The JSE touched another record high on Thursday, but reversed the session’s gains as investors awaited US Federal Reserve chair Jerome Powell’s speech on Friday.
The all share reached a record high of 84,733 points as markets welcomed minutes from the US federal open market committee (FOMC) July meeting.
The minutes released on Wednesday evening showed that an interest rate cut at the Fed’s September policy meeting was becoming more probable, with most participants advocating for a loosening of monetary policy if data continued to come in as projected.
However, sentiment in the market took a negative turn after mixed economic data in the US.
This development reflects the ongoing impact of high interest rates on the US economy, which has been slowing down in its efforts to control inflation.
A jobless claims report released earlier on Thursday showed a slight increase in the number of US workers applying for unemployment benefits last week, surpassing expectations. Though the overall number remains relatively low from a historical perspective, this uptick could signal a continued cooling of the jobs market.
Meanwhile, a second report showed growth in the service sector is accelerating. However, the manufacturing sector, which has been severely affected by high interest rates, appears to be contracting at a faster rate.
“The data [released on Thursday] on mixed economic indicators suggest a complex landscape, contributing to market volatility and investor concerns,” said SPI Asset Management partner Stephen Innes.
“As the economy navigates the challenges of high interest rates and inflation, investors will closely monitor future developments for signs of stability or further slowdown.”
The JSE all share lost 0.48% to 83,620 points and the top 40 was down 0.63%. Industrials added 0.57% and SA listed property 0.48%. Precious metals fell 3.58%, resources 2.02%, banks 1.51%, financials 1.1%, industrial metals 0.96% and food producers 0.16%.
At 6.20pm, the Dow Jones industrial average was 0.18% weaker at 40,816 points, while markets in Europe were mixed.
Investors are awaiting Powell’s speech at the Jackson Hole economic symposium in Wyoming on Friday.
“Market participants and economists eagerly await Powell’s address, hoping for insight into the Fed’s future plans regarding interest rate cuts,” said Innes.
“Specifically, they seek guidance on the potential magnitude and timeline of rate reductions aimed at alleviating economic pressures and supporting growth.”
At 6.46pm, the rand had weakened 0.87% to R18.0274/$, 0.51% to R20.0270/€ and 1.18% to R23.6038/£. The euro was 0.34% weaker at $1.1110.
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