The Week That Was
Wall Street concluded last week on a starkly negative note, with the S&P 500 experiencing its sharpest decline since January, plummeting 1.4%. The Dow Jones Industrial Average also suffered significant losses, dropping 475 points, while the Nasdaq Composite decreased by 1.6%. The downturn was largely driven by disappointing US earnings reports from major banks and growing geopolitical tensions in the Middle East.
Shares of financial institutions faced notable declines. JPMorgan Chase saw its stock dip 6.3%, even though it surpassed earnings and revenue forecasts.
Similarly, despite a 7% drop in profits, Wells Fargo's shares only decreased by 0.3%. Citigroup's shares fell by 1.6%. Additionally, BlackRock experienced a 2.6% decline in its share price despite reporting a 36% rise in profits.
The technology sector also witnessed retreats, with major firms like Microsoft, Nvidia, and Alphabet seeing declines of 1.4%, 2.7%, and 1%, respectively. AMD and Intel faced even steeper losses of 4.2% and 5.2% following reports that China is instructing its major telecom carriers to stop using foreign processors.
Overall, for the week, the S&P 500 dropped 1.6%, the Dow Jones decreased by 2.4%, and the Nasdaq Composite saw a modest decline of 0.6%. The JSE All Share index finished the trading week nearly unchanged, closing at 75 312 on Friday, close to its highest level in three months.
This stability came as strong performances in resource sectors, especially gold mining companies, balanced out declines in financial, industrial, and technology stocks.
Market participants are also adjusting to the expectation that the US Federal Reserve may not cut interest rates anytime soon.
Domestically, traders are anticipating the release of key economic data, including March inflation and retail sales figures, expected this week.
Over the course of the week, the JSE All Share index saw a modest rise of 0.7%.
The Week Ahead
In the US, traders and investors will be keeping a close eye on retail sales data and statements from several Federal Reserve policymakers.
The first quarter US earnings season moves into its second week, featuring reports from major financial firms such as Goldman Sachs, Bank of America, Morgan Stanley, American Express, Blackstone, and Charles Schwab. Other notable companies releasing earnings include UnitedHealth, Taiwan Semiconductor Manufacturing, Netflix, Procter & Gamble, Johnson & Johnson, ASML Holding, Abbott, ProLogis, Intuitive Surgical, and Elevance Health.
March retail sales are projected to show a 0.3% increase, following a 0.6% rise in February. The housing market will also come under scrutiny with updates on building permits, housing starts, existing home sales, and the NAHB Housing Market Index.
In Europe, the week will be relatively light on economic data. Key releases include the ZEW economic sentiment and producer prices for Germany.
Additionally, the Euro Area will see the final figures for inflation, industrial production, and trade balance, while Italy will publish its final inflation and trade balance data.
In the UK, the focus will be on the unemployment rate, wage growth, inflation rate, and retail sales, offering critical insights into the economy's health after recent positive monthly GDP figures.
In China, attention will centre on GDP figures, which are expected to confirm the economy grew at the government's target rate of 5%. Other important data includes industrial production, retail sales, the unemployment rate, house prices for March, and first-quarter credit statistics.
In Japan, the market will monitor the trade balance and inflation rate for March to assess the impact of a weaker yen, along with the Reuters Tankan index for April.
Key Themes for the Week Ahead
South Africa News
The Independent Electoral Commission has swiftly filed an urgent appeal with the Constitutional Court. The appeal seeks to reverse the decision of the electoral court that permitted Zuma to participate in this year's elections. The commission argues that Zuma should be disqualified as a candidate because he received a 15-month prison sentence for contempt of court. Additionally, the commission is requesting that the Electoral Court clarify the rationale behind its decision.
The National Department of Transport, the Gauteng provincial government, and the road agency SANRAL have announced the discontinuation of the contentious e-tolling system as of last Thursday. However, it is important for motorists to note that this cancellation does not absolve them of any outstanding debts incurred from the system.
The surge in crime at petrol stations across South Africa has significantly impacted many individuals, whether they are refuelling or purchasing supplies. Notably, patrons using automated teller machines (ATMs), commonly located at these stations, have frequently been targeted. Additionally, the petrol stations themselves have not been spared, with violent incidents such as robberies focusing on their cash safes becoming increasingly common.
Economic Calendar
In the upcoming economic calendar for this week, several significant events are scheduled to take place.
Source: incorporates insights from reports by Reuters and Investing.com.
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