Market Overview

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

Today’s market opens on the downside, as we see red nearly everywhere. The U.S. tech sector saw the inverse correlation between the semis and software sectors change for a day, as both dropped. At the same time, a weaker Rand and weakness in the metals space are expected to put significant pressure on our mining- and export-driven economy. As such, we expect a quiet session today as a prelude to a more eventful week for the local market, as many of the major local stocks are scheduled to release production figures and earnings, starting next Monday (27th July).

Software

Between semis and softwares, it was the latter that saw the more significant drop yesterday. While ServiceNow’s (NOW) earnings on Wednesday saw it beat expectations by a slight margin, it seems not to have been enough to make a change for the sector, or the stock. We believe that if ServiceNow breaches the $88 level, it could go further down, into the low 80s, before finding support. Another notable underperformer is Oracle (ORCL), which just seems to be unable to make a turnaround, despite receiving a 10-year software contract from the Pentagon yesterday. It’s currently at 2024 levels, and the selling seems not to be done just yet.

From left to right:  iShares Expanded Tech-Software Sector ETF (IGV), ServiceNow (NOW), and Oracle (ORCL).

Local Stocks

Aspen Pharmacare (APN)

Aspen was downgraded to sell by the Standard Bank. While the target price has barely changed, with a marginal 2% change in the green, it could cause the stock to see a drop today.

Discovery (DSY)

Discovery stands out for its performance yesterday, as it was about to go up, even touching R260 at one point, before closing the session at R255. It’s the strongest of the local options at the moment.

Sanlam (SLM)

Sanlam had another bad day yesterday, closing the day at R84. This could ironically be a blessing in disguise, as R84 has been a buying interest level, and as such, it could have a bit of a bounce.

Earnings & Economic Data

Pre-Market Earnings

Verizon (VZ)

Verizon is the largest telecommunications company in the U.S., and the second largest worldwide.

American Express (AXP)

American Express is an international bank, payment card and financial services provider, and the fourth in the world by purchase volume.

Economic Data

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