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Another welcome respite from S&P rating decision, but risk of multiple downgrades still hovers

05 June 2017

S&P’s decision to keep South Africa’s local currency rating at investment grade should allow the country some room to try to stabilise its rating, currently hovering just above sub-investment grade. Stabilising the rating is no small challenge, amidst elevated political and policy uncertainty and acute pressure on the fiscus, as tax revenue growth remains severely constrained by the lack of economic growth.

One scandal too many

23 May 2017

For US equity investors, the latest controversy around President Donald Trump was one too many. After the US election, equities and the US dollar rallied on the expectation that Trump would deliver business-friendly tax cuts, regulatory reform and infrastructure spending. The S&P500 and Nasdaq indices roared ahead to new record highs a few days ago. Moreover, an eerie calm had descended on markets, with actual and implied volatility declining to multi-year lows. The CBOE Volatility Index (VIX), also known as Wall Street’s fear gauge, fell to a level last seen in 1993. Volatility has also been subdued on bond and currency markets.

Band-Aids and credit downgrades

16 May 2017

Often in life, the anticipation of an event is worse than the actual event itself. If you have ever gone for an injection, you may have experienced some anxiety, fear or even a general feeling of unrest.

Trump dumps market bumps

16 May 2017

Surprise firings of key officials are not unique to our own head of state. American President Donald Trump axed the head of the FBI, begging the question whether it relates to the ongoing investigation of the Trump election campaign’s links to Russia. For investors, the pertinent question is how markets are impacted. The answer is that it is simply too soon to tell. Markets rallied strongly after Trump won the election in November, on the assumption that his policies will favour businesses by cutting tax rates, reducing regulation and spending on infrastructure. However, this ‘Trump bump’ had already seemingly run out steam as it became apparent that implementing his agenda faces many hurdles, not least of which are the constant self-created controversies. This is just the latest in a series.

quick poll

Question

If you had to choose one approach to protect your hard-earned investment cash from today’s market madness, which would it be?

Answer