The JSE was weaker on Wednesday morning, while global markets were mixed as investors digested a mixed bag of corporate earnings reports in the US.
Despite a tough economic environment, some major banks including Bank of America and JPMorgan surpassed first-quarter expectations, while some companies such as Goldman Sachs and Johnson & Johnson disappointed.
According to analysts, earnings have proven resilient so far with market participants mostly expecting declining profits as companies deal with persistent inflation and rising interest rates.
Oanda senior market analyst Edward Moya warned that “profits topping already low expectations won’t matter to a market staring at a Federal Reserve that’s continuing to tighten into a potential recession.”
“The global backdrop remains largely unchanged as the market continues to anticipate what action central banks will take based on data releases,” said Citadel Global director Bianca Botes.
At 9.40am, the JSE all share had lost 0.87% to 78,603.02 points and the top 40 had slipped 0.88%. Precious metals had fallen 2.87%, resources 1.54%, banks 1.24%, financials 1.13%, industrial metals 0.4% and industrials 0.31%.
Locally, inflation numbers are due, with the consumer price index (CPI) expected to have moderated slightly to 6.9% from 7.0% year on year.
Core inflation is likely to remain sticky, unchanged at 5.2% year on year, supported by delayed price pressures filtering through into the general economy, according to Bloomberg.
“There will be an element of caution in the market as investors await the release of the local inflation and retail sales data, both of which will influence the market’s outlook on rates, which, in turn, influences the carry attractiveness component of the rand,” said RMB analysts.
At 9.19am, the rand had weakened 0.16% to R18.1996/$, 0.21% to R19.9606/€ and 0.6% to R22.6814/£. The euro was unchanged at $1.0967.
Gold lost 0.65% to $1.991.79/oz and platinum 1.37% to $1.067.20/oz. Brent crude was 0.6% weaker at $84.10 a barrel.
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