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WHAT HAPPENED OVERNIGHT IN THE US:
· US markets rallied to within a whisker of record - on cheap money tailwind - before losing steam in last hour.
· ECB QE surprise a boost for momentum stocks - under siege earlier in the week. Value breather (still week-to-date +4%).
· Fed fund futures priced tighter for a cut next week Weds, helping anchor recent steepening in the yield curve.
· But China story showed signs of fatigue. Trump reportedly considering “interim” deal, later denied by White House in CNBC story. Caterpillar -1%, booked first drop in 4. Apple -0.2%, faded from up 1%.
SOUTH AFRICAN NEWS:
· From SA close yday, S&P +0.1%, gold -$15 ($1497), plat -$6 ($949), pall -$6 ($1611), copper +1.2% ($2.65/lb), Brent oil +1.4% ($60.40), ZCE thermal coal -0.4%, BHP -0.2%, USDZAR unch (14.59), Tencent +0.2% (HKD 350).
• Quiet day for local diary but things hot up next week with SARB rate decision and SAFEX expiry on Thurs 19 Sept. On Monday Prosus will land in CSDPs but also gets MSCI upweight at the close – just as we learn the result of Prosus election (NPN to confirm exact holding 73%-83%). On Friday we get JSE quarterly review with IMP/SGL/GFI in to Swixx (APN/SAP/LHC out) but with one more stock (expected) to make way for Prosus it’s currently looking like EXX will also be fall guy. Either way, PRX also likely to get a FF/SSIS downweight in that rebal (we expect 8% to 3% in DTOP/Swixx, 9% to 3% in Top40 (vs addition/upweight in DCAP)).
• PRX discount 11.1% to listed SOTP (21.2% vs total ie including unlisted). NPN discount 29% to listed SOTP (37.2% vs total).
TODAYS KEY DATA POINTS:
· 2.30pm: US Aug Retail Sales
· 4pm: US Sept Uni of Mich Consumer Confidence
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