JSE, rand weaker after US jobs data

The JSE closed slightly weaker on Friday, while the rand weakened the most in more than two weeks after US jobs data came in stronger than expected.

Data showed that 353,000 jobs were created in January, more than the market’s estimate for 185,000, while the unemployment rate held at 3.7%, against an estimate of 3.8%.

While the report demonstrated the resilience of the US economy, it could raise questions about how soon the Federal Reserve will be able to lower interest rates, reported Bloomberg.

The Fed kept interest rates steady last week but pushed back against market expectations for a cut at the March meeting, highlighting the need to see inflation coming down more “sustainably towards” its 2% goal.

The CME FedWatch Tool, which estimates the trajectory of US monetary policy implied by options betting, showed a 19.5% chance of a cut of 25 basis points in March, down from 38% on Thursday, Bloomberg reported.

“The US jobs data make for a complicated picture for the Fed as it tries to ease monetary policy. The data might put pressure on the central bank to further delay the start of its planned interest rate cuts,” said SPI Asset Management partner Stephen Innes.

The JSE all share index lost 0.12% to 74,381.06 points and the top 40 eased 0.14%. The precious metals and mining index lost 1.66%, resources 1.37%, industrial metals 0.93% and retailers 0.26%. Food producers gained 1.56%, industrials 0.56%, while listed property and banks both added 0.4%.

At 5.54pm, the Dow Jones industrial average was flat, while European markets were marginally firmer.

Shares in social media giants Meta and Amazon jumped in the US session after they reported earnings that beat expectations. Meta, the parent of Facebook, announced it would pay a quarterly dividend for the first time, and it authorised a $50bn share buyback programme. Apple, however, posted a decline in sales in China during the fiscal first quarter.

Investors are keeping a close eye on big tech stocks — they are the market’s most influential because they are the biggest, and they are facing high expectations after soaring much more than the rest of the market in 2023, reported Reuters.

The rand reversed gains after the strong US jobs data, touching an intraday worst of R18.9304/$. At 5.18pm, the rand had weakened 1.66% to R18.9004/$, 0.97% to R20.3958/€ and 0.87% to R23.8942/£. The euro was 0.74% weaker at $1.079.

Gold lost 1.23% to $2,029.09/oz and platinum shed 1.76% to $895.44/oz. Brent crude was 1.29% weaker at $77.78 a barrel.