Global equities have continued to rally as the US Fed showed intention of keeping policy rates low. Emerging market equities therefore lagged their developed market peers. Commodity prices continued to tick up partly due to the increase in US-China trade tensions and global easing of coronavirus restrictions, the Gold price broke through the $2000 per ounce mark while the US Dollar weakened relative to other major currencies. The S&P 500 had one of the worst falls in modern history at the beginning of the year. It crashed over 33% between February and March, but on 18 August the S&P 500 reached an all-time high by passing its peak in February. Tech companies have thrived during the lockdown over the past few months and has added 10.23% to the value of the S&P 500. The South African government eased the national lockdown regulations and moved to level 2 restrictions, this following the latest coronavirus infection and death rates showing a slowdown which would indicate that we have passed the peak of infections in South Africa. The sale of Alcohol and Tobacco products was permitted again, and restaurants and taverns were again permitted to sell alcohol to patrons, much to the relief of the industry. President Cyril Ramaphosa and his top 6 cabinet members vowed that all the members facing charges for serious crimes and corruption charges are to leave the party with immediate effect.
The JSE All Share Index (down 0.3%) delivered flat performance in August as it seems the recovery has reached its conclusion, the index is also flat (down 0.9%) year to date. Resource stocks (up 0.7%) were the best performing equity sector once again, followed closely by Industrials (up 0.5%) with slightly positive performance. Financials were the worst performing (down 4.2%) equity category. Small-cap shares (up 1.4%) delivered slightly positive performance in August while Mid-cap shares (down 1.7%) and Large-cap (down 0.1%) delivered slightly negative returns. The MSCI World Index ended the month up 6.2% in US Dollar terms while Emerging Market equities underperformed their Developed Market peers and ended the month up 2.2%. The South African Listed Property sector (down 8.6%) and the SA REITs sector (down 8.6%) both experienced a sharp decline in August. The Rand appreciated 0.5% against the US Dollar, while depreciating 0.6% against the Euro and 1.5% against the Pound Sterling. In August, the Oil price (up 4.6%) outperformed both the Platinum price (up 2.6%) and the Gold price (up 0.2%) in US Dollars.
