Caps have increased across the board, seeing an increase in Bond Yields. The longer term Standard Bank PII and PII Resi, offers investors an attractive investment strategy, where capital growth can be doubled by taking an element of risk at 90% or 95% protection. The longer term Standard Bank Capital Accumulator is our investment of choice offering a potential 46% return if the market remains flat or higher.
Investor sentiment got a boost Friday as the US Labour Department said the economy added 204 000 Jobs in October, doubled what analyst forecast. The upbeat jobs growth, despite a 16-day partial federal government shutdown, suggested the world’s largest economy could be in better shape than previously believed. That hiked speculation the Federal Reserve would start cutting back on its $85bn a month bond buying plan by year’s end, a move that would tend to boost the dollar. The Fed has said any draw down hinged on signs of a firm recovery.
Strong Chinese industrial production and export data has helped lift market sentiment, but the euro remained under pressure as looming deflation fears in the euro zone saw the ECB cut rates to a record low 0.25% last week. A downgrade of France’s credit rating also heaped pressure on the unit while an expected tepid result for euro zone GDP this week “will add more weight to the argument for further policy actions”, Credit Agricole said.
The rand held steady against the dollar early Monday, finding a stable footing after strong US jobs data knocked emerging market assets at the end of last week. Local assets are also under pressure from mining labour unrest, one of the main domestic reasons behind the rand’s 22% drop against the dollar this year.
With respect to local data, this week sees the release of YoY and MoM Retail Sales figures on Wednesday. Consensus forecast 2.4% and 0.40% respectively. On the US data front, this week sees the release of Initial jobless claims and Trade balance figures on Thursday and on Friday Import Price Index MoM, survey (-0.50%).
We also have UK data releases this week, look out for CPI on Tuesday and Jobless Claims (-30.0k survey) and Unemployment rate (7.70% survey) on Wednesday.
Strategic Wealth Solutions is the official distributor of Standard Bank Investment Products to Independent Financial Advisors.
*article compliments of Standard Bank CIB