pixel

URGENT ALERT: Please beware of fraudulent WhatsApp groups and other groups across Social Media pretending to be affiliated with Anchor and Anchor staff members. Do not engage with these malicious and fraudulent groups in any way. Please direct all queries to invest@anchorcapital.co.za.

January global commentary: Markets record the first positive start to a year since 2019

Our Global Economy Comments For January

2023 started on a positive note for developed market (DM) stocks (MSCI World +7.1% MoM), the first positive start to the year since 2019. The laggards of 2022 were the biggest winners at the beginning of this year, with tech shares bouncing back strongly from a torrid 2022 (Nasdaq 100 Index +10.7% MoM after falling 32.4% YoY in 2022), particularly some of the mega-cap tech shares (NYSE FANG+ Index +18.7% MoM after falling 40% YoY in 2022). Tesla (+41% MoM), Meta (+24% MoM) and Amazon (+23% MoM) led the way among the tech mega-caps, though all three remain well below the market values they carried at the start of 2022. S&P 500 companies began reporting 4Q22 earnings in January, with c. 180 companies having released 4Q22 earnings by the end of January. Those companies that have reported earnings thus far saw aggregate earnings flat relative to 4Q21. Still, that result was flattered by the exceptional profits currently being earned by energy companies, with the other sectors experiencing a slight YoY decline in aggregate earnings, albeit at a level that was ahead of expectations.

Emerging market (EM) stocks outperformed their DM counterparts (MSCI EM +7.9% MoM) for the third consecutive month. This was primarily due to Chinese stocks, which continue to benefit from optimism around the prospects for the world’s second-largest economy as it sees economic activity normalise off a low base as the country emerges from its zero-COVID restrictions. As a result, foreign-listed Chinese stocks were amongst the biggest EM winners at the start of the year (the Nasdaq Golden Dragon Index of US-listed Chinese stocks was up 18% MoM in January).

The latest US inflation data (for December) was in line with expectations (6.5% YoY) as inflation continued to fall from the June 2022 peak (9% YoY), encouraging bond investors that are increasingly positioning for the US Federal Reserve (Fed) to begin cutting rates in 2H23. As a result, US 10-year government bond yields fell 0.4% during January, ending the month at 3.5% and dragging the US dollar lower as the US Dollar Index declined for the fourth consecutive month.

Brent crude oil fell slightly in January (-1.7% MoM), ending the month at US$84.5/bbl, only marginally above the US$78/bbl level it traded at the beginning of 2022 before Russia invaded Ukraine. The Bloomberg Industrial Metals Index was up 7.7% MoM on optimism around increasing economic activity in China.

At Anchor, our clients come first. Our dedicated Anchor team of investment professionals are experts in devising investment strategies and generating financial wealth for our clients by offering a broad range of local and global investment solutions and structures to build your financial portfolio. These investment solutions also include asset management, access to hedge fundspersonal share portfoliosunit trusts, and pension fund products. In addition, our skillset provides our clients with access to various local and global investment solutions. Please provide your contact details here, and one of our trusted financial advisors will contact you.

OUR LATEST NEWS AND RESEARCH

INVESTING IN YOUR NEEDS

Submit your details and we’ll give you a call back to assist and advise you on your investment.

SUBSCRIBE TO OUR NEWSLETTERS

Subscribe to our newsletters to receive regular market commentary, research and updates from the Anchor team. Select between our Individual or Financial Advisor newsletters by selecting the relevant tab below.

WEBINAR | The Navigator – Anchor’s Strategy and Asset Allocation, 2Q24

Anchor CEO and Co-CIO Peter Armitage will host the webinar, provide an introduction to current global and local market conditions and give his thoughts on offshore equities. Together with Head of Fixed Income and Co-CIO Nolan Wapenaar, Pete will also discuss Anchor’s strategy and asset allocation for 2Q24, focusing on global equities and bonds. In addition, Fund Manager Liam Hechter will provide insights into local equities, highlighting some investment ideas; Global Equities Analyst James Bennet will discuss Ferrari and give an update on Tesla, and finally, Analyst Thomas Hendricks will participate in a Q&A with Peter, explaining the 10-year US Treasury to attendees.