The JSE closed slightly weaker amid mixed global peers on Monday as investors looked ahead to a week filled with monetary policy updates from major central banks, including the Federal Reserve.
The Fed’s federal open market committee (FOMC) will release a new policy statement when it concludes the two-day policy meeting on Wednesday.
The Fed is not expected to cut interest rates this week, but investors will be looking for clues as to how likely will the central bank deliver its first cut at its September meeting.
“The Fed is expected to keep rates on hold but markets are looking for a more dovish outlook going forward,” TreasuryOne currency strategist Andre Cilliers said.
The JSE all share lost 0.13% to 81,011 points - with major indices mixed, while the top 40 was down 0.23%.
Besides the policy update from the Fed, an update from the Bank of Japan (BOJ) monetary policy meeting will also be released on Wednesday, while the Bank of England will conclude its monetary policy on Thursday.
The BOJ is forecast to hike rates while markets are split as to what the BOE will do.
Investors will also watch out for corporate updates from some of the major tech companies this week including Microsoft on Tuesday, Apple and Amazon on Wednesday and Meta Platforms on Thursday.
The performance of mega tech stocks has a significant impact on Wall Street due to their massive market value, which can influence the direction of the stock markets.
Last week, underwhelming profit reports from Tesla and Alphabet raised concerns about the possibility of disappointing corporate results from other top tech stocks.
The “Magnificent Seven” - Apple, Amazon, Microsoft, Nvidia, Tesla, Alphabet and Meta, had experienced a surge in value over the past months, driven in part by enthusiasm for artificial intelligence technology. However, their momentum stalled this month as investors began to question their high valuations and explore alternative options, reported Bloomberg.
At 6pm, the Dow Jones industrial average was 0.12% firmer at 40,620 points, while markets were mixed in Europe.
Investors will get the crucial US nonfarm payrolls and unemployment numbers, due to be released on Friday. The numbers will give an indication of the strength of the labour market and if the Fed will cut rates in September.
At 6.25pm the rand had weakened 0.93% to R18.4628/$, 0.42% to R19.9661/€ and 0.8% to R23.7169/£. The euro was 0.37% weaker at $1.0815.
Cilliers said the local currency was likely to remain in the recent range of R18.00/$-R18.50/$ before this week’s central banks’ meetings and Friday’s payroll numbers.
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