Hewlett Packard flags softer near-term revenue as AI server demand pauses but lifts full year earnings outlook

South Africa

South African equities edged lower, with the Top 40 closing at 103,172.78 points and the All Share ending at 110,924.74 points, down 0.39% and 0.37% respectively. The current account deficit narrowed to 0.7% of GDP in Q3, offering a modest macro improvement. BYD plans to expand its local EV dealership network to 60–70 sites next year as competition intensifies. Politically, Pretoria rejected US accusations of racial bias after Washington confirmed South Africa’s exclusion from the G20 under its presidency, adding diplomatic tension to an already cautious market tone.

Europe

European markets advanced, with the STOXX 600 rising 0.45% for a third consecutive session as risk appetite improved on firmer expectations of US rate cuts. Industrials and automakers led gains, while UK equities also inched higher ahead of next week’s Federal Reserve decision. Poland signalled a pause in further rate cuts after lowering its benchmark rate to 4.00% in line with forecasts. Ireland’s modified domestic demand strengthened 2.3% in Q3, driven by an 8.3% surge in investment, underscoring resilience despite broader eurozone softness and mixed corporate updates across the region.

United States

US equities closed little changed as investors balanced mixed labour-market signals with firm expectations of a Fed rate cut next week. Jobless claims fell to their lowest level in over three years, though analysts noted holiday-related distortions. Factory orders rose 0.2%, below forecasts, as tariffs weighed on manufacturing activity. Amazon’s 1.4% decline capped S&P 500 gains, while Salesforce climbed 3.7% after upgrading FY26 guidance. Meta gained 3.4% following reports of substantial Metaverse budget cuts, helping support sentiment despite the delayed release of key economic data.

Asia

Asia-Pacific markets opened weaker after a subdued US session. Shanghai debutant Moore Threads surged over 400% following its US$1.1 billion IPO, highlighting strong domestic appetite for semiconductor names. Japan’s Finance Minister reaffirmed positive coordination with the Bank of Japan, though macro data raised concerns: household spending fell 3% year-on-year in October, the steepest drop since January 2024 and well below expectations. The decline complicates the BoJ’s path toward a potential rate hike this month, as weak consumption amplifies uncertainty over Japan’s broader economic momentum and policy normalisation.

Commodities

Oil prices headed for weekly gains, supported by expectations of a Fed rate cut, rising US–Venezuela tensions and stalled peace efforts in Moscow. Markets are watching the risk of possible US military action in Venezuela, which could disrupt roughly 1.1 million barrels per day of production. Prices also firmed after diplomatic setbacks involving Russia and Ukraine. Despite a growing global supply surplus, crude remained supported as Saudi Arabia cut January Arab Light prices to five-year lows. Gold traded broadly flat, balancing firm US yields against a softer dollar ahead of key inflation data.

Currencies

The rand strengthened after South Africa returned to international markets with a new dollar-denominated eurobond issuance, its first since 2024. The US dollar lingered near a five-week low as markets priced an 87% probability of a Fed rate cut at next week’s meeting. The dollar index steadied around 99.065 after briefly touching 98.765, its weakest level since late October. Labour data showed US jobless claims falling to their lowest level in over three years, though analysts cautioned that Thanksgiving distortions likely influenced the readings, limiting broader currency-market conviction.

Vodacom Group Limited (VOD) -0.76%

Vodacom will acquire a further 20% of Safaricom for US$2.1 billion, lifting its stake to 55% and enabling full consolidation of the business. The transaction strengthens Vodacom’s strategic exposure to high-growth fintech, mobile money and regional expansion, closely aligning with its Vision 2030 objectives. Safaricom’s strong market position, exceptional cash generation and leadership in mobile payments provide a compelling investment case. The deal will be funded through new term facilities and remains subject to multiple regulatory approvals across Kenya, Ethiopia and South Africa, with completion expected in early 2026.

Hyprop Investments Limited (HYP) +0.27%

Hyprop successfully completed its accelerated bookbuild, raising R400 million after the offer was more than four times oversubscribed. The shares were issued at R54.50, representing a 3.20% premium to the 30-day VWAP and a 3.7% discount to the prior close. A total of 7,339,449 new shares will be issued under the company’s general authority to issue shares for cash. Proceeds will be applied as outlined in the initial announcement, with listing and trading of the new shares expected to commence on 11 December 2025, subject to JSE approval.

Oceana Group Limited (OCE) 2.06%

Brimstone Investment Corporation has disposed of 11,950,000 Oceana shares to Marine Edge Capital, a 51% black-owned South African consortium active in the fishing industry. The transaction reduces Brimstone’s beneficial interest in Oceana from 25.2% to 16.0%, while the Purchaser will hold 9.2%. In accordance with Section 122 of the Companies Act, Oceana will notify the Takeover Regulation Panel and report to shareholders upon receiving the required formal notices. The disposal introduces a new empowered shareholder and further diversifies Oceana’s strategic investor base.

Sappi Limited (SAP) +10.60%

Sappi and UPM have signed a non-binding Letter of Intent to combine their European graphic paper operations into a 50/50 joint venture, marking a major step in Sappi’s Thrive strategy. The transaction aims to consolidate structurally declining graphic paper markets, unlock at least €100 million in annual synergies and significantly reduce Sappi’s direct exposure to the segment. Sappi will contribute €320 million of assets and receive €139 million in cash, supporting meaningful debt reduction. Definitive agreements are expected in the first half of 2026, with completion targeted by year-end, subject to extensive regulatory and shareholder approvals.

Hewlett Packard Enterprise Company (HPE) +2.88%

HPE forecast first-quarter revenue of US$9.0–9.4 billion, below market expectations, as AI server income is set to decline temporarily due to customers shifting orders into the second half of the year. Quarterly server revenue fell 5% to US$4.5 billion, reflecting extended lead times from sovereign clients and softer US federal spending, while hybrid-cloud revenue dropped 12% to US$1.41 billion. Total quarterly revenue of US$9.68 billion missed estimates. Despite near-term lumpiness in AI demand, HPE raised its FY2026 adjusted EPS guidance to US$2.25–2.45.

Kroger Company (KR) -4.62%

Kroger narrowed its annual sales outlook as increasingly price-sensitive consumers make smaller, more frequent grocery trips and lean heavily on promotions. Third-quarter identical sales rose 2.6%, below expectations, while intensified competition from Walmart and Target has forced additional price cuts. The retailer is restructuring its cost base, closing three of eight Ocado-built automated fulfilment centres and taking a US$2.6 billion charge as it shifts to a hybrid e-commerce network and expands partnerships with Instacart, DoorDash and Uber Eats. For 2025, Kroger now expects identical sales growth of 2.8%–3.0%, slightly below prior estimates.

Dollar General Corporation (DG) +14.01%

Dollar General raised its annual profit guidance after delivering stronger-than-expected third-quarter earnings, supported by broad-based demand from value-seeking shoppers across income brackets. Comparable sales continue to track industry growth as the retailer’s pricing strategy—keeping roughly a quarter of its assortment at or below US$1—strengthens its appeal among lower-income households. Annual EPS is now forecast at US$6.30–6.50, up from US$5.80–6.30, with same-store sales expected to rise 2.5%–2.7%. Third-quarter earnings of US$1.28 per share comfortably beat expectations, reflecting disciplined cost control and renewed operational focus.

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