Global – A Dovish Fed?
Following sharp falls in December, US equities forged ahead in January, spurred on by developments at the Federal Reserve, as well as an improving outlook for global trade. While the Fed left interest rates unchanged, it indicated a far more flexible approach going forward which would be based squarely on economic momentum. This was a radical departure from the previous proposal that interest rates would need to be gradually increased. This unexpected change from previous Fed policy brought cheer to global equity markets. An additional catalyst was provided by
President Trump, who indicated that he would meet with China’s President Xi to work towards a resolution regarding the tariffs dispute.
Domestic – 2019 – A snail paced recovery
The local equity market moved in line with global markets over the month, with the FTSE/JSE All Share improving 2.8% largely driven by an improvement in financial counters. The FTSE/JSE Financial Index improved significantly by 6.0% following the previous month’s weak showing of just 0.6%. Another sector to improve was resources, with the FTSE/JSE Resources Index up 3.3%. The main drivers in this instance were gold and platinum counters, with the gold price up 3.0% and the platinum price up 3.3%.