Depleted pandemic-savings signal a shift in United States consumer behaviour

According to the Federal Reserve Bank of San Francisco, United States households have exhausted their pandemic-era savings, which peaked at $2.1 trillion (by March 2024). Initially boosted by substantial government support, these savings helped maintain consumer spending amid economic challenges and rising interest rates. Recent data, however, shows a shift towards more cautious spending, with an increase in credit delinquencies among lower-income households. This suggests a potential slowdown in consumer spending, pointing to a cautious but stable economic outlook.

Amazon launches in South Africa, shakes up e-Commerce landscape

Amazon has officially launched its e-commerce platform in South Africa, offering a wide range of products and features like free initial delivery, access to 3,000 pickup points, 24/7 support, and a 30-day return policy. The launch introduces stiff competition for local retailers and Takealot.com, intensifying an already competitive market influenced by international players (like Shein and Temu). Amazon’s move could significantly impact the retail landscape, leveraging its global experience and support for independent South African sellers.

Spar Group announces secondary listing on A2X

The Spar Group, operating in 11 countries with a revenue of R149 billion in 2023, announced its secondary listing on A2X Markets, effective May 15. This move will provide easier and more cost-effective access to Spar’s shares. The company manages over 4,500 stores worldwide and offers a range of services from grocery to building supplies. Spar’s CEO Angelo Swartz emphasised the listing’s benefits, such as improved liquidity and narrower spreads. A2X CEO Kevin Brady expressed enthusiasm about listing Spar, citing its strong brand reputation in South Africa and globally.

Market movements

South African markets closed higher for the sixth consecutive day on Friday, driven by a weaker US jobs report that fuelled rate cut expectations. Notable gains were seen in sectors like platinum mining, with Anglo American Platinum, Impala Platinum, and Northam Platinum rising sharply. Food companies (RCL Foods and Tiger Brands) and property developers (such as Emira Property Fund and Growthpoint Properties) also posted strong gains. The JSE All Share index increased by 1.2%.

The week ahead

On Tuesday, the United Kingdom will release its unemployment rate, while South Africa will report on gold and mining production and its unemployment rate. Wednesday brings India’s trade balance data, South Africa’s retail sales figures, the United States’ Consumer Price Index (CPI), and Japan’s Gross Domestic Product (GDP). On Thursday, the United States will release its industrial and manufacturing production data, and China is set to publish its retail sales figures. Friday will convey the Eurozone’s Consumer Price Index (CPI) data.

The week ahead On Tuesday, the United Kingdom will release its unemployment rate, while South Africa will report on gold and mining production and its unemployment rate. Wednesday brings India's trade balance data, South Africa's retail sales figures, the United States' Consumer Price Index (CPI), and Japan's Gross Domestic Product (GDP). On Thursday, the United States will release its industrial and manufacturing production data, and China is set to publish its retail sales figures. Friday will convey the Eurozone's Consumer Price Index (CPI) data.

Source: FundFocus. Data as at 10 May 2024. Past performance is not a reliable guide to future performance. For illustrative purposes only and not indicative of any investment.