Market Overview

The following is a partial recap of the market analysis shared during today’s morning Discord call.

Today’s opening market is a much greener place, despite yesterday’s gloomy outlook, with news of back-and-forth between the U.S. and Iran seemingly doing little to stop the market from bouncing. Interestingly, the dollar saw a significant drop to below 101.0 on the Dollar Index (DXY), with no particular headlines or narrative changes in the Minutes. This is good news for commodities and equities, and we expect gold, platinum groups, and diversified miners to do well.

Gold

Gold has had a decent bounce since yesterday, but it’s still making lower highs, which means the downwards trend remains in place. We believe $4120 is the level to look out for this morning, while $4200 remains the level it needs to breach to break the trend. As far as gold stocks go, we’ve noted Harmony (HAR) has been taking hits in the last few sessions; it’s currently lagging behind the rest. With gold bouncing, we intend to keep an eye out, as it could present an investment opportunity.

Left: Gold, right Harmony Gold Mining (HAR).

Local Stocks

South Africa and Egypt were upgraded to overweight by Morgan Stanley, which should help with growth in the local stocks.

Naspers (NPN)

Naspers has jumped up by a significant amount, leaving a gap down to around R852. Unfortunately, this is still not enough to break the trend of lower highs, and we believe it has to reach R950-975. Until then, we recommend selling on every move to the upside. Looking at Tencent (700), it was unable to hold yesterday’s highs, leading us to speculate that Naspers will come down and close the gap before retesting the highs again.

Left: Naspers (NPN), right: Tencent Holdings (700).

Telkom (TKG)

Telkom was upgraded to overweight by Absa, with a new target price of R69, which is a 29% increase. Absa’s upgrade has been able to push the need up as of late, so we recommend keeping an eye on it.

Bytes Technology (BYI)

Bytes is on our radar after it released an update today. It has had a massive comeback since its lows earlier this year, rising from below R60 to just short of R90 between two updates, displaying the ability to move quite a bit.

Glencore (GLN)

With copper prices rising, we believe diversified miners should perform well in general. Glencore in particular was upgraded by Goldman Sachs to buy, with a 22% raise, bringing the target price to £6.3.

Earnings & Economic Data

Pre-Market Earnings

Pepsico (PEP)

PepsiCo, or just Pepsi, is a famous American manufacturer of cold drinks, with pre-market earnings today. It’s worth keeping an eye on it, as the results could impact Coca-Cola (KO), its main competitor.

Left: Pepsico (PEP), right: Coca Cola Company (KO).

Economic Data

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