6 - 12 November 2015
A look at local and international economic data, major events, economic releases and company news expected in the week to come.
By Shaun Murison, Market Analyst
Former “blue chip” counter (current midcap stock) Truworths announced that retail sales for the first 18 trading weeks, of the 2016 financial year, increased by 19% (vs prior year’s 18 week comparative) to R4.4 billion, as cash sales grew by 25% and credit sales by 17%. The news has lifted short term sentiment around the health of the consumer and in turn improving the retail sectors near term outlook.
Despite a brief reprise in the resource sector, following Chinese Premiere Li Keqiang’s comments, that the China had capacity to maintain economic growth above 6.5%, gains were short lived as the prospect of a nearing U.S. rate hike emerged as the prominent market theme once again.
Shares Bhp Billiton, AngloGold Ashanti and Anglo American Platinum found themselves at the forefront of decline in lieu of the aforementioned market theme which equated to further dollar strength and commodity price weakness.
Luxury goods maker Richemont saw a negative reaction to its results, which although robust, fell short of analyst estimates and where the market’s pricing of the share. Some of the salient features of the interim results were as follows:
|9 Nov||AngloGold Ashanti Ltd (SA)||Q3 2015 Earnings release||N/A|
|9 Nov||Remgro Ltd||Ex-dividend||259c|
|9 Nov||Lonmin PLC (SA)||Full-year 2015 earnings release||N/A|
|9 Nov||Vodacom Group Ltd||Interim 2015/16 earnings release||N/A|
|9 Nov||Lewis Group Ltd||Half year 2015 earnings release||N/A|
|9 Nov||Raubex Group Ltd||Interim 2015/2016 earnings release||N/A|
|10 Nov||Steinhoff International Holdings Ltd||Ex-dividend||0.5983USD|
|10 Nov||Capital & Counties||Trading statement expected||N/A|
|12 Nov||Sappi||Full-year 2015 earnings release||N/A|
|12 Nov||SABMiller Plc||Half-year 2016 earnings release||N/A|
Source: Economic Calendar, as of 06/11/2015
A resource led rally at the beginning of the week was halted and reversed following a hawkish interpretation of Federal Chair person, Ms Janet Yellens testimony on Wednesday evening. Ms Yellen’s comments that a December rate hike remains a “live possibility” unnerved markets.
The tail end of the week saw the release of employment data provide further support to the sentiment of those expecting a U.S. rate hike in December. U.S. Non-Farm Employment data showed 271000 jobs to have been added to the payroll in October 2015. The figure was well ahead of consensus estimates which had predicted that 185000 jobs would have been added. The Unemployment rate was reported as having remained at the 5% level last month.
The rand was at the mercy of a strengthening Dollar on the aforementioned U.S. headlines as emerging market currencies fell under increased pressure. The rand was trading firmly above the R14 to the dollar mark at the end of the week, although only marginally weaker against the Euro and the British pound.
The Week Ahead
The new week will see market participants focus on Chinese industrial production data on Wednesday, as well as European Central bank President Mario Draghi’s public address. Friday will see continued focus on U.S. data with Consumer Sentiment and Retail Sales data scheduled for release. Friday will also see the health of the Eurozone assessed with the release of Q3 GDP data from the region, the most significant of which being Germany’s GDP print.
At home we await further evidence relating to the health of the local manufacturing and mining industries with the release of production and sales data on Tuesday (Manufacturing) and Thursday (Mining).
|10 Nov||15:30||CNY||CPI y/y||1.60%|
|10 Nov||13:00||SA||Manufacturing production & sales||-0.20%|
|11 Nov||07:30||CNY||Industrial Production y/y||5.70%|
|11 Nov||GBP||Claimant Count Change||4.6k|
|11 Nov||15:15||EUR||ECB President Draghi Speaks|
|12 Nov||11:30||SA||Mining production & sales||3.80%|
|12 Nov||15:30||USD||Unemployment claims||276k|
|13 Nov||09:00||EUR||German Prelim GDP q/q||0.40%|
|13 Nov||15:30||USD||Core retail sales m/m||-0.30%|
|13 Nov||15:30||USD||PPI m/m||-0.50%|
|13 Nov||15:30||USD||Retail sales m/m||0.10%|
|13 Nov||17:00||USD||Prelim UoM Consumer Sentiment||90|
Source: Economic Calendar, as of 06/11/2015
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Source: iNet BFA, as of 06/11/2015