Stimulatory Measures – 3rd Quarter September 2020
Stimulatory measures are typically used by governments and central banks as a package of economic measures put together to stimulate a stagnating economy with the objective being to reinvigorate the economy and prevent (or reverse) a recession by “stimulating” employment and spending. In the U.S. markets rose in Q3 on the back of continuing facilitating Federal Reserve monetary policy and early signs of a pickup in economic activity. The Federal Reserve will now employ average inflation targeting in setting interest rates which is indicative of prolonged liquidity easing. The provision of additional fiscal stimulus measures remains deadlocked as the parties, Democrats and Republicans, dispute as to the quantum of the stimulus to be provided.
Emerging Markets – 3rd Quarter September 2020
Emerging markets were the star performer for the quarter led by a surge in Chinese economic activity. The MSCI Emerging Market Index increased in value and outperformed the MSCI World Index. This was evidenced by the Chinese economy growing 3.2% y/y in Q2 of 2020, reversing a – 6.8% contraction in Q1 and beating market consensus of 2.5% growth amid relaxed lockdown measures. China’s economic recovery is however somewhat vulnerable to losing momentum as key trading partners struggle with resurgences of the deadly coronavirus and resort to fresh measures to control its spread. Tensions with the U.S. escalated during the quarter including new restrictions on Chinese company Huawei and President Trump’s executive order preventing US companies from doing business with TikTok and WeChat. Chinese Q2 earnings results were also ahead of expectations particularly in the e-commerce sector.
Global Markets – 3rd Quarter September 2020
U.S. Even though September ended as a down month, overall Q3 was positive. All the major indices improved over the quarter the S&P 500 up 8.2%,the NASDAQ up 11.0% and the Dow Jones Industrial Average up 7.4%. Big Tech (Amazon, Apple, Alphabet, Facebook and Microsoft) counters were some of the best-performing stocks over the past quarter. The Federal Reserve’s use of average inflation targeting suggests that rates could be almost zero bound up to and including 2023. Markets reflected ongoing uncertainty in the later part of Q3 amid a resurgence of the virus in Europe as well as a continuation of the number of new cases in various U.S. States. Adding to the uncertainty is the upcoming Presidential election on the 3rd November with its inherent problems. U.S. unemployment numbers declined down to 8.4% in August from July’s 10.2% and... Read More
Local Equity Market – 4th Quarter 2021
The local equity market (+8.7%) outperformed both developed (+7.8%) and emerging markets (-1.3%) peers in base currencies. This was driven primarily by strong performances from Resources (+22.2%) and Industrials (+16.1%). The GTC Flexible Fund exactly tracked the Capped Swix Index on a net of fee basis for Quarter 4 of 2021 and outperformed the Index for the calendar year with a pleasing 28.8% return. GTC Flexible Fund As at 31 Dec 2021 3M 6M 1YR 2YR Since common inception GTC Flexible 8.69 12.15 28.56 12.61 10.19 Industry Peer 1 7.98 11.45 26.18 12.50 9.80 Industry Peer 2 8.51 11.82 26.51 12.40 9.59 Industry Peer 3 8.68 12.15 26.72 12.50 9.95 Industry Peer 4 8.49 11.58 25.78 11.81 8.96 FTSE/JSE Capped SWIX All Share Index 8.68 12.15 27.08 13.05 10.20 All returns are net of fees. Returns longer than 1 year... Read More
Local Equity Market – 3rd Quarter September 2020
The JSE/FTSE All Share performance for the quarter was somewhat pedestrian but nevertheless remained positive returning 0.67% with the JSE/FTSE SWIX delivering -0.33%. Covid-19 escalated during the quarter but the authorities have to be congratulated on the manner in which the pandemic was managed. Most market sectors delivered lackluster or negative performance as both political and economic uncertainty continued to undermine investor confidence. Overall market performance was fortunately supported by rallies in both gold and platinum counters which both attracted increased demand. The Resources sector returned 5.71% for the quarter and was by far the best performer. Financials managed to muster a positive return of 0.47% despite having come under repeated selling pressure. The Industrial sector eased as Naspers sold off in line with global tech stocks delivering a negative – 2.29% for the quarter. The Property sector came in... Read More
