EB Market Update – December 2014
GLOBAL – The world’s afl oat with oil
Volatility was the hallmark of global markets during the month of December driven by continued low interest rate policies as well as a rapidly falling oil price. This was evidenced by the fluctuations in the S&P 500 which declined almost 5% mid-month to rebound strongly at month end to close just below record highs. This sudden rebound was occasioned by a statement from the Federal Reserve Open Market Committee (FOMC) that they would be “patient” with regard to the normalisation of monetary policy.
Local – Quo Vadis Eskom?
Local market sentiment has been dominated by a variety of factors but in particular has been influenced by the somewhat unexpected collapse in the oil price, the Eskom crisis and a continued slowdown in the Chinese economy. Crude oil’s fall of some 45% in 2014 has resulted in a rampant U.S. dollar and a concomitant decline in the value of ,in particular, emerging market currencies and hence a considerably weaker Rand.
