The Markets Daily

In 1946, American journalist Henry Hazlitt popularised the belief that economics can be boiled down to one simple lesson: market prices represent the true cost of everything...

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It’s quite bizarre how we immerse ourselves in foreign television series, living vicariously through fictional characters and often far-fetched stories. Some might call it obsessive, others escapism from the harsh realities of life.

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The rand and other EM currencies saw a bit of reprieve yesterday as the greenback lost ground against major currencies on falling US Treasury yields. The Turkish lira was the best performing EM currency, strengthening by 1.9% against the US dollar, followed by the rand and the Mexican peso, which appreciated by 1.6% and 1.4% respectively. Global equity markets also strengthened, with the S&P and Nasdaq gaining 1.4% and 3.7% at yesterday’s trading session.

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Volatility, the nature of global asset markets. Exactly a week ago I discussed the concern about asset bubbles expressed by a regulator in China, but this week it would seem that state backed funds in China have entered the equity market to prevent further declines.

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As we start the week, the world will observe and perhaps in some corners even celebrate international women’s day. This is a day in which the everyday challenges and achievements of women around the world are highlighted. In SA, Gender Based Violence (GBV) is a particular concern which government has turned its focus to.

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In the remarkable story of Hen and Her Fellow-Travellers, the primary character is struck on the head by a pea. Moved to hysteria, Henny Penny spends much of the story warning her friends that the world is coming to an end. The fable doesn’t end well for the beloved band of birds, but the fear that captured their imaginations typifies the feeling gripping global markets.

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Ifs and buts are of little value in financial markets. Understanding fundamentals, plotting technicals, reading sentiment are as much an art as a science but there are some days when neither sense nor luck prevail, and crystal balls would prove useless.

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Global equity stocks retreated on Tuesday following Monday’s gains, as caution prevailed ahead of US economic data releases this week and concerns that stocks may have rallied too far. However, Asian equity stocks were up this morning as investors shrugged off these concerns and concentrated instead on hopes that more US stimulus will continue to propel the economic recovery.

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.Last year the world seemed to be on the backfoot more often than not when facing the spread of the covid-19 pandemic and the economic fallout. Toward the end of the year as the understanding of the nature of the virus improved and with it treatment protocols, and the emergence of a number of vaccination candidates signalled the beginning of a return to normality. 

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Today is the first day of March – it also marks the return to level 1 lockdown restrictions, and later this week it will be exactly one year since SA’s first recorded case of covid-19. So in short, a year since our lives were turned upside down.

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