 0.28 3.58 - 16.60 - 15.65
Hang Seng (HKD) 24 772.76 0.69 1.76 3.16 - 9.04 - 9.62
Nikkei 225 (JPY) 22 657.38 - 0.26 0.78 14.74 - 1.29 6.86
MSCI World (USD) 6 806.51 - 0.51 6.73 14.15 - 2.13 5.63
Frankfurt (EUR) 5 574.54 - 0.03 6.17 18.89 - 3.67 3.34
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 931.65 - 0.46 9.62 13.09 22.29 36.20
Platinum ($) 926.00 - 1.59 15.46 21.05 - 5.89 7.30
Brent Oil ($) 43.41 0.16 5.83 117.16 - 26.82 - 31.59
Rand/USD 16.48 - 0.10 4.83 9.30 - 11.61 - 16.48
Rand/GBP 21.29 - 0.61 0.58 5.99 - 10.10 - 23.79
Rand/EUR 19.33 - 0.10 0.70 2.02 - 18.76 - 22.65
ALBI (R) 708.55 - 0.35 0.60 9.48 1.09 4.89
  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. Private Sector Credit JUN
  2. M3 Money Supply JUN
  3. Inflation rate JUN
  1. GB: BoE Consumer Credit JUN
  2. US: Fed Interest Rate Decision

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 3.23 7.14 7.58 7.70 7.83 7.78
PSG Wealth Income FoF D 1.30 4.97 6.40 6.82 7.21 7.43
PSG Wealth Preserver FoF D - 0.88 1.65 3.03 4.08 4.39 5.14
PSG Wealth Moderate FoF D - 2.65 - 0.45 0.79 2.47 3.04 3.99
PSG Wealth Creator FoF D - 2.55 - 1.12 - 0.45 1.16 2.08 2.71
PSG Wealth Global Preserver FF D 10.70 17.54 14.78 - - -
PSG Wealth Global Moderate FF D 10.23 19.68 14.32 11.64 8.54 8.42
PSG Wealth Global Flexible FF D 15.34 27.12 19.40 - - -
PSG Wealth Global Creator FF D 11.98 26.84 20.36 18.63 15.43 14.62
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 0.99 3.58 2.55 3.09 4.75 3.01
PSG Wealth Global Creator FoF D 0.22 9.62 7.75 9.26 11.23 8.86
PSG Wealth Global Preserver FoF (USD) D - 2.36 0.44 2.52 2.11 3.02 3.60
PSG Wealth Global Flexible FoF (USD) D 3.22 10.24 7.32 7.92 10.04 8.57
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 1.72 - 2.98 2.67 2.27 3.23 6.24
PSG Wealth Global Flexible FoF (GBP) D 4.86 6.37 8.43 8.18 10.05 11.54
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.12 6.74 7.02 7.15 7.27 7.19
PSG Income A 5.49 9.49 8.83 8.62 8.66 8.48
PSG Diversified Income 3.02 6.07 6.17 6.82 7.20 7.41
PSG Stable A - 7.53 - 6.55 - 3.52 0.13 1.75 2.88
PSG Balanced A - 12.85 - 13.53 - 10.17 - 4.76 - 1.77 - 0.12
PSG Flexible A - 16.51 - 17.61 - 11.73 - 6.09 - 2.57 - 0.39
PSG SA Equity D - 17.52 - 24.12 - 19.48 - 12.71 - -
PSG Equity A - 16.88 - 19.42 - 15.27 - 9.04 - 4.49 - 2.90
PSG Global Flexible FF A - 3.36 0.23 - 0.52 1.70 3.19 -
PSG Global Equity FF A - 10.65 - 7.43 - 5.35 - 0.94 1.74 2.42
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 12.54 - 13.02 - 10.60 - 5.91 - 0.02 - 0.78
PSG Global Equity USD - 17.57 - 18.45 - 14.14 - 7.84 - 0.99 - 1.99
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 4.10 7.45 7.17 7.31 7.48 7.45
PSG Direct Low Equity - 6.94 - 6.21 - 3.68 - 0.17 1.52 2.61
PSG Direct Managed - 13.96 - 14.94 - 10.96 - 5.52 - 2.41 - 0.63
PSG Direct Aggressive - 14.05 - 14.88 - 10.77 - 5.62 - 2.24 -
PSG Direct Global Managed - 3.58 - 0.23 - 0.97 1.23 2.72 -
PSG Direct Global Aggressive - 8.15 - 5.02 - 3.98 - 0.39 1.84 -
  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 - 9.73 - 12.60 - 9.60 - 4.33 - 2.20 -
PSG Wealth SA Property Equity Portfolio - 38.89 - 43.62 - 27.60 - 21.20 - 15.20 -
PSG Wealth Income Growth Equity Portfolio - 18.44 - 23.06 - 15.48 - 6.86 - 4.45 -
PSG Wealth Offshore Equity Portfolio (USD) - 0.60 9.02 9.61 11.74 13.08 -
  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

  • We recommend a neutral position for both Naspers and Prosus. Click here to read the full report on our secure site or log in to myBase.
  • Despite the regulatory and political risks that come with investing in Chinese stocks, we acknowledge that, to a large extent, Prosus and Naspers provide an alternative risk and reward profile due to the exposure to structural growth trends, which are not available through alternative local counters.
  • Naspers and Prosus trade at discounts of 23% and 13% respectively.
  • Given that management is determined to reduce the discounts over time, we suspect there will eventually be large value unlock for shareholders.
  • The share price for both Naspers and Prosus moves with a fairly high correlation to the USD/ZAR exchange rate.


company logo

Highlights

  • We recommend a neutral position in the PSG Wealth House View SA Equity Portfolio. Click here to read the full report on our secure site or log in to myBase.
  • CFR SJ is trading at a forward P/E of approximately 31 times, which is above its five-year average and its 10-year average of approximately 21 times and 19 times, respectively; it is largely in line with its peers.
  • Despite the COVID-19 headwinds, Richemont is well-positioned, with a strong brand momentum. It continuously shows broad-based and strong top-line growth, attractive operating margins and robust cash generation.


company logo

Highlights

  • We recommend an overweight position in the PSG Wealth House View SA Equity Portfolio. Click here to read the full report on our secure site or log in to myBase.
  • OMU SJ has less than 10% of the unsecured lending market, which provides a significant opportunity to drive future growth.
  • Due to Old Mutual’s size, balance sheet strength, historically low discount to group equity value and the low relative price to group equity value or embedded value compared with peers, we feel that the group will be more resilient to economic challenges in 2020 and offer a better potential for upside relative to peers.


Corporate actions

Date Company Share code Expectation
29 July 2020 Peregrine Holdings Limited PGR General Offer
29 July 2020 Safari Investments RSA Limited SAR 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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