Market Overview

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

Yesterday, the U.S. market reached another all-time high, off the back of the PPI figures, with the S&P 500 breaching the level at 7800 points. With no news or catalyst to push in either direction, we expect a quiet session, where the U.S. ends the week on similar levels. Meanwhile, we see yields on the 30-year U.S. Treasury bonds reach their highest point since 2001. Over on our side of the world, we see pressure on the mining sector, as gold, platinum, palladium, and copper drop. But while PGMs (Platinum Group Metals) could have reached a support level, diversified miners BHP Group (GHP) and South32 (S32) are unlikely to be out of the woods yet.

Software

The software sector grew by 3.2%, with Workday in particular taking off after reports of a buyout by the private equity firm, Silver Lake. This has led to growth elsewhere in the sector as well, with the likes of ServiceNow (NOW) and Adobe (ADBE) seeing similar growth as well. ServiceNow in particular saw elevated volumes, and we recommend keeping an eye on it, as it could see further growth, were it to breach the $130 level.

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

Gold

Yesterday was a rough day for gold, as the trend of higher lows was broken. With no positive or negative headlines, it’s possible that we see further drops if the lows of the Asian session, at around $4315, are reached. As such, we also see a drop across the board for gold miners like AngloGold Ashanti (ANG) or Harmony (HAR). However, it’s important to say that some have held better than others, particularly Sibanye Stillwater (SSW) and DRDGOLD (DRD), due to a well-received trading statement and an upgrade, respectively.

From left to right: Gold, Sibanye Stillwater (SSW), and DRDGOLD (DRD).

Local Stocks

Exxaro Resources (EXX)

Exxaro released a trading statement today, where the midpoint came out at R13.71, against an expected midpoint of R16.28. Subsequently, the stock has seen a drastic drop before its earnings, and it’s likely to see further pressure today.

Naspers (NPN)

Naspers seems to have found support around R79, which is likely helped by Tencent’s (700) first day of moving sideways. We see this as a possible trade with decent risk-to-reward, and recommend keeping an eye on Naspers, as it could potentially have a bounce by Monday, especially if Tencent is able to reach HK$445 again.

Truworths International (TRU)

Truworths released a trading statement, which, while not stellar, was enough to cause a decent bounce, as the market flocked to buy it. This correlates with upward movement in other apparel stocks like Foschini (TFG) and Pepkor (PPH).

Economic Data

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