In today's Taking Stock, the S&P 500 and Nasdaq hit fresh record highs, lifted by technology gains and the announcement of a trade deal between the U.S. and Vietnam, easing near-term tariff concerns.
Local Market Commentary
The JSE All Share and Top 40 indices declined modestly on Wednesday, with inflation expectations easing notably across 2025–2027, according to the SARB's latest quarterly survey. Forecasts for 2025 inflation dropped below 4% for the first time in over four years, reinforcing market expectations for further rate cuts following May’s 25bps reduction. Despite subdued Q1 GDP growth of just 0.1%—dragged down by weak mining and manufacturing output—the inflation downtrend may give the SARB room to support the economy. Meanwhile, the re-emergence of avian flu cases has raised concerns about South Africa's poultry recovery and vaccine rollout.
European Market Commentary
European equities closed slightly higher, buoyed by gains in renewables after progress on a key U.S. budget bill and optimism around potential trade developments ahead of the July 9 U.S. tariff deadline. France outperformed, rising 1%, while Spain’s unemployment fell to its lowest level since 2008 amid strong summer hiring. Ireland saw foreign multinationals pledge 10,000 new jobs in H1 despite global trade headwinds, although its services PMI dropped to a 17-month low, signalling a broad deceleration in economic momentum.
US Market Commentary
The S&P 500 and Nasdaq hit fresh record highs, lifted by technology gains and the announcement of a trade deal between the U.S. and Vietnam, easing near-term tariff concerns. The Dow ended slightly lower but remains near its all-time peak. Market focus now shifts to Thursday’s non-farm payrolls data, expected to show softer job creation and a modest uptick in unemployment. Investors continue to weigh mixed labour market signals as they anticipate the timing of potential Federal Reserve rate cuts amid broader macro uncertainty.
Asia Market Commentary
Asian equities edged up ahead of key U.S. payroll data and Congressional action on fiscal measures. In Hong Kong, retail sales rose for the first time in over a year, with tourist arrivals—particularly from mainland China—continuing to strengthen. In Japan, BOJ board member Hajime Takata signalled the need to resume rate hikes once the economic effects of U.S. tariffs are assessed, suggesting underlying confidence in achieving the Bank’s inflation target.
Currency Market Commentary
The rand weakened against the dollar ahead of SARB’s inflation survey and amid anticipation of U.S. payroll data and global trade developments. The dollar was steady following a U.S.–Vietnam trade deal that revived hopes for more agreements before the 9 July tariff deadline. Sterling stabilised after a sharp fall, as markets reacted to political uncertainty surrounding UK fiscal policy and reassurances from PM Keir Starmer backing Finance Minister Reeves after controversial welfare policy reversals.
Commodity Market Commentary
Oil prices dipped as U.S. crude inventories unexpectedly rose by 3.8 million barrels, triggering demand concerns during peak driving season. Gold weakened slightly as traders awaited U.S. jobs data to gauge the Fed’s policy direction. Argentina curtailed industrial gas supply amid record cold-weather-driven demand, while Russian LNG exports dropped 4.4% year-on-year due to sanctions impacting its Arctic LNG 2 project, underlining ongoing geopolitical constraints in energy markets.
Bytes Technology Group (BYI) -29.25%
Bytes Technology Group, a leading software, security, cloud and AI solutions provider in the UK and Ireland, issued a trading update ahead of its AGM today, noting softer early-year performance due to macroeconomic pressures and delayed corporate purchasing decisions. The Group has transitioned its corporate sales division to a more customer-segmented structure to enhance service delivery and drive sustainable annuity income, though the adjustment period has taken longer than expected. Short-term profitability has also been impacted by changes in Microsoft enterprise incentives, particularly concentrated in the first half due to key renewal cycles. Despite this, the Board expects first-half gross profit to match the prior year, with operating profit slightly lower, and sees a return to more normalised growth in the second half as recurring service revenues strengthen. The company remains focused on front-line sales investment while managing costs elsewhere, and plans to provide updated full-year guidance with its interim results in October. CEO Sam Mudd expressed confidence in the Group’s positioning, supported by strong client engagement and a healthy pipeline.
Tesla (TSLA) +4.97%
Tesla reported a 13.5% year-on-year drop in Q2 vehicle deliveries to 384,122 units, missing consensus estimates despite modest sequential growth and signs of stabilising demand in China. The company now faces a steep challenge to exceed one million deliveries in H2 to avoid a second consecutive annual sales decline, especially amid political headwinds tied to CEO Elon Musk and policy uncertainty around key EV tax credits. Shares rose 4.5% as the result outperformed worst-case forecasts, but investor caution remains elevated given delays in launching lower-priced models and intensifying competition from Chinese EV makers.
Lucid (LCID) +0.99%
Lucid saw Q2 deliveries rise 38% year-on-year to 3,309 vehicles, falling short of analyst expectations as demand for its premium EVs remains constrained by elevated interest rates and rising material costs. Production reached 3,863 units, also below forecasts, though up sharply from a year earlier. The company maintained its annual production guidance despite inflationary pressures and tariff-related cost increases projected at 8–15%. With hopes pinned on the recently launched Gravity SUV and its forthcoming mid-size EV, Lucid’s near-term performance hinges on successful portfolio expansion and competitive pricing.
Embraer (EMBR3) -1.07%
Embraer delivered 61 aircraft in Q2 2025, marking a 30% year-on-year increase driven by a 41% surge in executive jet shipments. While commercial jet deliveries were flat at 19 units, defence aircraft deliveries rose to four from just one a year ago. The Brazilian aerospace firm reaffirmed its full-year delivery guidance, targeting up to 85 commercial and 155 executive jets. Embraer's continued delivery momentum underscores resilience in the high-margin executive segment ahead of its full Q2 earnings report due on 5 August.
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