Taking Stock - Gold prices rose.

In todays taking stock, we discuss how gold prices rose on US President-elect Joe Biden's coronavirus stimulus proposal and rising US consumer price data.

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MARKET COMMENTARY

SOUTH AFRICA

Stocks on the JSE were volatile as the main indices reversed early gains and the expected boost to economic activity from the vaccine was offset by the local surge in coronavirus cases. The benchmark All-Share index ended down 0.1%. The Top 40 index was down 0.27%. Both the indices are hovering around their all-time high peaks despite two consecutive days of falls. The drop in indices was led by the country's banks, often seen as a bellwether of future economic activity, with the bank index down 1.65%.

 

 

EUROPE

European stocks closed slightly higher on Wednesday as investors monitored vaccine rollouts and coronavirus containment measures. The pan-European Stoxx 600 ended up 0.17% provisionally, with telecoms stocks climbing 1.1% to lead gains while travel and leisure shed 1.1%. European markets kept track of coronavirus developments in the region, with governments looking to accelerate, or to keep good momentum, in their coronavirus vaccination drives. In the meantime, lockdowns have been extended in Germany and the Netherlands.

 

 

US

US stocks rose on Wednesday, led by tech shares, as traders kept an eye on interest rates, the political uncertainty coming out of Washington and a still raging pandemic. Intel was the best-performing Dow component, rising 7.6%, on news that CEO Bob Swan would step down, effective Feb. 15. Other tech-related names also caught a bid, with Netflix and Amazon popping 3.1% and 2%, respectively. Apple also traded higher by more than 1%. Wednesday’s moves came as U.S. Treasury rates eased from their March highs.

 

 

ASIA

Stocks in Asia were mixed this morning as investors regionally reacted to Chinese trade data for December. China’s exports rose 18.1% in December as compared with a year earlier. That was higher than expectations for a 15% increase by analysts in a Reuters poll. Meanwhile, China’s imports grew 6.5% year-on-year in December.

 

 

 

CURRENCIES

The rand steadied in late trade on Wednesday, after a recovery rally in the previous session, and as the dollar rebounded and US yields held near recent highs. At the close, the rand traded at R15.25 versus the US currency, 0.08% firmer. With no major local data releases left this week, the rand is expected to take its cue from global drivers.

 

 

COMMODITIES

Gold prices rose this morning ahead of US President-elect Joe Biden's coronavirus stimulus proposal, while data showing US consumer prices rose solidly in December bolstered bets of higher inflation. Meanwhile, oil prices eased for a second day today as mounting coronavirus cases globally raised demand concerns, although a drawdown in US crude stocks for a fifth straight week capped losses. China, the world’s second largest oil consumer, reported its biggest daily jump in new COVID-19 cases in more than 10 months as infections in north-eastern Heilongjiang province nearly tripled, underscoring the growing threat ahead of a major national holiday.

LOCAL COMPANIES

Cartrack (CTK) +4.5%

In the face of a full nine months of limitations to install the in-vehicle IoT technology caused by the imposed Covid-19 operating restrictions, Cartrack was still able to achieve a robust year-on-year subscriber growth of 14% to 1,246,089. Subscription revenue came in at R1,635 million, up 18%. Total revenue for the period stood at R1,675 million, up 17%, while operating profit is expected to come in at R566 million or up 18%.

 

Santam (SNT) +0.5%

JSE-listed Santam believes that the Western Cape High Court’s Ma-Afrika business interruption insurance judgment, handed down in November and linked to the Covid-19 pandemic, does not set a legal precedent for the indemnity period for all other such policies. The short-term insurance giant went further in a statement sent to Moneyweb, saying that it is of the view the High Court “erred in its judgment in applying an 18-month indemnity period across the entire policy” of the Cape-based hotel group. “The judgment of the Western Cape High Court on the indemnity period applies only to the Ma-Afrika policy. Santam’s view is that the indemnity period is limited to three months as stated in the Ma-Afrika policy. However, the court ruled that, for the Ma-Afrika policy, the indemnity period is 18 months,” Santam pointed out in its statement.

INTERNATIONAL COMPANIES

INTEL (INTC) +7%

Intel has named Pat Gelsinger as its new chief executive officer, replacing Bob Swan after a rocky two-year run. The chipmaker recruited Gelsinger from software firm VMWare, calling him a "highly respected CEO and industry veteran" in a release. Gelsinger, who has been VMWare's CEO for about the past decade, will take the helm at Intel on February 15. Intel (INTC) shares rose nearly 8% following the news, while VMWare (VMW) shares slipped almost 8%. CNBC first reported the news. Swan was named Intel's permanent CEO in January 2019 following the departure of its previous CEO Brian Krzanich, who was forced to resign in June 2018 because of a "past consensual relationship with an Intel employee". Under Swan, the company has struggled, losing market share to competitors in key business segments and dealing with manufacturing delays.

 

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