The JSE broke a six-session losing streak on Monday as markets rebounded after last week’s risk-off global environment.
Investors are eyeing the Federal Reserve’s annual economic symposium at Jackson Hole this week, with Fed chair Jerome Powell expected to deliver his address on Friday.
Market participants will be watching for signs whether the US central bank considers inflation to be under control or if more interest rate hikes are needed to cool inflation. Fed officials have used the event in previous years to indicate changes in policy direction.
Inflation in the US has declined from its peak of more than 9% in 2022, but remains above the Fed’s 2% target. Data last week showed that consumer prices rose 3.2% in July compared with a year earlier, up from the previous month’s 3% increase.
Economists have said the final step in getting inflation back to the Fed’s target may prove the most difficult.
“Stocks saw a small bounce-back on Monday as traders looked ahead to key earnings reports this week and Powell’s speech at Jackson Hole,” said SPI Asset Management managing partner Stephen Innes. “After a three-week slump in equities, investors are eyeing major firms in the AI space to report financials this week, which could swing markets higher.”
“Powell’s much-anticipated remarks on the US economy at Jackson Hole on Friday could be the perfect opportunity to jolt stocks back on their bullish path,” added Innes.
The JSE all share gained 0.93% to 73,760.21 points, while the top 40 added 0.98%. Banks gained 2.18%, financials 1.8%, industrial metals 1.1%, food producers 0.84% and industrials 0.71%. The precious metals and mining index lost 0.62%.
At 5.50pm, the Dow Jones industrial average was little changed, while markets were mixed in Europe.
The rand was mostly muted on the day, trading near R19/$, with focus on the Brics summit which takes place from August 21 to 24 in Sandton. However, the event is not expected to have a major effect on the markets.
“The rand remained at very weak levels as the domestic currency continues to be negatively impacted by the risk-averse global market, particularly concerns over China’s growth prospects,” said Investec chief economist Annabel Bishop.
At 5.51pm, the rand was little changed at R19.0013/$, while it had weakened 0.16% to R20.6801/€ and 0.18% to R24.1893/£. The euro was 0.12% weaker at $1.0883.
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