All share October losses now 8.74%

The JSE all share closed weaker on Friday as global risk-off sentiment continued to affect markets negatively while growth in the US again exceeded expectations.

In broad-based losses, the all share closed 1.53% lower at 50,837.60 points and the top 40 shed 1.68%, with Naspers hitting levels last seen in May 2017. Sasol dropped 2.84% to R475, despite Brent crude rising marginally to $76.8 a barrel.

Naspers closed 3.27% lower at R2,559 and is down 25.8% in 2018.

The all share ended the week 2.41% lower, extending October’s losses to 8.74%. It is down 14.57% in 2018.

US GDP growth for the third quarter came in at 3.5%, lower than the previous quarter’s 4.2% but higher than the predicted 3.3%. The data indicates that the US economy is still performing strongly despite disappointing housing data released recently.

The Dow was 1.7% lower at the JSE’s close amid concern that growth has peaked in the US with thirdquarter earnings indicating softer numbers ahead.

Local sentiment was negative after ratings agency Moody’s questioned the spending ceilings announced in finance minister Tito Mboweni’s medium-term budget policy statement. “They will be challenging to meet and [this] is credit-negative for SA,” said Moody’s, the only one of the three major rating agencies that still has SA on investment grade, one notch above junk.

There is a fair amount of economic data out next week, but nothing that should move markets, FNB economists said.

September’s private-sector credit extension numbers are due on Monday and could show a mild deceleration. The quarterly labour force survey is set to be released on Tuesday and is again likely to reflect distressingly high unemployment numbers.

Wednesday will see the publication of September’s trade numbers, with a surplus of R8.8bn predicted. October’s Absa purchasing managers index data for the manufacturing sector is unlikely to show a meaningful improvement. October’s vehicle sales could see a mild recovery, driven by large discounts and incentives to move stock.

With regard to companies, Famous Brands is set to report interim numbers on Monday. In a recent trading statement, management issued guidance for headline earnings per share to increase by 3% to 14%. It closed 4.14% lower at R100.65 on Friday.

The rand was at R14.6357 to the dollar from R14.6271 in late trade on Friday, while the benchmark R186 government bond was bid at 9.31% from 9.37%.