July market economic updates

A round-up of market, economy and currency news.

Global economic growth has slowed but, with more dovish central bank policies, this in our opinion will provide a more positive market outlook as we continue through the second half of the year.
The US Federal Reserve cut interest rates 0.25% for the first time since the financial crisis and suggests that this is not the start of an aggressive easing cycle.
Japan left interest rates unchanged, causing the yen to gain and the pound to drop to a two-year low.
Fitch Ratings announced that it has decided to leave South Africa’s international and domestic credit rating unchanged, but has revised the outlook down from stable to negative.
- Overall, we do agree with the concerns raised by the rating agency, as South Africa’s economic growth remains low at only 0.6% in 2019.
- Fiscal parameters have continued to decline, including the large possibility of revenue shortfall, with ever-looming further funding needed to support failing state-owned enterprises (SOEs).
On the morning of July 30 the rand/dollar reached the R 14.25 mark before the announcement of Eskom’s 2019 financials. Even with the troubled SOE posting a loss of R 20.7 billion this was a positive, as a R25 billion loss was expected.
Among the best-performing shares for the month were Woolworths (12.5%), MTN (5.6%) and British American Tobacco (3.6%)

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