June 2024 presented diverse economic developments and market performances across various regions and asset classes. This report provides insight into the significant movements, key sectors, standout equities, and broader economic trends that shaped the financial landscape during this month.
LOCAL MARKETS
The South African equity market followed the positive trend witnessed in the United States, with the JSE All Share Index (ALSI) increasing by 4.08% and the Capped SWIX returning 4.17% in June. The Top 40 Index rose by 3.70%. The South African Listed Property Index saw a significant gain of 5.95%. The local All-Bond Index (ALBI) rose by 5.18% and inflation-linked bonds (CILI) posted 2.85%.
Exhibit 1 | Local performance (ZAR) for June 2024
Note: Data illustrated in ZAR. Source: FundFocus. Data as at 30 June 2024. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
Best performing sectors
- Financials increased by 13.25%, reflecting strong financial sector performance.
- Industrials rose by 5.10%, driven by favourable market conditions.
- Consumer staples were up by 4.60%, despite broader market volatility.
Worst performing sectors
- Technology fell by 4.08%, impacted by sector-specific challenges.
- Basic materials declined by 3.51%, facing challenges in the sector.
- Beverages dropped by 9.34%, reflecting sector-specific issues.
Best performing equities
- Capitec: +23.4%
- Discovery: +22.8%
- FirstRand: +18.3%
Worst performing equities
- Glencore: -9.2%
- AB InBev: -9.3%
- Sibanye Stillwater: -16.5%
Economic Indicators
- South Africa recorded a trade surplus of R20 billion in May, the highest in six months.
- The annual inflation rate remained at a four-month low of 5.2%.
Political Developments
June saw significant local political developments with the announcement of a new Government of National Unity (GNU) cabinet in South Africa. President Cyril Ramaphosa included 11 political parties, with Enoch Godongwana remaining as Finance Minister and DA leader John Steenhuisen becoming the new Minister of Agriculture.
The GNU aims to achieve rapid economic growth and good governance. Following the announcement, the JSE jumped 700 points (1% increase), with Redefine Properties, Motus, and Remgro leading gains. The rand also strengthened, briefly breaching R18 to the dollar.
GLOBAL MARKETS
June was characterised by varied performances in global equity markets, with the MSCI World Index falling by 0.28%. Despite these declines, the MSCI Emerging Markets Index rose by 0.41%, indicating stronger performance in developing economies. The S&P 500 showed resilience, advancing by 3.59% for the month, while the FTSE 100 and STOXX All Europe indices faced declines of 0.19% and 0.21%, respectively.
Exhibit 2 | Global performance (USD) for June 2024
Note: Data illustrated in USD. Source: FundFocus. Data as at 30 June 2024. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.
Commodities
Commodity markets exhibited mixed performance:
- Oil decreased by 1.61%, closing at $85 per barrel.
- Gold remained relatively flat, ending at $2,326.75 per ounce.
- Copper rose by 0.90%, indicating stable industrial demand.
- Platinum and Silver increased by 0.57% and 0.59%, respectively.
- Palladium jumped by 4.25%, showing a significant rebound.
- Iron Ore and Coal both saw declines, with iron ore down by 7.59% and coal by 8.18%.
United States
The United States equity market continued its upward trajectory in June, driven by substantial gains in the technology sector. The S&P 500 rose by 3.59%, bringing its year-to-date gains to 15.29%. The NASDAQ surged by 6%, reflecting the strength in large-cap technology stocks.
Key performers included Adobe Inc. (+24.9%), Carnival Corp. (+24.1%), and Autodesk Inc. (+22.7%). However, some sectors lagged, with Walgreens Boots Alliance Inc. (-25.4%) and Bath & Body Works Inc. (-24.8%) leading the decliners.
Sector Analysis
- The technology sector saw a remarkable 7.8% increase, led by strong performances from companies like Adobe and CrowdStrike Holdings Inc. (+22.2%).
- Consumer Discretionary increased by 3.9%, supported by a robust performance from Carnival Corp.
- Utilities was the worst-performing sector, declining by -5.6%.
Fixed Income
Treasury Yields decreased across most maturities, with the 5-year Treasury note experiencing the largest drop of 19 basis points. Bond funds benefitted from the lower yields, with the iShares 20+ Year Treasury Bond ETF (TLT) advancing by 1.81%.
Economic Indicators
- The United States unemployment rate rose to 4%, the highest since January 2022, while labour force participation dropped to 62.5%.
- Both new and existing home sales declined, yet the median sales price for existing homes hit a record high.
- Inflation remained within the 3-4% range, with core inflation declining for the 13th time in 14 months.
Europe
European markets had a mixed performance in June. The STOXX All Europe index decreased by -0.21%. Overall, market sentiment was dampened by economic uncertainties and sector-specific challenges.
Inflation remained a concern, impacting consumer spending and overall economic growth. The manufacturing and services sectors showed signs of a slowdown, contributing to the negative market sentiment.
United Kingdom
The United Kingdom’s FTSE 100 index declined by 0.19% in June, reflecting mixed performance across different sectors. Overall, market sentiment was influenced by economic uncertainties and inflationary pressures.
Asia
Asian markets displayed varied performance, with some regions experiencing growth while others faced declines. The Nikkei 225 index in Japan rose by 0.62%, while the CSI 300 index in China increased by 0.30%.
Economic Indicators
- China continued to struggle with economic recovery, impacting market performance. The MSCI China index fell by 0.11%.
- Japan showed signs of economic resilience, supported by strong corporate earnings and positive market sentiment.
In conclusion
June 2024 was a month of contrasts, with notable gains in certain sectors and regions offset by declines in others. The technology sector in the United States led the charge, while South African financials had a standout month.
European markets faced economic uncertainties, and Asian markets showed mixed performance with resilience in Japan and challenges in China. Commodities had a mixed performance, reflecting broader economic uncertainties.
As global markets continue to navigate complex economic landscapes, continued vigilance and strategic investment decisions will be crucial in navigating the evolving market landscape.
Source: OIG, FundFocus. Data as at 30 June 2024. Past performance is not indicative of future performance.
Source: OIG, FundFocus. Data as at 30 June 2024. Past performance is not indicative of future performance.
