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Written Version:

  • With Christmas lights already making an appearance in some stores, the end of the year is now firmly in sight. Unfortunately, global markets are not feeling festive just quite yet.
  • Locally, South Africans enjoyed the first month of Level 1 lockdown, with almost all movement and economic restrictions now lifted in SA. We can only hope that this is the first step on the long road to economic recovery.
  • Minister of Finance confirmed the grim outlook in his medium term budget speech, confirming that the economy is expected to contract by 7,8% in 2020 and that gross debt is expected to reach a staggering R5.5 trillion by the 2023/24 fiscal year. In case you are unsure, R5.5 trillion has 11 zeros.  Yes, R5,500,000,000,000!
  • Despite all the doom and gloom, the Rand had a good month, strengthening to R16.23 to the US Dollar, an improvement of just over 2,5% for the month, with the trend extending into November so far. What a pity the rest of the world is in Lockdown 2.0 and we can’t travel for the holidays!
  • The British government continues to warn of the possibility of a no-deal Brexit. So far, markets do not seem to take heed of the warning as most analysts view this as political posturing and still think (or should we say “hope”) that a deal will be reached at the last minute.  Alternatively, it is quite possible the many traders have been pricing no deal into the markets over the last couple of months and that nothing the British government does can surprise them anymore. With the last-minute drawing ever closer, we will be watching intensely.
  • As you are reading this, you are probably digesting the outcome of the US elections. Irrespective of who won, the election outcome is likely to cause significant volatility in the short term as investors and traders adjust their outlooks for economies and currencies based on the result.
  • A second, often stricter round of global lockdowns, remains a concern for global economic growth. This was apparent with markets mostly trading negative during the month.
  • Following a virus-induced slump in ad revenue, Alphabet’s share price surged at the end of October when earnings data confirmed a very strong recovery in ad sales, up just over 24% in the third quarter. Alphabet’s share price was up 14% from a year ago!
  • October index movements:
    • JSE All Share Index: -4.75%
    • S&P 500 (US): -2.77%
    • FTSE (UK): -4.92%