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Global stocks plummet after Trump vows to hike tariffs on Chinese goods

07 May 2019

Global stocks plummet after Trump vows to hike tariffs on Chinese goods

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Market commentary

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South Africa

The JSE suffered losses on Monday as risk-aversion underpinned most of the day following US President Donald Trump’s vow to hike tariffs on Chinese goods by the end of this week if the two states fail to reach a trade agreement. Shortly after the closing bell, the All Share plunged 1.05%.

US flag Icon
United States

Trump’s unexpected threat to increase tariffs on Chinese goods shook US markets on Monday, fuelling concerns of a global slowdown. Shortly after the JSE closed, the Dow lost 0.51%.

EU flag Icon
Europe

Investors discarded riskier assets as European share prices dropped significantly on Monday after Trump intensified trade tensions between the world’s largest economies by threatening to impose higher tariffs on Chinese goods. Shortly after the JSE closed, the pan-European Stoxx 600 lost 0.88%.

HK flag Icon
Hong Kong

Shares in Hong Kong fell sharply, and market participants opted to sell the yuan on Monday as the US-China trade war escalated. The Hang Seng ended the day 2.90% in the red.

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Japan

Markets were closed due to a public holiday.

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Rand

The rand struggled for direction on Monday as investors kept a close eye on the US-China trade war and tomorrow’s general elections. At 20h00 on Monday, the rand traded at R14.46 against the dollar.

Precious metals Icon
Precious metals

Gold prices surged on Monday as investors were forced to sell riskier assets, boosting the appeal of safe-haven assets such as bullion after Trump vowed to increase tariffs on Chinese goods. At 20h00 on Monday, spot gold was up trading at $1 281.56 an ounce.

Oil Icon
Oil

Oil markets relished the opportunity presented by an escalating trade war between two of the world’s biggest economies on Monday after Trump promised to hike tariffs on Chinese products by the end of the week. Shortly after the JSE closed, a barrel of Brent crude was trading at $71.91.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 712.83 - 1.05 1.98 8.97 9.64 5.24
Gold mining 1 408.32 0.26 - 8.47 - 2.69 24.23 26.91
Basic minerals 32 422.24 - 0.87 - 5.20 8.93 13.81 25.75
Industrial index 79 989.42 - 1.54 4.56 12.16 10.45 - 1.27
Financial 43 685.26 - 0.25 4.91 3.34 4.36 1.42
Fin + Ind 30 8 030.22 - 1.11 4.68 9.02 8.32 - 0.40
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) 26 438.48 - 0.24 0.12 4.73 4.36 11.51
S&P 500 PR (USD) 2 932.47 - 0.44 1.48 7.88 7.53 12.32
NASDAQ (USD) 8 164.00 1.59 3.44 12.70 11.60 16.45
FT-100 (GBP) 7 380.64 0.40 - 0.04 6.84 6.41 2.73
Hang Seng (HKD) 29 209.82 - 2.90 - 2.41 4.77 12.44 1.01
Nikkei 225 (JPY) 22 258.73 - 0.22 4.97 8.10 2.66 1.15
Paris CAC (EUR) 5 483.52 - 1.18 0.71 8.74 9.08 1.72
Frankfurt (EUR) 5 574.08 - 1.01 2.31 8.50 6.99 - 4.16
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 270.05 - 0.11 - 1.69 - 3.84 2.80 - 3.29
Platinum ($) 853.00 - 1.04 - 0.81 3.77 - 1.39 - 5.33
Brent Oil ($) 70.85 0.14 2.22 12.91 - 2.72 - 3.76
Rand/USD 14.42 0.41 -2.12 -7.61 -3.52 -15.20
Rand/GBP 18.93 0.40 -2.32 -9.00 -3.50 -11.58
Rand/EUR 16.17 0.25 -1.97 -5.82 -1.59 -7.97
ALBI (R) 661.91 - 0.12 - 0.28 1.77 7.15 6.18
  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 APR
  1. JP: Nikkei Manufacturing PMI Final APR
  2. US: IBD/TIPP Economic Optimism MAY

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 3.96 7.97 8.01 8.10 7.88 7.53
PSG Wealth Income FoF D 4.18 7.56 7.91 8.33 8.13 8.16
PSG Wealth Preserver FoF D 4.53 6.21 6.30 6.30 6.47 7.48
PSG Wealth Moderate FoF D 5.11 5.16 5.78 5.80 5.56 7.15
PSG Wealth Creator FoF D 6.01 3.62 5.19 5.93 3.65 5.59
PSG Wealth Global Moderate FF D 6.51 16.04 8.09 4.66 6.80 8.68
PSG Wealth Global Creator FF D 11.02 24.60 15.18 11.72 13.20 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 5.07 1.67 3.82 4.88 1.73 1.97
PSG Wealth Global Creator FoF D 8.80 9.30 10.46 11.78 7.89 7.55
PSG Wealth Global Preserver FoF (USD) D 4.46 4.17 3.20 4.67 3.40 3.44
PSG Wealth Global Flexible FoF (USD) D 8.68 9.79 9.26 10.79 7.64 6.94
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 3.02 6.02 2.49 7.17 6.19 6.73
PSG Wealth Global Flexible FoF (GBP) D 7.10 12.78 7.37 13.42 10.49 11.50
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.56 7.27 7.38 7.45 7.26 7.05
PSG Income A 4.29 8.11 8.30 8.49 8.15 7.85
PSG Diversified Income 3.68 6.64 7.52 7.93 7.82 7.70
PSG Stable A 1.10 2.48 5.41 6.31 6.22 6.94
PSG Balanced A - 2.36 - 1.19 3.26 5.28 4.61 6.60
PSG Flexible A - 1.83 - 0.31 3.81 5.86 5.62 7.49
PSG SA Equity D - 4.62 - 10.18 - 0.62 3.59 - -
PSG Equity A - 4.07 - 4.23 1.56 5.65 2.76 5.12
PSG Global Flexible FF A - 2.34 8.33 4.50 5.31 6.72 -
PSG Global Equity FF A - 3.22 7.32 4.87 6.75 6.61 7.89
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 2.30 - 4.56 1.42 6.61 2.25 2.14
PSG Global Equity USD - 3.01 - 5.02 1.94 8.16 2.15 1.95
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 3.75 6.98 7.42 7.68 7.44 7.22
PSG Direct Low Equity 0.56 1.95 4.85 5.90 5.68 6.53
PSG Direct Managed - 2.45 - 1.42 2.93 4.95 4.39 6.34
PSG Direct Aggressive - 2.73 0.03 3.00 5.41 4.77 -
PSG Direct Global Managed - 2.56 7.84 4.02 4.83 6.23 -
PSG Direct Global Aggressive - 3.10 7.22 4.26 5.74 6.18 -
  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 2.48 -1.53 3.88 5.31 - -
PSG Wealth SA Property Equity Portfolio -5.73 -9.53 -4.45 -4.00 - -
PSG Wealth SA Dividend Income Equity Portfolio 2.28 -3.35 7.32 6.63 - -
PSG Wealth Offshore Equity Portfolio (USD) 7.92 11.25 13.89 14.76 - -
PSG Wealth Managed Volatility Equity Portfolio -2.86 -9.35 -2.25 - - -
  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 an underweight positioning for HEIA NA; click here to read the full report
  • New product innovations such as low and non-alcoholic extensions to the Heineken brand is a growth prospect, although the threat of it cannibalising other brands within the portfolio is present.
  • We believe the share is fully valued at current levels, trading at a forward P/E of 20.83 times, one standard deviation away from its average forward P/E of 19.47 times.


company logo

Highlights

  • We recommend an overweight positioning for DGE LN; click here to read the full report
  • The group has a strong portfolio of brands, a global footprint and structural growth tailwinds as it focuses on the premiumisation of its brands.
  • As such, the medium-term outlook for organic revenue growth remains positive.


company logo

Highlights

  • We recommend an overweight positioning for TRU SJ; click here to read the full report
  • Return on equity has been under pressure given top-line growth that has been muted given the challenging macro environment.
  • Stronger top-line growth remains the group’s greatest challenge and is largely influenced by economic activity and merchandise inflation.


Corporate actions

Date Company Share code Expectation
07 May 2019 Afrocentric Investment Corporation Limited ACT Cash Dividend
07 May 2019 Anheuser-Busch InBev SA/NV ANH Mandatory Offer
07 May 2019 Exxaro Resources Limited EXX Cash Dividend
07 May 2019 Global Asset Management Limited GAM Mandatory Offer
07 May 2019 PSG Konsult Limited KST Cash Dividend
07 May 2019 Netcare Ltd Non-Redeemable, Non-Participating, Non-Convertibale Preference Shares NTCP Cash Dividend
07 May 2019 Newbelco Restricted Shares UNBL Cash Dividend
07 May 2019 Workforce Holdings Limited WKF Cash Dividend
07 May 2019 Zeder Investments Limited ZED Cash Dividend
07 May 2019 Ecsponent Limited Class A Preference Share ECSP1 Cash Dividend
07 May 2019 Ecsponent Limited Class A Preference Share ECSP10 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP12 Cash Dividend
07 May 2019 Ecsponent Limited Class A Preference Share ECSP13 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP15 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP18 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP21 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP24 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP3 Cash Dividend
07 May 2019 Ecsponent Limited Class A Preference Share ECSP4 Cash Dividend
07 May 2019 Ecsponent Limited Class C Preference Share ECSP6 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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