U.S. consumer credit crunch
According to a survey released by the Federal Reserve Bank of New York, U.S. consumers had a tougher time accessing credit this year, with applications for auto loans and mortgage refinancing being turned down at the highest rates in more than a decade. Despite largely stable demand, applications for various forms of credit were increasingly rejected in 2024. Bloomberg reports that Americans also became more pessimistic about their ability to tap credit in the future.
S&P 500 to reach 6,500 by 2025
According to Goldman Sachs (GS-NASQ) chief equity strategist David Kostin, the S&P 500 Index (VOO-NASQ) will rise through the end of next year amid continued US economic expansion and earnings growth. Kostin boosted his S&P 500 target to 6,500 for year-end 2025, about 10% above current levels, and higher than his previous 12-month target of 6,300. The new prediction matches that of Morgan Stanley’s (MS-NASQ) Mike Wilson, who recently boosted his own forecast for U.S. equities. “In our baseline macro outlook, the economy and earnings continue to grow and bond yields remain around current levels,” Kostin wrote in a note.
Positive PGM outlook
Bloomberg reports that Trump advisers plan to reexamine fuel economy requirements that were finalised in June 2024. They’re also targeting related standards imposed by the US Environmental Protection Agency (EPA) that limit tailpipe emissions of carbon dioxide and smog-forming compounds, which could provide tailwinds for the PGM sector.
Corporate margin pressure loading in U.S.
According to Bloomberg, corporate margins in the U.S. will become a larger focus when tariffs land as soon as next year, as economists expect because companies will have to make the choice of either passing the costs on to the consumers or taking a hit on margins.
SA Inc. upgraded!
The South African rand (ZAR) and bonds rallied briefly at the start of last week (before the Russian missile strike scuppered gains) after S&P Global Ratings raised its view of the nation to positive from stable. This is only the second time this is happened during President Cyril Ramaphosa’s tenure. The move indicated the ratings company’s next move may well be an upgrade of the credit. The ZAR also strengthened after the Reserve Bank cut interest rates by 25 basis points.
Prosus, Naspers expect higher earnings per share
According to trading statements from Prosus (PRX-JSE) and Naspers (NPN-JSE), the companies expect strong core headline earnings per share driven by accelerated growth and improved profitability of consolidated e-commerce businesses and equity-accounted investments, in particular Tencent.
Stock focus: WeBuyCars
WeBuyCars (WBC-JSE) released a bullish outlook statement, highlighting six new sites under development, with a strong balance sheet able to fund this growth. While the stock has run very hard, momentum remains strong and should improve into the new financial year as new car sales pick up in line with rising consumer confidence and falling interest rates. The company reiterated that it expects to sell more than 23,000 units a month by 2028.
Trading update : 22 November 2024
The Trump Trade remains omnipotent, buoying sectors like tech while sowing uncertainty in sectors like big pharma. Outflows from the world’s biggest emerging market continued unabated, but good news for SA Inc. helped boost the rand before geopolitics took some of the wind out of our sails.
Trump trade remains omnipotent!
The Nasdaq 100 halted a five-day run of losses, with Tesla (TSLA-NASQ) jumping 5.6% on a news report that Trump’s transition team is seeking to ease the federal framework for fully self-driving vehicles. The stock is now up 60% from pre-election levels and Trump looks set to prioritise a Federal framework for autonomous vehicles. Uber (UBER-NASQ) fell -5.3% and Lyft was down -4.2% on the other side of this coin. Bitcoin kicked another 1.8% to push through the $90,000 mark again on its way towards the $100,000 level. However, Eli Lilly (LLY-NASQ) fell another -2.5% and is down -13% on a view that weight-loss drugs won’t be covered by Medicare under the Trump regime. There is also uncertainty swirling in the pharma world following the nomination of RFK Jr to head the Health Administration in Trump’s cabinet.
U.S. growth risks under Trump
While equities and the dollar continue to surge on the Trump Trade, his proposed tariffs will likely dent U.S. economic growth going into 2026, according to Morgan Stanley’s (MS-NASQ) chief global economist, Seth Carpenter.
China outflows continue
The $8.2 billion iShares China Large-Cap ETF (FXI-NASQ) extended a five-week streak of withdrawals when the index saw $984 million in weekly outflows, the most on record. The KraneShares CSI China Internet ETF (KWEB-NASQ) recorded $710 million in outflows over the same period, according to a Bloomberg report.
BoE’S Greene wants cautious rate-cut approach
Bank of England policymaker Megan Greene said underlying inflation pressures in the UK are too high for comfort, and made the case for a cautious approach to cutting interest rates. Speaking at an event in London, Greene said inflation was coming down but the battle to keep it on track is not yet over. “Services inflation hasn’t been coming down as quickly as I’d like to see,” she said. “Wage growth is higher than what we would like to see for an inflation target of 2%. There’s some risk that wage growth might be stickier than we would hope, and consequently services inflation and overall inflation might be too.” A Bloomberg report quoted her as saying: “The risk of cutting too early or too aggressively is a greater risk than going a bit more slowly.”
U.S. consumer credit crunch
According to a survey released by the Federal Reserve Bank of New York, U.S. consumers had a tougher time accessing credit this year, with applications for auto loans and mortgage refinancing being turned down at the highest rates in more than a decade. Despite largely stable demand, applications for various forms of credit were increasingly rejected in 2024. Bloomberg reports that Americans also became more pessimistic about their ability to tap credit in the future.
S&P 500 to reach 6,500 by 2025
According to Goldman Sachs (GS-NASQ) chief equity strategist David Kostin, the S&P 500 Index (VOO-NASQ) will rise through the end of next year amid continued US economic expansion and earnings growth. Kostin boosted his S&P 500 target to 6,500 for year-end 2025, about 10% above current levels, and higher than his previous 12-month target of 6,300. The new prediction matches that of Morgan Stanley’s (MS-NASQ) Mike Wilson, who recently boosted his own forecast for U.S. equities. “In our baseline macro outlook, the economy and earnings continue to grow and bond yields remain around current levels,” Kostin wrote in a note.
Positive PGM outlook
Bloomberg reports that Trump advisers plan to reexamine fuel economy requirements that were finalised in June 2024. They’re also targeting related standards imposed by the US Environmental Protection Agency (EPA) that limit tailpipe emissions of carbon dioxide and smog-forming compounds, which could provide tailwinds for the PGM sector.
Corporate margin pressure loading in U.S.
According to Bloomberg, corporate margins in the U.S. will become a larger focus when tariffs land as soon as next year, as economists expect because companies will have to make the choice of either passing the costs on to the consumers or taking a hit on margins.
SA Inc. upgraded!
The South African rand (ZAR) and bonds rallied briefly at the start of last week (before the Russian missile strike scuppered gains) after S&P Global Ratings raised its view of the nation to positive from stable. This is only the second time this is happened during President Cyril Ramaphosa’s tenure. The move indicated the ratings company’s next move may well be an upgrade of the credit. The ZAR also strengthened after the Reserve Bank cut interest rates by 25 basis points.
Prosus, Naspers expect higher earnings per share
According to trading statements from Prosus (PRX-JSE) and Naspers (NPN-JSE), the companies expect strong core headline earnings per share driven by accelerated growth and improved profitability of consolidated e-commerce businesses and equity-accounted investments, in particular Tencent.
Stock focus: WeBuyCars
WeBuyCars (WBC-JSE) released a bullish outlook statement, highlighting six new sites under development, with a strong balance sheet able to fund this growth. While the stock has run very hard, momentum remains strong and should improve into the new financial year as new car sales pick up in line with rising consumer confidence and falling interest rates. The company reiterated that it expects to sell more than 23,000 units a month by 2028.
Petro Wells
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