The JSE was weaker on Friday morning, along with its global peers as investors contended with mixed US economic data and disappointing corporate results from tech giants.
US GDP expanded by an annualised 2.6% in the third quarter, higher than the market consensus estimate of 2.3%, ending two straight quarters of declining output.
There was also some good news on inflation: CNBC reported on Thursday that the chain-weighted price index — a cost-of-living measure that is adjusted to reflect changing consumer behaviour — rose 4.1% in the quarter, well below the 5.3% estimate. In addition, the personal consumption expenditures price index, an important measure for the Federal Reserve, increased 4.2%, down sharply from 7.3% in the prior quarter.
Meanwhile, tech giants Microsoft, Alphabet, Google and Facebook’s parent company Meta Platforms posted disappointing results, well below market expectations.
The earnings just turned noticeably sour as “big tech dumped some big misses”, analysts said. The concern is that the high-yield [high treasury yields] environment that investors fretted would hurt technology companies more than most, is becoming a reality.
“The US economy appears to have bounced back from those two [previous] negative GDP readings. The strong headline number is welcome news, but when you dig into the numbers it is clear that an economic slowdown is here,” said Oanda senior market analyst Edward Moya.
“Consumer spending is softening and prices are coming down quickly. Business investment is clearly weakening. The economy is slowing and that is sending treasury yields lower as recession bets grow, while safe-haven flows are powering both the yen and dollar today as global recession risks grow,” said Moya.
At 10.15am, the JSE all share had lost 1.59% to 66,057 points and the top 40 1.77%. Industrial metals fell 2.72%, resources 1.1.86%, industrials 1.79%, precious metals 1.2%, banks 1.2% and financials 0.93%.
At the same time in Europe, London’s FTSE 100 lost 0.78%, France’s CAC 40 0.53% and Germany’s DAX 0.92%.
Earlier in Asia, the Shanghai Composite fell 2.25%, Hong Kong’s Hang Seng 3.87% and Japan’s Nikkei 0.88%.
At 10.27am, the rand had weakened 0.72% to R18.1052/$, 0.58% to R17.9980/€ and 0.4% to R20.8502/£. The euro was 0.21% weaker at $0.9940.
Gold lost 0.69% to $1,650.76/oz and platinum 1.16% to $946.40/oz. Brent crude was 0.1% weaker at $94.57 a barrel.
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