Market commentary
Both the local market and rand traded higher on Friday due to stellar performances from miners and banks, “cautious optimism” of China reducing lockdown measures, and easing fears about the US Federal Reserve’s (Fed) policy stance. Trading Economics also stated that the JSE All Share rose 4.31% for the week – its best week since January 2021.
Wall Street ended Friday in the green, with the Nasdaq and the S&P 500 well above 2% “as signs of peaking inflation and consumer resilience sent investors into the long holiday weekend with growing optimism that the Fed will be able to tighten monetary policy without tipping the economy into recession,” noted Reuters. The upbeat US data also swayed European investors, pushing the Pan-European STOXX 600 to close up by 1.42% and about 3% for the week.
Hong Kong stocks rose about 3% on Friday after comments by a US official about the US-China relationship were seen as positive, possible additional growth revival measures from Beijing, and a boost from the tech sector on the back of expectation-beating earning results from Alibaba Group and Baidu. “The United States will not block China from growing its economy, but wants it to adhere to international rules, Secretary of State Antony Blinken said in a speech on US strategy towards China,” Reuters reported. Japan’s Nikkei rose 0.66% on Friday as profit-taking curbed gains following an overnight Wall Street rally.
Brent crude continued its rally, gaining over 5% for the week due to global supply concerns. Trading Economics stated that the latest EIA data emphasised a tighter market due to “a larger-than-expected drawdown in US crude inventories last week due to soaring exports”. Gold prices inched higher on Friday as the US dollar and US Treasury yields softened on less aggressive policy tightening expectations from the Fed.
