Back to top
SEARCH PSG

To search, just start typing...

SEARCH RESULTS

LOGIN

Please select which division you would like to log in to.


Wall Street higher on earnings optimism ahead of Trump speech

06 February 2019

Wall Street higher on earnings optimism ahead of Trump speech

banner

Market commentary

SA flag Icon
South Africa

The JSE closed higher on Tuesday, although trade remained cautious ahead of President Cyril Ramaphosa’s State of the Nation address later this week. The All Share closed up by 1.53%.

US flag Icon
United States

Technology and consumer discretionary stocks lifted Wall Street on Tuesday fueled by earnings optimism, ahead of the highly awaited State of the Union address by President Donald Trump. The Nasdaq closed with 1.15%.

EU flag Icon
Europe

European shares closed up on Tuesday as a recovery in banks, gains in oil stocks and a solid update from BP helped offset disappointing updates from amongst others, the Apple supplier AMS. The pan-European STOXX 600 index rose 1.30%.

HK flag Icon
Hong Kong

Mainland Chinese markets are shut for the week for the Lunar New Year holiday.

Japan flag Icon
Japan

The Nikkei edged lower on Tuesday, snapping a three-day rally as the market digested a slew of corporate earnings. The Nikkei ended 0.19% lower.

Rand Icon
Rand

The rand was slightly firmer on Tuesday ahead of Trump’s State of the Union address. One dollar cost R13.40 at 20h45.

Precious metals Icon
Precious metals

Gold prices were lower on Tuesday, as a stronger dollar and renewed interest in riskier assets dampened demand. At 20h45 an ounce of gold traded at $1 314.

Oil Icon
Oil

Oil prices edged up on Tuesday, buoyed by expectations of tightening global supply due to US sanctions on Venezuela and production cuts led by oil cartel Opec. At 20h45 a barrel of Brent crude traded at $62.51 a barrel.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 54 209.41 1.53 3.95 - 0.91 - 3.48 - 2.03
Gold mining 1 443.03 0.87 2.54 24.18 34.16 21.15
Basic minerals 30 186.68 1.30 6.83 2.95 7.58 20.43
Industrial index 71 023.44 2.11 2.38 - 3.36 - 10.90 - 12.59
Financial 43 043.53 0.73 4.15 0.06 1.59 1.36
Fin + Ind 30 7 390.45 1.62 3.00 - 2.17 - 6.82 - 8.07
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) 25 411.52 0.68 8.52 0.41 0.95 6.78
S&P 500 PR (USD) 2 737.31 0.68 7.75 0.62 - 3.09 0.62
NASDAQ (USD) 7 401.10 1.15 9.06 0.16 - 5.43 2.58
FT-100 (GBP) 7 177.37 2.04 5.02 1.68 - 4.56 2.05
Hang Seng (HKD) 27 990.21 0.21 9.25 5.84 2.20 - 11.09
Nikkei 225 (JPY) 20 844.45 - 0.19 6.56 - 4.61 - 6.53 - 6.23
Paris CAC (EUR) 5 083.34 1.66 7.34 - 0.09 - 6.85 - 1.59
Frankfurt (EUR) 5 217.85 1.71 5.57 - 1.10 - 9.89 - 10.40
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 314.00 - 0.51 1.83 6.69 8.80 - 1.73
Platinum ($) 820.00 0.12 2.37 - 5.64 - 0.49 - 17.51
Brent Oil ($) 62.51 - 0.38 9.55 - 14.17 - 14.62 - 8.85
Rand/USD 13.40 -0.03 3.88 3.80 1.99 -10.40
Rand/GBP 17.37 0.59 2.31 5.04 1.06 -2.52
Rand/EUR 15.28 0.25 4.04 4.00 3.09 -1.79
ALBI (R) 651.77 0.35 1.95 5.71 4.93 8.57
  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. ZA: SACCI business confidence JAN
  1. US: Trump's State of the Union address (04h00 local time)
  2. US: Imports and exports

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 3.94 7.97 8.03 8.05 7.76 7.43
PSG Wealth Income FoF D 3.68 7.75 7.96 8.28 7.99 8.26
PSG Wealth Preserver FoF D 0.25 3.02 5.38 5.73 6.11 7.22
PSG Wealth Moderate FoF D - 2.75 - 1.46 3.91 5.19 4.95 6.64
PSG Wealth Creator FoF D - 4.15 - 5.83 2.04 5.77 2.99 5.39
PSG Wealth Global Moderate FF D - 2.20 4.63 3.81 0.90 6.07 6.20
PSG Wealth Global Creator FF D - 3.43 6.28 10.03 5.60 11.51 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 2.97 - 5.73 3.65 6.28 1.83 2.46
PSG Wealth Global Creator FoF D - 4.12 - 4.46 9.89 11.49 6.89 7.42
PSG Wealth Global Preserver FoF (USD) D 0.36 - 0.39 3.29 6.03 3.39 3.67
PSG Wealth Global Flexible FoF (USD) D - 1.66 - 2.49 9.58 11.69 7.47 6.92
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 0.20 5.09 2.26 8.61 5.86 6.87
PSG Wealth Global Flexible FoF (GBP) D - 1.90 4.16 6.99 14.34 9.71 11.06
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.98 6.64 7.09 7.22 7.04 6.83
PSG Income A 4.07 8.16 8.47 8.44 7.99 7.75
PSG Diversified Income 2.92 6.55 7.75 7.92 7.87 7.68
PSG Stable A 0.34 2.14 5.59 7.26 6.71 7.06
PSG Balanced A - 2.87 - 2.64 3.31 7.48 5.80 7.32
PSG Flexible A - 2.29 - 2.68 2.79 8.69 6.74 8.23
PSG SA Equity D - 4.17 - 11.55 - 1.68 9.54 - -
PSG Equity A - 4.09 - 7.60 0.27 10.10 4.28 6.62
PSG Global Flexible FF A - 3.35 2.54 2.86 5.73 7.47 -
PSG Global Equity FF A - 4.34 1.20 3.90 7.70 7.47 7.61
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 3.46 - 6.46 3.23 11.65 3.86 4.09
PSG Global Equity USD - 4.27 - 7.07 4.28 13.48 4.04 4.30
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 3.29 6.91 7.56 7.62 7.35 7.13
PSG Direct Low Equity - 0.13 1.40 5.01 6.96 6.26 6.76
PSG Direct Managed - 2.95 - 3.09 2.72 7.29 5.56 7.06
PSG Direct Aggressive - 3.17 - 3.32 1.76 8.17 5.92 -
PSG Direct Global Managed - 3.57 2.08 2.39 5.25 6.98 -
PSG Direct Global Aggressive - 4.18 1.24 3.06 6.49 6.99 -
  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 Equity 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 -6.19 -8.03 1.03 5.91 - -
PSG Wealth SA Property Equity Portfolio -0.86 -4.46 -1.57 -1.00 - -
PSG Wealth SA Dividend Income Equity Portfolio -5.16 -8.66 4.95 - - -
PSG Wealth Offshore Equity Portfolio (USD) -0.08 0.14 14.79 14.35 - -
PSG Wealth Managed Volatility Equity Portfolio -8.93 -13.61 -2.95 - - -
  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 trade ideas

company logo

Highlights

  • Revenue for the nine months ended September 2018 was up by 28% to $119 billion compared to the previous period.
  • Growth was due to a 6% increase in oil production to 8 634 million barrels oil equivalent per day (MBOED) and an increase in the average West Texas oil price of 31% from an average of $51 per barrel for nine months in 2017 to $67 per barrel in 2018.
  • This translated into an increase in EPS of 80% to $5.79 per share.
  • Dividend per share increased by 4% for the first nine months of 2018 to $3.36 per share.
  • Chevron repurchased shares to the value of $750 million in 2018.


company logo

Highlights

  • BAT offers a product that has traditionally demonstrated resilience in times of economic uncertainties as it has a strong economic moat and enjoys high brand loyalty.
  • Increased competition from illicit trade, unexpected and significant excise duties, ever-changing litigation, disputed taxes, interest, penalties, and adverse foreign exchange rate movements remain risks.
  • Our research found that BAT remains an excellent company with a well-balanced portfolio of brands that covers all major price points, together with a geographic diversity that mitigates the country-specific risks for shareholders.
  • BAT has recently broadened its brand focus, by investing in Reynalds American Inc (RAI), and gained a material portfolio of reduced risk products.
  • The acquisition resulted in a significant increase in financial gearing.
  • The group’s operations, which includes stable volumes, good margins and consistent healthy cash generation, contribute to our view that gearing is manageable.
  • We believe excessive concerns over FDA regulations is an opportunity to add to BAT’s position as the market re-appraises it’s solid free cash flow profile and new generation product (NGP) upsides.
  • Trading at a forward P/E of 7.95 times (3.3 standard deviations below its five-year average), we feel that the share offers value on a relative and absolute basis.
  • A solid forward dividend yield of 7.9% also supported the share price.


company logo

Highlights

  • Toyota stands out in a sector that currently seems strained.
  • The group is trading in line with its long-term average to the sector, which we feel is justified due to its strong balance sheet, leading technologies and strong cash generation.
  • Given the quality of the operation and low valuation multiples, we believe the downside risk is limited.
  • While consumer confidence and interest rates remain the primary drivers of the group’s prospects, evolving regulation intended to reduce pollution is a tailwind to the growing contribution of hybrids in the portfolio.
  • Toyota and Lexus account for 36% (over a third) of all alternative fuel vehicles in the industry, and its hybrid powertrains will continue to be important to its strategy.
  • As environmental restrictions are being steadily tightened, Toyota is expected to benefit from a global resurgence of interest in global hybrid and electric vehicles (HEVs).
  • European regulations limiting CO2 to 95g/km are to be introduced in 2021.
  • The group plans to reveal 31 new redesigned or refreshed models in the Toyota and Lexus lineups through 2021.
  • This product and dealer-driven strategy and EM sales momentum should sustain volumes despite the uncertainty brought on by trade disputes and tariff negotiation.
  • The full impact of trade tariffs on the groups is still uncertain, but it is likely to translate into higher costs.


Corporate actions

Date Company Share code Expectation
13 February 2019 Ecsponent Ltd Fixed Rate NotesX2 ECSFX2 Interest Payment
13 February 2019 Ecsponent Ltd Fixed Rate NotesX3 ECSFX3 Interest Payment
13 February 2019 Hosken Passenger Logistics & Rail Limited HPR Cash Dividend
13 February 2019 Howden Africa Holdings Limited HWN General Offer
13 February 2019 Kaap Agri Limited KAL Cash Dividend
13 February 2019 Tharisa Plc THA 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.

Recommended Articles

A dip in US healthcare stocks weighed on global markets

Strong Chinese and European data lift global markets

Global markets jump on optimism over US-Sino trade negotiations

Author
author

Adriaan Pask PhD

Chief Investment Officer


At PSG Wealth
Copyright © PSG Konsult Ltd (1998-2019), All Rights Reserved. FAIS affiliates of the PSG Konsult Group are authorised financial services providers.