US equities have been dominating the global market headlines in June. Led mainly by AI and big tech optimism, the Nasdaq and the S&P 500 each closed at record highs multiple times this past month. Underneath all the momentum however, lies strong economic data. The American consumer remains resilient and inflation data inched closer towards the FED’s target rate, setting up a good foundation for equity and bond markets. In emerging markets, attention was drawn to the political landscape, as the stock market in Mexico tumbled and India’s equities briefly dipped before recovering after unexpected election results.
South Africa’s election outcome bucked the Emerging Market trend, as it was seen as wildly positive for markets. SA equities boasted their strongest month of the year, and SA bonds returned their best monthly performance in 4 years. Bond yields fell more than 1.0% over the month, as investors predicted more political stability after the formation of South Africa’s Government of National Unity. Additionally, the rand strengthened against all major currencies, bringing relief to the local net-importing economy which has been
struggling with dollar strength this year.
- The JSE All Share boasted stellar performance in June (up 4.1%).
- Financials (up 14.5%) shot higher, with Industrials (up 1.9%) ending comfortable in the green and Resources (down 3.6%) lagging the local bourse.
- Small-caps (up 6.5%), mid-caps (up 6.4%), and large-caps (up 3.7%) all ended the month much stronger.
- The S&P SA REIT sector (up 9.4%) and the SA Listed Property sector (up 6.0%) each gained considerable ground.
- SA Nominal Bonds (up 5.2%) strengthened, and Inflation Linked Bonds (up 3.1%) ended well into positive territory
- Developed Market Equities came in second to their Emerging Market peers in US Dollar terms, with the MSCI World Index up 2.1% and the MSCI Emerging Market Index having gained an impressive 4.0%.
- The Rand strengthened in May, appreciating against all of the major currencies. Relative to the US Dollar (Rand appreciated 3.0%), the Euro (Rand appreciated 4.3%) and the Pound Sterling (Rand appreciated 3.7%).
- Gold (up 0.2%) had a fairly muted month, as Platinum (down 3.4%) decreased and Brent Crude (up 5.9%) rebounded strongly from May’s pullback.
Source: Factset
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