China’s Retail Sales Slows, Economic Activity Cools In August

15/09/2021 Equities markets in Asia-pacific fell on Wednesday as weak Chinese economic data kept investors worried about slowing economic growth globally over a still-dominant pandemic and tapering of central banks’ stimulus. Retail sales grew at the slowest pace since August 2020 (2.5% actual) and missed analysts’ expectations (survey 7%), while industrial output also rose at a weaker pace from July (5.3% vs 5.8% consensus) , underscoring recent signs of slackening economic momentum, and adding to expectations Beijing will offer more stimulus over coming months. MSCI’s broadest index of Asia-Pacific shares ex. Japan fell 0.42%, having dropped 0.82% earlier, extending earlier losses after the release of the Chinese data. Shares retreated in Japan and Hong Kong and fluctuated in China. Tencent 2.83% below the watermark. The 10-year U.S. Treasury yield held a fall below 1.30%. U.S. inflation was less than forecast in August, leaving the argument about whether prices pressures are transitory unresolved.

OIL: prices climbed after a U.S. industry report showed a decline in inventories of crude and gasoline, signalling a tightening market. Brent crude oil rose 43 cents, or 0.58%, to $74.03 at the hour, while U.S. West Texas Intermediate crude climbed 41 cents, or 0.51%, to $70.88 a barrel.

GOLD: the bullion edged down 0.07% to $1,803.41 after hitting a one-week peak of $1,808.50 on Tuesday. The dollar, which usually moves inversely to gold, inched up on Wednesday.

PALLADIUM: Prices have lost about a fifth of their value from the end of August amid waning demand for the metal used in catalytic converters. On Tuesday, at some stage, spot prices dipped on the downside almost 8%. The metal remains steady below $2,000 around $1,984 levels.

Here are some events to watch this week:
• Quadruple witching day for U.S. markets, Friday

Local Market
JSE lost 0.54% to 64,300 points and the Top-40 slipped 0.65% on Tuesday. The local market took cue from Hong Kong Shanghai, with gains in banks and financials offset by miners and industrials. The rand weakened the most in more than three weeks as investors mulled over slightly lower-than-expected US inflation data. U.S. CPI rose 5.3% in the year ended in August, slightly below the 5.4% increase in June and July. The rand weakened the most late afternoon as investors mulled over slightly lower-than-expected US inflation data; the local currency retreated 1.25%, drifting from R14.16/$ levels to currently R14.35/$. Industrial metals fell 2.08%, resources 1.99% and precious metals 1.54%. Financials rose 1.45% and banks 1.31%. Top-40 futures remain flat, -26 points, on IG markets.

Minister of Public Works and Infrastructure Patricia De Lille and other government officials brief lawmakers in the National Council of Provinces on infrastructure development, 10H00 local time.

NEWS:
• Billionaire Motsepe’s African Rainbow Eyes Fintech Investments
• Petra Diamonds Maintains 2022 Production 3.3M to 3.6M Carats
• Steinhoff Sells Down Pepkor Stake to Help Pay Creditors
• Plan to Produce Sputnik Shot in S. Africa on Hold, BD Says
• South Africa’s Green Energy Push Hinges on $28 Billion Debt Fix
EQUITY PREVIEW:
• South Africa’s Attacq Climbs After Full Year Earnings Recover
• Discovery up as Sentiment Boost Lifts S. African Banks, Insurers
• Luxury Stocks Slump on China Covid-19, Regulatory Worries
• Pepkor Drops as South Africa’s Steinhoff Sells Its Shares
• Clicks Sees FY Group Turnover From Continuing Ops Rising 10.2%
MEDIA SUMMARIES:
• TechCentral: MTN launches phone-based share trading service ahead of Uganda listing
• Daily Maverick: Treasury launches online portal for riot claims
• Business Day.za: Eskom burning through diesel after Kendal outage
• Business Day.za: SA medicines regulator accused of blocking Sputnik vaccine
EARNINGS:
• Epp NV (EPP LX)
• Growthpoint Properties Ltd. (GRT SJ)
• Pan African Resources Plc (PAF LN)
EX DIVIDENDS:
• ARB SJ, ABG SJ, AIP SJ, ADH SJ, ITE SJ, KAP SJ, MSP, NED SJ, OMU SJ, RES SJ, SBP SJ, SSW SJ, SBK SJ, WHL SJ
ECONOMIC DATA:
• 1pm: July South Africa Retail Sales Co, est. -2.7%, prior 0.6%
• 1pm: July Retail Sales Constant YoY, est. 3.3%, prior 10.4%
GOVERNMENT:
• 3pm: Ministers in the peace and security cluster of departments answer lawmaker’s questions in the National Assembly
CORPORATE EVENTS:
• Earnings Calls: EPP LX, PAF LN

EU/UK/US
Markets in the continent ended mixed on Tuesday; with miners, banks and luxury stocks leading declines as U.S. inflation data provided some respite for the Federal Reserve today. August inflation falling to the joint lowest level this year. What remains the question is: does the decline in both core and headline inflation marks the beginning of the end for ‘transitory’ above-target pricing as alluded to by the Fed? Should the Federal Reserve continue tapering or not? The benchmark Stoxx Europe 600 index drifted lower by 0.01%, while Germany’s DAX was 0.14% higher, France’s CAC-40 on the other hand was down 0.36%, alongside London’s FTSE100 sliding 0.49%. Luxury stocks Kering, LVMH and Richemont all retreated amid concerns about rising Covid cases in China. European futures remain steady in positive territory.

Wall Street closed yesterday’s session in the red after inflation numbers came in softer than expected, with analysts noting that the economic data likely won’t change the Federal Reserve’s tapering timeline. At the close, the Dow was down 0.84%, while the S&P 500 was 0.57% softer and the Nasdaq saw out the session 0.45% weaker. Apple stock closed lower after the tech giant’s virtual event saw it unveil new versions of the iPhone, iPad and Apple Watch. U.S contracts firmly in the green this morning: Dow futures up 0.20%, S&P500 firm 0.18%, alongside Nasdqa 0.17% in the green

In the Capital: House Democrats proposed new tax hikes to cover Joe Biden’s $3.5trn spending package, with a summary from house committees showing that the plan called for top corporate and individual tax rates of 26.5% and 39.6%, respectively.

ASIA
Japan’s Nikkei retreated on Wednesday from three-decade peaks hit on Tuesday, as investors took profits after a strong rally over the last two weeks on hopes of a new government and a fresh economic stimulus. The Nikkei average dropped 0.45% .
Australian shares lower on Wednesday dragged by losses in coal and iron ore miners due to softer prices of underlying commodities. Australia’s S&P/ASX200 on the backfoot 0.16%, with materials falling 1.35%. Hong Kong’s Hang Seng retreated 0.95% and CSI300 0.35% on China’s lower than expected retail sales data