Sanlam Private Wealth Morning Digest 09 July 2020

Local Markets

Local sentiment and higher gold prices bolstered the local bourse yesterday. The JSE’s gold index, representing top five gold miners, was up 3.49%, strengthened by a robust gold market, which is seen by investors as a safe haven store of value. Banks also led gains, with the banking index up 4.21%. With COVID-19 cases rising sharply in the United States, as well as in developing economies, such as India, Brazil and South Africa, investors were wary. In fixed income, the yield on the benchmark government issue due in 2030 was down 0.5 basis point to 9.685%.

American Markets

Equity markets booked gains Wednesday, even as investors focused on the question of whether unabated increases in COVID-19 cases in a number of US states would delay economic recovery. The US reported 60,000 new coronavirus cases Tuesday, a single-day record, according to data compiled by Johns Hopkins University. The seven-day average for cases is higher than the 14-day average, an indication that the spread is intensifying. Since early May, growing optimism around the US economic restart had been driving a rotation into more cyclical stocks, mainly with an eye toward which companies could benefit from an easing of strict lockdowns: the “reopening” or “return to work” trade.