Market Overview
The following is a partial recap of the market analysis shared during today’s morning Discord call.
We start the day in another sea of red in the commodity market, with the pressure remaining firmly in place as the dollar continues to hold strong. Interestingly, the American market was saved by Micron’s (MU) earnings, which outperformed expectations on every front. Subsequently, A.I. and semiconductors are back in the game, pushing up the U.S. market as a whole. It remains to be seen if the momentum continues and for how long, but until then, we expect flows out of East Asia and commodities, and into A.I. and semis.
Commodities
Commodities are currently struggling due to the dollar’s strength, with it standing at over $101 on the dollar index (DXY). This is a direct source of pressure on South Africa’s metal exports, which -with the exception of copper- are universally in the red. We see gold break through previous swing lows around $4030, and if we break through yesterday’s lows at $3960 today, we’ll likely test $3900, which in turn could lead to consolidation between $3800 and $3600. We also see oil drop by another half per cent today, bringing West Texas Intermediate (WTI) below $70. Our next levels for oil are around $68 and $67, as they would close the early war gap.
Local Stocks
KAP Limited (KAP)
Kap was downgraded to underweight by Absa today, with a new target price of R2.4, which is 13% lower than yesterday’s closing rate of R2.7.
Banks
Yesterday, we saw FirstRand (BSR) trade with a significantly elevated volume, closing at the lows with around 6 million shares traded during the day. There was a similar situation with Standard Bank (SBK), with elevated volumes and mass sales, with no particular news or headlines driving it. We recommend keeping an eye on them to see if the selling continues or they bounce today. We also see Capitec (CPI) as likely to be the first to bounce, as it has traded the best out of all the banks in the last few days.
From left to right: FirstRand (FSR), Standard Bank (SBK), and Capitec (CPI).
Vodacom (VOD)
Vodacom saw significant gains yesterday following its upgrade by HSBC. Today could be a second day play, with the R150 as a psychological level to look out for, as we could see further upward movement if it breaks.
Ex-Divs & Economic Data
Today’s most interesting economic data releases are the U.S. GDP and Core PCE reports, both scheduled at 14:30.
Ex-Dividends
| STOCK | PRICE | DIVIDEND | EX-DIV PRICE | CHANGE |
| BTN | R 9.78 | R 0.48 | R 9.30 | -4.91% |
| FTA | R 20.00 | R 0.71 | R 19.29 | -3.55% |
| FTB | R 7.63 | R 0.25 | R 7.38 | -3.28% |
| OCE | R 68.00 | R 1.10 | R 66.90 | -1.62% |
| PPC | R 8.19 | R 0.30 | R 7.89 | -3.66% |
| QFH | R 10.89 | R 0.22 | R 10.67 | -2.02% |
| RLO | R 60.13 | R 0.90 | R 59.23 | -1.50% |
| SYG | R 34.00 | R 1.22 | R 32.78 | -3.59% |
| TKG | R 59.40 | R 2.70 | R 56.70 | -4.55% |
| ENX | R 4.60 | R 1.92 | R 2.68 | -41.74% |
Economic Data
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