Mastercard lifts 3 percent on strong Q2, easing spending fears with travel boom and upbeat outlook

South Africa

Yesterday, the Top 40 index lost 0.89% to reach 90,781.4 points, while the All Share index shed 0.8% to settle the day at 98,519.5 points. The local central bank lowered its key rate by 25bps to 7.00%, in line with expectations. Governor Kganyago confirmed future policy would use a 3% inflation anchor, even though the finance minister has yet to approve a formal change to the target. The move, supported unanimously by the Monetary Policy Committee, has bolstered the rand and lowered long-term borrowing costs. Separately, South Africa is preparing a last-minute trade offer under U.S. pressure, hoping to avoid a 30% tariff due to take effect imminently.

Europe

European equities declined, with the STOXX 600 falling 0.75%, led by sharp losses in consumer and auto sectors. Ferrari tumbled nearly 12% after disappointing earnings, dragging the auto index down 4%. Beverage makers also slumped as new U.S. tariffs hit sentiment. German inflation eased to 1.8% year-on-year, reinforcing expectations of slowing price pressures. Meanwhile, rising short-term German yields reflected investor scepticism over further ECB rate cuts this year. The earnings season is highlighting tariff-related risks, and Italian equities underperformed with a 1.5% drop on the day.

United States

Wall Street ended lower despite an early rally, as investors digested mixed earnings and economic signals. Microsoft briefly crossed a $4 trillion market cap on strong results, while Amazon fell in after-hours trading. Around 81% of S&P 500 companies reporting so far have beaten estimates, above the recent quarterly average. Economic data showed rising inflation in June, driven partly by tariffs, and steady jobless claims. Investors now await Friday’s payrolls report and final decisions on additional U.S. tariffs. Recent market gains follow a rebound from April’s tariff-driven correction, as trade agreements have been struck with key partners.

Asia

Asian markets declined after the U.S. imposed sweeping tariffs on dozens of trade partners, including India, Taiwan, Thailand and South Korea. While South Korea's exports rose for a second month in July due to strong chip demand and front-loading ahead of tariffs, factory activity continued to contract. The manufacturing PMI fell to 48.0, indicating ongoing weakness. Japan’s PMI also dropped below 50, signalling renewed contraction after a brief stabilisation. Investors remained cautious ahead of U.S. jobs data, with sentiment weighed by fears of further protectionist measures impacting regional exports and supply chains.

Currencies

The rand strengthened on expectations of a lower inflation anchor from the South African Reserve Bank, while emerging market currencies broadly saw mixed performance amid tariff concerns. The euro softened slightly as German inflation surprised to the downside and ECB rate cut expectations were pared back. The U.S. dollar held firm, supported by rising inflation data and anticipation of the non-farm payrolls report. The yen strengthened modestly, reflecting safe-haven demand amid escalating trade tensions and weaker regional data out of Asia.

Commodities

Oil prices edged higher amid geopolitical tensions in the Middle East and persistent supply discipline from key OPEC+ producers, with U.S. inventory draws adding support. However, upside remained limited by concerns around global demand resilience, particularly in OECD economies. Gold was broadly steady, as conflicting signals from U.S. inflation data and interest rate expectations kept positioning balanced. Investor interest remained underpinned by geopolitical uncertainty and central bank purchases. Base metals were mixed: copper gained on restocking in China and supply tightness, while aluminium tracked energy market dynamics. Iron ore firmed as Chinese steel output showed signs of stabilisation.

British American Tobacco Plc (BTI) +1.91%

BAT reported H1 results slightly ahead of expectations and reaffirmed its full-year guidance, supported by a return to growth in the U.S. and continued momentum in its Velo brand. Group revenue fell 2.2% on FX headwinds but rose 1.8% at constant rates. New Category revenues grew 2.4% at constant FX, with smokeless now accounting for 18.2% of Group revenue. Operating profit rose 19.1%, partly due to favourable adjustments to Canadian provisions. The company increased its 2025 buy-back by £200m to £1.1bn. Management remains confident in delivering mid-term growth targets in 2026, underpinned by improved capital flexibility and disciplined investment.

Anglo American Plc (AGL) -3.58%

Anglo American reported H1 underlying EBITDA of $3.0bn from continuing operations, with strong margins in copper (48%) and premium iron ore (44%) offsetting weakness in rough diamond trading. The group is progressing its portfolio simplification strategy, having completed the Valterra Platinum demerger and agreed sales of steelmaking coal and nickel, with De Beers in process. Cost savings of $1.3bn were achieved year-to-date, on track to meet the $1.8bn full-year target. Net debt stood at $10.8bn, ahead of divestment proceeds. An interim dividend of $0.07 per share was declared, reflecting earnings pressure from discontinued operations and limited contribution from De Beers.

Woolworths Holdings Limited (WHL) +0.62%

Woolworths reported 6.1% turnover growth for the 52-week period, with strong H2 momentum across key segments despite global macro pressures. In South Africa, Food sales rose 11.0%, supported by volume gains, innovation, and 32.9% online growth. Fashion, Beauty and Home improved in H2, with Beauty up 14.7% and FBH online sales up 22.8%. Woolworths Financial Services reduced impairments to 6.1%, reflecting credit discipline. However, Country Road Group saw sales fall 5.4% amid restructuring and weak Australian demand. A R917m impairment on CRG brands weighed on earnings, partially offset by a R792m profit from the disposal of a flagship Australian property.

Anheuser-Busch InBev SA (ANH) -10.70%

AB InBev delivered a 6.5% increase in Q2 normalised EBITDA to $5.3bn, with 116bps margin expansion, despite a 1.9% decline in volumes. Revenue grew 3.0% in Q2 and 2.3% in H1 on a constant currency basis, supported by a 5.6% uplift in megabrand sales, led by Corona and a 33% rise in no-alcohol beer. FX headwinds weighed on reported revenue, down 2.1% in Q2. Underlying EPS rose 8.7% to $0.98, up 17.4% at constant FX. Digital BEES Marketplace GMV surged 63% to $785m. Management continues to focus on pre

ArcelorMittal South Africa Limited (ACL) -5.56%

ArcelorMittal SA posted a headline loss of R1.014bn for H1 2025, narrowing slightly year-on-year. EBITDA loss widened to R394m, despite a 5% rise in crude steel production and a 5% cut in fixed costs. Sales volumes declined 11% and realised prices fell 7%, reflecting ongoing pressure in global and domestic steel markets. The IDC’s R1.075bn funding neutralised losses in the Longs Business, with deferred income of R842m still allocated. Net borrowings declined to R4.62bn. While awaiting the IDC’s due diligence outcome, the group maintains the scheduled wind-down of its Longs division by end-September absent a sustainable solution.

Mastercard Inc. (MA) +1.32%

Mastercard eased concerns over consumer spending by delivering stronger-than-expected Q2 results, lifting shares nearly 3%. Adjusted EPS of $4.15 beat estimates, supported by a 17% rise in revenue and 9% growth in gross dollar volume. Cross-border volumes surged 15%, signalling robust travel and leisure demand despite global trade tensions. Management struck a confident tone, citing resilient consumption driven by low unemployment and real wage growth. While analysts warn of potential pullbacks in discretionary spending amid inflation and geopolitical risks, Mastercard reiterated a positive outlook, closing a strong quarter for the payments sector.

CVS Health Corporation (CVS) -0.32%

CVS raised its full-year profit guidance following a solid Q2 beat, helped by disciplined cost control in its Aetna insurance business. Adjusted EPS came in at $1.81, topping forecasts by 35 cents. Aetna’s medical loss ratio fell below expectations, while health services revenue rose 10.2% and retail pharmacy sales climbed 12.5% amid higher prescription volumes. CEO David Joyner noted no surprises this quarter, following prior volatility in Medicare Advantage claims. The firm now sees 2025 EPS between $6.30 and $6.40, exceeding consensus at the low end. The results reflect stabilisation across business lines after recent operational challenges.

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