Fed holds rates steady

30/07/2020 The JSE firmed for a third successive day closing up 0.39% with gains in SA Inc names and Sasol making up for losses in other sectors, such as miners, which fared the worst on the day. Sasol jumped the most in seven weeks up 8.65% after the group announced it has agreed to sell 16 air-separation units at its Secunda operation for R8.5bn in its drive to reduce debt. Standard Bank led the gains in the local names, up the most in three weeks, despite announcing that its interim profits in the six months to end-June could halve. Looking ahead we could be for a slightly firmer open with IG Markets calling us up 65 points, and Tencent up 0.84%

The FED kept interest rates unchanged as expected and in the statement Fed Chairman Jerome Powell told reporters the Fed will maintain its historic stimulus measures until they are confident the economy has “weathered” the crisis.

• RMB CEO Implores South African Leaders to Heed Mboweni Warnings.
• ANH 2Q and1H 2020 numbers, 2Q adjusted EPS 46c vs. $1.17 y/y, estimate 26c (range 16c to 31c)
• Raubex trading statement, HEPS for 6 mnths to 31 Aug to be at least 80% lower than previous period.

Stocks in the US rose overnight as tech shares led the way and the Federal Reserve kept interest rates unchanged. The Dow gained 160.29 points, the S&P 500 climbed 1.3% and the Nasdaq advanced 1.4% . Facebook and Amazon each rose more than 1% along with Apple and Alphabet. Those gains came as each company’s CEO testified in front of U.S. lawmakers following a yearlong probe into their anti-competitive practices. Investors looked for insights on how Big Tech is handling antitrust challenges from regulators with the authority to break them up. Shares of Big Tech are among the best performers this year. Facebook and Alphabet are both up more than 13% year to date, Amazon has skyrocketed 64.2% over that time and Apple is up 29.5%.
The busiest week of the earnings season continued, with General Electric and Boeing releasing their latest quarterly figures. GE reported a stronger-than-forecast revenue along with a wider-than-expected loss. Shares of the industrial giant fell 4.4%. Boeing also posted a wider-than-expected loss and its stock slid 3%. Later today 14.30 local time, we have 2Q GDP, survey is -34.5% the previous number was – 5.0%. Initial jobless claims, survey 14.4mln, previous 14.16mln and Continuing claims to stay pretty much in-line at 16.2mln.
The pan-European Stoxx 600 ended just below the flatline, with sectors and major bourses pointing in opposite directions. CAC + 0.60%, FTSE – 0.02%, DAX – 0.10%. Deutsche Bank on Wednesday reported a smaller-than-expected net loss attributable to shareholders of 77 million euros ($90.3 million) for the second quarter of 2020, while increasing its credit loss provisions to reflect the expected impact of the coronavirus pandemic. Germany’s largest lender upgraded its 2020 revenue guidance and said its transformation efforts are well on track. However, the bank’s stock fell 2.5%. Barclays posted a net income of £695 million ($765.64 million) for the first half of 2020, while increasing its coronavirus-related loan loss provisions. The British lender’s shares slid 6%.
Asain markets are a touch firmer after the Fed decision, mainland China trades a touch softer as does the Nikkei with the rest of the region in the green. Japanese retail sales for June declined 1.2% as compared to a year ago, that compared against a median market forecast for a 6.5% year-on-year decline, according to Reuters. Hong Kong’s Hang Seng index jumped 1.05%, 700HK + 0.84%, in Australia, the S&P/ASX 200 gained 0.67%.
Gold has drifted off its highs after the Fed announcement, down $ 11.64 at $1959, Palladium continues lower trading at $ 2145 some 8.5% lower from Tuesdays highs.
Oil prices have dipped a tad as a surge of coronavirus infections around the globe raised fears a rebound in fuel demand would stutter just as major oil producers are set to raise output in August. The potential hit to the demand rebound comes just as OPEC+ are set to step up output in August, adding about 1.5 million barrels per day to global supply. Brent $ 43.68, WTI $ 41.22.