As we approach the festive season, this will be the last weekly note for 2023. The information covered in this note is up until Friday, December 22nd, at 11:30. We are grateful for your ongoing interest and support, and we wish you and your families a happy and joyful festive season and a prosperous 2024.
In the United States, there was a significant increase in housing starts of 14.8% in November, exceeding expectations and driven by a strong rise of 18.0% in single-family starts. Building permits, however, decreased by 2.5% in November. Existing home sales reported a 0.8% increase in November, beating consensus expectations. Consumer confidence rose in December, influenced by increases in both the expectations and present situation components. Real GDP growth for the third quarter was revised down to +4.9% annualized, below consensus expectations.
In recent geopolitical developments, disruptions in the Red Sea shipping route have occurred as Houthi rebels target oil tankers and container vessels. The U.S. Secretary of Defence announced plans to establish a naval task force to counter these attacks, emphasizing the need for collective international action. Brent Crude Oil rose 4.25% during the week, reaching $80.13/bbl.
In the UK, November inflation figures surprised to the downside for services, core, and headline inflation. Core inflation cooled notably to 0.04%, primarily driven by a slowdown in core goods. The FTSE 100 gained 1.56% during the week.
In Japan, there was a slight downturn in export value in November, marking the first decrease since August, while import value continued to decline significantly. Consequently, Japan’s trade deficit narrowed to -¥776.9 billion, an improvement from -¥2.1 trillion in November 2022. The Nikkei 225 closed the week in positive territory up 0.52%, with a strong YTD move of 27%.
Global equity markets showed mixed performance during the week. In the U.S., major indices saw positive gains, with the S&P 500 up 0.58%, the Dow Jones Industrial Average up 0.27%, and the Nasdaq Composite up 1.01%. Euro Stoxx 50 had a tough week, closing lower by -0.80%. Chinese equity markets also ended the week lower, with the Hang Seng dropping -1.13% and the Shanghai Composite down -0.81%.
Market Moves of the Week:
In South Africa, a new nuclear procurement process for 2,500 MW has been initiated, with plans to launch Requests for Proposals (RFP) by March 2024. The National Energy Regulator of South Africa (NERSA) approved the Department of Mineral Resources and Energy (DMRE) to proceed with the procurement process, subject to certain conditions. These conditions include establishing a demand and generation profile analysis and ensuring the use of engineering, procurement, and construction contract principles during the procurement phase.
Additionally, the National Treasury is reportedly considering withdrawing up to half of the R497 billion ($27.3 billion) of contingency reserves held by the central bank. This move is being contemplated to help reduce the government’s debt load or fund public-sector wages. Discussions between the Treasury and the central bank are reportedly close to finalising the terms of the draw-down from the Gold & Foreign Exchange Contingency Reserve Account.
On the local equity front, the JSE ALSI ending the week down -1.06%. Sectors performance was mixed, with Resources up 5.77%, and Financials up 0.56%. Conversely Industrials had a tough week closing down -7.03%. SA Listed Property continued its recent positive trend, ending the week higher up 1.05%.
Chart of the Week:
Important Information
The information included above as well as individual companies and/or securities mentioned should not be construed as investment advice, a recommendation to buy or sell or an indication of trading intent on behalf of any STRATEGIQ product. This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action. Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy. All charts and tables are shown for illustrative purposes only.
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