Global equity markets appear to be pausing the strong momentum that has been evident since Liberation Day. Despite robust earnings results in the US, concerns about high market valuations have led to some rotation into previously overlooked defensive sectors. Following the conclusion of a prolonged government shutdown in the US, President Trump’s approval rating dropped 5% to 36% in a poll conducted this month. This marks the lowest approval rating of his second term.
Local markets continued to show strong performance in November, largely due to the favourable Medium Term Budget Policy Statement (MTBPS). As anticipated, both the SARB governor and the finance minister announced that the official inflation target will now be set at 3%, changing from the previous target range of 3% to 6%. In addition to this positive sentiment, the SARB Monetary Policy Committee (MPC) unanimously voted to reduce the interest rate by another 25 basis points, with the market anticipating at least two more rate cuts in 2026.
- The JSE All Share posted another strong month, ending the month up 1.7%.
- Resources led the way in October (up 9.6%), as Financials inched higher (up 1.8%), and Industrials detracted sharply (down 4.8%).
- Small-caps (up 4.7%) boasted strong gains for the month, as did Mid-caps (up 4.8%), which both outperformed Large-caps (up 1.4%).
- South African property markets posted another very strong month of returns, on the back of lower bond yields. The ALPI added 7.7%, while the S&P SA REIT Index reported a 9.2% gain.
- SA Nominal Bonds (up 3.4%) gained on the back of the MTBPS, while Inflation-Linked Bonds also bounced (up 4.0%).
- Developed market equities were largely flat, as the MSCI World Index gained (up 0.3% in USD), but still managed to outperform its emerging market peers, as the MSCI Emerging Market Index contracted (down 2.4% in USD).
- The Rand broadly strengthened in October. Relative to the US Dollar (Rand appreciated 1.2%), the Euro (Rand appreciated 0.6%) and the Pound Sterling (Rand appreciated 0.3%).
- Platinum and Gold bounced up 6.9% and 5.9% respectively, and Brent Crude dropped another 2.9%.
Source: Factset
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