Intel flags data centre CPU supply constraints, guides soft Q1 as AI demand outpaces capacity

South African Market Summary

South African equities advanced, with the All Share index rising 0.60% to 121,501.68 points and the Top 40 gaining 0.54% to 113,497.21. ArcelorMittal South Africa surged after confirming advanced talks with the IDC around a potential transaction, supporting sentiment in the industrials space despite ongoing structural challenges in steel. Truworths guided to broadly flat interim earnings as constrained consumer conditions continued to weigh on its African business. Macro sentiment was supported by the extension of a US$1 billion climate-linked debt guarantee under the Just Energy Transition Partnership.

European Market Summary

European equities recorded their strongest daily gain in nearly two months as investors welcomed a de-escalation in US tariff rhetoric and easing geopolitical risk. Broad-based gains were supported by upbeat corporate earnings, with autos outperforming after Volkswagen reported stronger-than-expected cash flow. Reduced defence spending expectations weighed on defence stocks, while Ukraine-exposed names rallied sharply. Improving euro zone consumer confidence added to the constructive tone, reinforcing optimism that household sentiment may be stabilising despite ongoing political and fiscal uncertainties across parts of the region.

American Market Summary

Wall Street extended its rebound as investors responded positively to softer US trade rhetoric and resilient macroeconomic data. Markets remained supported by evidence of firm consumer spending and a robust labour market, keeping growth expectations intact. Attention is now shifting to a pivotal earnings week, with several mega-cap technology companies set to report, carrying outsized influence on index performance. While recent gains have not fully reversed earlier volatility, sentiment has stabilised, with investors balancing solid economic momentum against valuation risk and policy uncertainty.

Asian Market Summary

Asian markets traded cautiously as investors assessed improving Japanese economic data alongside steady monetary policy. Japan’s manufacturing and services activity returned to expansion, driven by a sharp rebound in export orders and services demand. The Bank of Japan held its policy rate at 0.75% while upgrading growth forecasts, citing a strengthening wage–price cycle and supportive fiscal conditions. Core inflation remains above target, keeping expectations of gradual policy normalisation alive, although political considerations ahead of elections suggest a measured approach to further tightening.

Currency Market Summary

The South African rand hovered near three-year highs against the dollar as easing global risk aversion reduced demand for safe havens. The US dollar remained under pressure, heading for its sharpest weekly decline in a year amid policy uncertainty and softer geopolitical rhetoric. The yen was rangebound after the Bank of Japan held rates steady while upgrading growth and inflation forecasts, underscoring a cautious tightening bias. Market participants remain alert to potential Japanese intervention should the currency weaken materially beyond current levels.

Commodity Market Summary

Commodity markets were shaped by policy risk and geopolitical tension. Oil prices rebounded after renewed US warnings toward Iran heightened supply disruption concerns, although gains were tempered by larger-than-expected US crude inventory builds. Precious metals surged, with gold pushing to fresh record highs alongside silver and platinum, supported by geopolitical uncertainty, a weaker dollar and expectations of US rate cuts. In South Africa, proposed changes to sugar reference pricing signalled rising trade tensions as authorities moved to address import pressure on domestic producers.

Reinet Investments S.C.A. (RNI) +1.13%

Reinet’s wholly owned subsidiary, Reinet Fund S.C.A., F.I.S., reported a net asset value (NAV) of EUR 38.47 per share at 31 December 2025, down from EUR 38.87 at September quarter-end, reflecting a total NAV of EUR 6.59 billion. The EUR 68 million decline primarily reflects valuation movements across Pension Insurance Corporation Group Limited, other investments and cash. Assets and liabilities were revalued at fair value, with figures unaudited. Reinet’s consolidated NAV will differ due to additional parent-level assets and liabilities.

Clicks Group Limited (CLS) -6.34%

Clicks reported solid trading momentum for the first 20 weeks of FY2026, with group turnover rising 7.4% to R19.5 billion. Retail sales increased 6.0%, supported by pharmacy turnover growth of 9.0%, strong Black Friday performance and resilient festive demand, partially offset by aggressive competitor discounting. Comparable store sales grew 3.7%, driven by modest volume growth and easing inflation. Distribution arm UPD delivered turnover growth of 11.4%, although total managed turnover was marginally lower following contract non-renewals.

Sasol Limited (SOL) +14.17%

Sasol released business performance metrics for the six months to December 2025, highlighting improved operational stability despite a challenging macro backdrop. Southern Africa operations benefited from the destoning plant reaching beneficial operation, improved Secunda availability and stronger Natref performance, supporting higher fuel sales volumes. Chemicals markets remained soft globally, weighing on revenues, although cost and capital discipline continued to deliver benefits. Fuel sales volume guidance for FY26 was revised upward, while gas production guidance was lowered due to supply delays. Management expects operating conditions to remain demanding.

Truworths International Limited (TRU) +5.25%

Truworths reported flat group retail sales of R12.5 billion for the 26 weeks to December 2025, as resilient growth at Office UK offset continued pressure in South Africa. Office UK delivered solid sales growth, supported by brand momentum, online demand and ongoing store remodelling, despite a weak UK consumer backdrop. Truworths Africa remained constrained by stressed consumer conditions, although margins improved and online sales grew strongly. EPS and HEPS are expected to be broadly flat to modestly higher, reflecting disciplined cost and credit management.

South32 Limited (S32) +2.59%

South32 delivered steady operating performance in the December 2025 quarter, maintaining FY26 production guidance across operated assets and keeping first-half unit costs broadly in line with guidance. Portfolio simplification progressed with the Cerro Matoso divestment, while growth spending accelerated at Hermosa as construction advanced at the Taylor zinc-lead-silver project and development work progressed at Clark. Sierra Gorda generated strong cash returns, supporting distributions received in H1. Capital returns continued via ordinary dividends and buy-backs, while Mozal is set for care and maintenance from March 2026.

Intel Corporation (INTC) +0.13%

Intel warned it is struggling to meet surging demand for server CPUs used alongside AI accelerators in data centres, despite running factories at capacity, and guided first-quarter revenue to $11.7–$12.7 billion versus consensus of about $12.5 billion. Management expects adjusted EPS to be roughly breakeven, below market expectations, with supply constraints leaving high-margin data-centre sales unrealised while ramping new PC chips pressures margins. CEO Lip-Bu Tan reiterated a cost-cutting, flatter-organisation turnaround and said external customers are evaluating Intel’s next-generation 14A process.

Capital One Financial Corporation (COF) +1.76%

Capital One agreed to acquire fintech Brex in a US$5.15 billion cash-and-stock transaction, expanding its exposure to corporate cards and expense management while reducing reliance on consumer credit. Shares dipped on deal concerns, despite a strong fourth-quarter performance driven by a sharp rise in net interest income from credit cards. Management highlighted strategic diversification benefits as deal activity accelerates into 2026. However, investor focus remains on regulatory risk, with proposed US caps on credit-card interest rates posing a material downside given Capital One’s card-heavy earnings profile.

Procter & Gamble (PG) +2.65%

Procter & Gamble reported mixed second-quarter results, with revenue marginally below expectations as weaker US consumer spending and a government shutdown weighed on volumes, partly offset by stronger international growth. Adjusted earnings exceeded forecasts, supported by resilient demand for premium beauty and haircare products, while volumes declined across most US categories. Core gross margins contracted for a fifth consecutive quarter due to tariffs and value-focused pack innovations. Management reaffirmed full-year sales and profit guidance, signalling confidence in navigating a challenging consumer and geopolitical backdrop despite near-term US softness.

Prefer to read the full report offline? Click here to download the full report.