JSE weaker as focus shifts to Fed

The JSE closed marginally firmer on Tuesday, with global peers mixed as investors braced for the Federal Reserve (Fed) decision today and corporate earnings from the two megacap technology companies.

The federal open market committee (FOMC) is generally expected to keep interest rates steady when it concludes its first two-day meeting for the year on Wednesday. Investors will, however, focus on comments after the meeting from Fed chair Jerome Powell for clues on the US central bank’s policy outlook.

“Focus remains on the Fed for their interest rate decision post their FOMC meeting. Investors will be looking for fresh clues as to the Fed’s interest rate trajectory,” said RMB head of forex execution Matete Thulare. “For now, though, interest rates are expected to remain on hold.”

The JSE all share gained 0.24% to 74,548 points and the top 40 0.22%. Food producers rose 2.01%, precious metals 1.63%, resources 1.03%, listed property 0.76%, industrial metals 0.46% and financials 0.34%. Retailers lost 0.39% and industrials 0.18%.

At 5.20pm, the Dow Jones industrial average was 0.16% weaker at 38,273 points and the S&P 500 was little changed. In Europe, the FTSE 100 had gained 0.52%, France’s CAC 40 was up 0.48% and Germany’s DAX 0.11%.

Investors will also be looking into and the earnings’ Google s updates parent, from Alphabet, Microsoft to report after the bell on Tuesday.

These companies, which are part of a group known as the “Magnificent Seven”, have been closely watched by market participants after driving up the S&P 500 with their outsize gains.

Investors will be focusing on these tech giants’ progress in making money from artificial intelligence, reported Bloomberg.

Investors are also keeping a close eye on developments in China after a court in Hong Kong ordered the liquidation of Evergrande, raising questions about the state of the Chinese property sector.

At 5.08pm, the rand had weakened 0.32% to R18.8405/$. The currency remained trapped in tight ranges, with many participants sitting on the sidelines ahead of the FOMC decision, said Thulare. It was 0.37% weaker at R20.4133/€, while it was little changed at R23.8573/£. The euro was 0.18% weaker at $1.0813.

Gold gained 0.21% to $2,035.83/oz, while platinum lost 0.59% to $921.03/oz. Brent crude was 0.15% weaker at $81.78 a barrel.