Market Overview

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

Today’s market opens in the green, as a deal to extend the ceasefire between the U.S. and Iran was reached yesterday, Sunday, and is to be signed on Friday, 19th June. This has resulted in further drops in oil prices, indicating the market’s optimistic sentiment about the situation, which should put pressure on stocks like Sasol (SOL). We also see weakness in Tencent (700) today, which should lead Naspers (NPN) and Prosus (PRX) to fuel growth in the rest of the market, particularly in the commodity sector.

USD/Zar

The U.S. Dollar to Rand exchange rate has fallen below R16.2, which is a rather significant drop, as it brings it down to pre-war levels. We’ve seen a trend of lower and lower highs, beginning in late March, and should commodity prices continue to rise, we could see a drop to R16.0 and further.

Local Stocks

Mondi (MNP)

Mondi will be removed from the FTSE 100 next Monday, 22nd June, which could cause selling pressure on the stock, making it a decent buying opportunity.

Gold Miners

Gold miners stand to benefit from higher gold and lower oil prices. Along with diversified miners, we see gold as today’s best options, with companies like AngloGold Ashanti (ANG) and Harmony Gold (HAR) working as particularly strong options, while companies like DRDGOLD (DRD) are notably lagging behind the rest.

From left to right: AngloGold Ashanti (ANG), Harmony Gold Mining (HAR), DRDGOLD (DRD).

Diversified Miners

Like gold miners, diversified miners stand to benefit greatly from today’s strength across the metal space, with copper and iron in particular playing an important part. We recommend looking into the likes of South32 (S32) and BHP Group (BHG).

Left: South32 (S32), Right: BHP Group (BHG).

Earnings & Economic Data

Today’s relatively quiet in terms of economic data. But the rest of the week will be more interesting, with both domestic and U.S. data coming out.

Pre-Market Earnings

Canopy Growth (CGC)

Canopy Growth is the largest cannabis company, based out of Canada. Their earnings should be kept an eye on if you’re interested in the cannabis space.

Economic Data

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*Please note that these trade ideas form part of a larger weekly plan and the value of financial products can increase as well as decrease over time, depending on the value of the underlying securities and market conditions. The risk of loss arising from trading in Contracts for Difference can be substantial. You should carefully consider whether such investments are suitable for you in the light of your circumstances and financial resources.