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Morning Market Scoop 25 October 2018

/
Musa Makoni
Moring-market-scoop

 

Stock markets continue to plummet

Jitters are rife across most global equity markets as investors remain increasing bearish due to a number concerns ranging from trade wars, Italy’s debt, Brexit and the high probability of a rate hike from the US Fed.

Is Palladium the new safe haven?

Read our scoop and find out...

 

Stock-markets-continue-to-plummet

 

Is there an end to this downtrend?

What’s the scoop? Global stocks can't find a bottom

Jitters are rife across most global equity markets as investors remain increasing bearish due to a number concerns ranging from trade wars, Italy’s debt, Brexit and the high probability of a rate hike from the US Fed. The JSE has not been spared with the JSE All-Share index falling over 10% over the past month.

The big picture JSE equities are at their cheapest from a price-to-earnings comparison relative to stocks in emerging markets, therefore this could present a good buying opportunity for investors with a longer-term view.

What does all this mean for me?

  • In the short-term you can profit from the downtrend by taking a short position on the ALSI futures contract while waiting for a good opportunity to add stocks onto your longer term portfolio.

Palladium-Price-movement-safe-haven

 

Record highs for Palladium!

What’s the scoop? Is Palladium the new safe haven?

Palladium, which is a major component used to make catalytic converters in vehicles soared to record highs this week fuelled by concerns of potential shortages. The metal has been in a downtrend for most of this year similar to most of the metal commodities.

  • Tensions between Russia and the USA have aided in increasing the demand for the metal, while the stimulus packages in China have also played a factor.

The big picture  PGM metal producers should be favourable in the short-term for traders and if the higher prices remain there is potential for increased revenues when the miners report earnings for this quarter.

What does all this mean for me?

  • All things being equal we could see a potential resurgence in PGM metal producers in the next earnings reporting season. Perhaps a short-term long position might be warranted with caution, as the trend in metal prices can change drastically within a short time.

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