WM Market Update – October 2016
Global – Interest rates? The FED’s folly
U.S. markets fared poorly during October as continued talk of a rise in U.S. interest rates at year end adversely affected investor sentiment. This was evidenced by the MSCI World Equity Index declining -2.01%. The MSCI Emerging Market Equity Index gained a paltry 0.18% but year to date has returned 13.97%. In spite of the U.S. earnings season being in full swing with an excess of 60% of companies reporting better than expected profits, the S&P 500 declined -1.94% and the Dow Jones shed -0.91%.
Domestic – The long haul begins…
The local market was very much focused on the Medium Term Budget Policy Statement delivered by Finance Minister Pravin Gordhan under the cloud of a threatened arrest on trumped up fraud charges, which were subsequently withdrawn. The Mini-Budget did little to restore investor confidence resulting in the JSE/ ALSI declining 2.49 %. The RESI20 and the INDI25 were both lower at -3.83% and -3. 06% respectively. Industrial Metals were the star performer, returning 10.85% with Kumba Iron Ore up 10.28% and Arcelor Mittal up 29.21%.
