Unum Market Commentary: Equities Lower As Fed Hikes; Dollar Gain

On Wednesday all eyes were on the US Federal Reserve as market participants awaited the commentary following the near-certain 25 basis point hike which saw the lending rate increase from 2.00% to 2.25%. General commentary from the committee highlighted the most known factors including: (1) the health of the US economy (2) low unemployment (3) rising wages and (4) low and stable inflation. Also stated by Chairman Powell was that a gradual return to policy normalization will help to sustain the strong economy for the long-run benefit of all Americans. The initial reaction saw the US Dollar weaken, which saw a print of 1.1797 versus the Euro which was followed by strength that saw a print below 1.1750 post the US market close. Versus the South African Rand, the greenback tested a low of 14.08, settling to 14.15 by 6:30am this morning. In the equities space, US stocks finished lower, with the Dow Jones, S&P500 and Nasdaq 100 losing 0.40%, 0.33% and 0.21% respectively while the Russell 2000, the index which possibly better reflects the domestic US economy, took the biggest hit, losing 1.02% for the session. This morning Asian stocks are tracking Wall Street's losses with the Nikkei 225 down by 0.37%, the Hang Seng lower by 0.37% while the Shanghai Composite is down by 0.39%.

GDP Projected Changes as per the FOMC



JSE Major Sectors

Resources 10 -1.89%
Industrial 25 -0.17%
Financial 15 -0.01%

Below is a great chart from Statista which highlighted where tourists have been spending the most amount of money. At the top of the list was the US which received 75m inbound arrivals and where inbound expenditure was around $210bn.



The Walt Disney Company - A Beneficiary of Tourism - View by Lester Davids

One share that may be a beneficiary of increased tourist travel to and spending in the United States is the Walt Disney Company with their world-class theme-park entertainment which has a long and profitable operating history. The share has been a laggard over the last few years as it's sports network, ESPN, has lost subscribers. We will however in future see the company launch it's own streaming service which could benefit the share. The earnings multiple (PE) is undemanding and technically (as per the weekly chart) we are seeing a breakout. Will this be a change in long term trend?

Disney Weekly Chart



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In currencies, the South African Rand trades as follows:

USDZAR +0.15% to 14.15
GBPZAR +0.01% to 18.61
EURZAR +0.23% to 16.63

Gold trades at $1202
Platinum at $830
Brent Crude Oil at $81.56

International Markets

This morning, Asian equities are as follows:

Nikkei 225 (-0.37%)
Hang Seng (-0.37%)
Shanghai Composite (-0.39%)

Latam Markets closed as follows:

Merval 25 (-0.32%)
Bovespa (+0.03%)
INMEX (-0.11%)
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Company News

Capitec Bank Holdings Limited - Unaudited Financial Results For The 6 Months Ended 31 August 2018

Salient Features

Unaudited financial results for the 6 months ended 31 August 2018

+20% to 2 128 cents Headline earnings per share
+20% to R2.461 billion Headline earnings
+20% to 630 cents Interim dividend per share
27% Return on equity
10.5m Active clients
25% Transaction volume growth

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Aus miners:
BHP Billiton (+0.20%)
Rio Tinto (-0.67%)
S32 (+0.00%)

FANGs
Facebook (+1.24%)
Amazon (+0.02%)
Netflix (+2.29%)
Google (+0.01%)

FTSE Miners:
Anglo American plc (-1.57%)
BHP Billiton plc (-2.00%)
Glencore plc (-1.02%)

Alibaba Holdings (+0.70%)
Tencent Holdings (+2.12%)

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The Unum Capital Trading Desk

Feel free to contact the Unum trading desk for any trading related queries: 011 384 2929