The Week Ahead of 20 November 2018. Global growth ex-US definitely appears to be slowing, with Japan recording a

reduction in third quarter economic growth and Chinese consumer spending and

real estate activity cooling noticeably. Trade talks between the US and China

are showing nascent signs of improvement and it seems possible that the two

sides may reach some sort of agreement at the G20 meeting at the end of this

month. US economic growth, led by robust consumer demand, shows few if any

signs of abating.

Bloomberg reports that the rise in interest rates catalyzed by faster growth

induced by US tax cuts may cause the US credit bubble to pop, according to

hedge fund manager Paul Tudor Jones of Tudor Investment Corporation. "We're

going to stress test our whole corporate credit market for the first time,"

Jones said last week at the Greenwich Economic Forum. "From a markets

perspective, it's going to be interesting. There probably will be some really

scary moments in corporate credit." Jones said zero and negative interest

rates have fuelled excess lending, placing markets in a dangerous condition.

He said today's levels of leverage could be systemically threatening even if

policy makers respond appropriately. Concerns about earnings peaking, trade

wars, oil prices and rising rates have been knocking credit markets, with

global high yield bonds suffering their worst Oct since 2008 and continuing to

sell off this month. Investment grade U.S. corporate debt is posting its worst

year-to-date performance in a decade, falling about 4% through Nov 15,

according to the Bloomberg Barclays index.

In the equity space, share buybacks continued to gain momentum as companies

came out of closed periods. For the third quarter as a whole, it appears

likely that share buybacks will set another record level of around $200

billion. This should help to underpin the US equity market.

Embattled British PM Theresa May endured one of her worst weeks in office last

week, as she doggedly attempted to gain support for her Brexit proposal. A

number of her cabinet colleagues resigned in protest, including the relatively

newly-appointed Brexit Secretary, Dominic Raab. Meanwhile the chairman of the

European Research Group within the Conservative Party, Jacob Rees-Mogg, openly

declared that May should step down as PM and that a new contest for the

Conservative Party leadership should begin.

The next few weeks are likely to be very testing for May as she attempts to

avert a motion of no-confidence in her and as she also tries to steer her

Brexit deal through the British parliament. To stage a motion of no-

confidence, the leader of the 1922 Committee of Conservative back-benchers in

parliament requires 15% of all Conservative MPs to submit letters expressing

their wish for such a vote to take place. That translates into 48 letters.

During the course of next week it may became clearer whether or not those 48

letters have indeed been submitted.

Getting her deal ratified by parliament, on or around 12 Dec, is far from

certain. Conservative rebels are likely to vote against it, as are the

majority of Labour MPs. And her partners in the fragile alliance that gives

her a working majority in parliament, the Democratic Unionist Part of Northern

Ireland, appear to be against it.

The JSE All Share Index fell by 2.2% last week to close on Fri 16 Nov at

52096. Year to date, the Alsi is down 12.4% and from its all time high on 25

Jan this year, it is down 15.6%.

JSE listed company results out this week;

19 November 2018

Netcare - Final

Astral Foods - Final

Invicta - Interim

Pioneer Foods - Final

Economic and related events this week;

20 November 2018

SA Leading Indicator Sep

21 November 2018

SA CPI Oct

22 November 2018

SA Repo rate announcement. Expect no change

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