Home Depot beats Q4 on pro demand, holds outlook despite weak housing

South African Market Summary

The JSE All Share index edged 0.09% higher to 125,162.06 points, with the Top 40 gaining 0.13% to 116,987.04, as investors navigated a relatively constructive domestic backdrop. Developments in the energy sector saw Astron Energy move to restore bunkering capacity along the Cape route, supporting increased global shipping demand. Focus now shifts to the national budget, where expectations centre on continued fiscal consolidation, including deficit reduction and debt stabilisation. Recent data showed a 1.0% month-on-month decline in the leading business cycle indicator, with key releases this week set to guide macro direction.

European Market Summary

European equities advanced modestly, with the STOXX 600 closing 0.2% higher near record levels, supported by improved global risk appetite following gains on Wall Street. However, sentiment remained cautious as investors awaited clarity on evolving U.S. trade policy. In the UK, the FTSE 100 closed flat as strength in miners and utilities was offset by weakness in financials, while the FTSE 250 edged 0.1% lower. Separately, the Bank of England announced plans to bring forward CHAPS payment system operating hours from 2027, signalling gradual progress toward enhanced settlement efficiency.

US Market Summary

Wall Street closed higher, led by technology and semiconductor stocks as renewed optimism around artificial intelligence supported risk appetite despite ongoing volatility. The rally follows recent sharp swings linked to uncertainty over AI’s broader economic impact, with semiconductors outperforming. Developments from Anthropic, including new enterprise-focused AI tools, reinforced sector momentum. Policymaker commentary remained mixed, with the Federal Reserve highlighting both potential labour market disruption and resilience. Meanwhile, political developments, including President Trump’s State of the Union address, added a secondary layer of uncertainty ahead of upcoming midterm elections.

Asian Market Summary

Asian equities advanced, with South Korea’s KOSPI surpassing the 6,000 mark for the first time, driven by strong gains in semiconductor names amid continued AI-driven optimism. In Japan, services producer price inflation rose 2.6% year-on-year, reinforcing expectations of sustained price pressures as wage growth feeds through the economy, supporting the Bank of Japan’s tightening bias following its exit from ultra-loose policy. Meanwhile, Australia reported firmer-than-expected inflation, with core measures reaching a one-year high, increasing the likelihood of further policy tightening and reinforcing a broadly hawkish regional monetary backdrop.

Currency Market Summary

The South African rand traded largely unchanged ahead of the national budget, with markets anticipating a continued commitment to fiscal consolidation, including deficit reduction and debt stabilisation. In currency markets, the yen hovered near a two-week low following reports of political caution around further Bank of Japan rate hikes, highlighting potential divergence between fiscal and monetary authorities. Meanwhile, a firmer Chinese yuan exerted downward pressure on the U.S. dollar, contributing to a more nuanced global currency backdrop as investors assess policy direction across major economies.

Commodity Market Summary

Gold prices advanced during Asian trade as investors sought safe-haven exposure amid renewed uncertainty around U.S. tariff policy following a Supreme Court ruling. Oil prices remained near seven-month highs, supported by escalating geopolitical tensions between the U.S. and Iran, with potential supply disruption risks centred on the Middle East. While API data indicated a sharp build in U.S. crude inventories of 11.43 million barrels, declines in refined product stocks provided some offset. Market focus now turns to official EIA data for confirmation and near-term direction.

African Rainbow Minerals Limited (ARI) +0.45%

African Rainbow Minerals expects a solid first-half performance for the six months to 31 December 2025, with headline earnings projected to rise 5%–15% to R1.60–R1.75 billion, translating to HEPS of 814–891 cents. Basic earnings are forecast to increase materially by 65%–75% to R2.30–R2.44 billion, with EPS of 1,173–1,244 cents. The uplift reflects stronger US dollar PGM basket prices at Two Rivers and Modikwa, alongside once-off gains from the Sakura disposal and the remeasurement of ARM’s Nkomati stake following the Norilsk Nickel Africa acquisition. Results are due on 6 March 2026.

NEPI Rockcastle N.V. (NRP) +0.55%

NEPI Rockcastle delivered a resilient full-year performance for 2025, with net rental income increasing 11.2% to €618 million and distributable earnings rising 6.7% to €440.9 million, supporting a 3.1% uplift in DPS to 55.83 cents. Operational metrics remained robust, with a 99.5% rent collection rate and EPRA vacancy improving to 1.2%. Despite lower EPS and HEPS due to valuation effects, the balance sheet remains strong, with LTV at 32.8% and liquidity exceeding €1 billion, underpinned by investment-grade credit ratings and continued portfolio quality.

Altron Limited (AEL) +0.57%

Altron signalled strong momentum into FY2026, with HEPS and EPS from continuing operations expected to exceed the prior year by more than 30%, supported by low double-digit EBITDA growth and operating profit growth above 20%. Performance is driven by its Platforms segment, contributing ~90% of profitability, with strong growth in Netstar, FinTech and HealthTech, underpinned by increasing annuity revenue (>65%). While IT Services remains constrained, restructuring gains are emerging. Improved cash generation, disciplined capital allocation and operating leverage continue to support a resilient balance sheet and earnings outlook.

Super Group Limited (SPG) +5.36%

Super Group delivered a strong interim performance for the six months to 31 December 2025, with revenue increasing 7.0% to R22.68 billion and operating profit rising 8.7% to R1.10 billion. Profit before tax grew 24.8% to R834 million, while HEPS from continuing operations advanced 28.0% to 155.4 cents, supported by improved operational execution and cash generation, with operating cash flow up 39.4%. Despite a marginal 1.1% decline in NAV per share, tangible NAV increased 7.4%, reflecting underlying balance sheet resilience and continued earnings momentum.

RCL Foods Limited (RCL) +0.69%

RCL Foods expects a materially weaker interim performance for the six months to December 2025, with EPS projected between 74.3 and 77.5 cents, representing a decline of 42.6%–45.0% year-on-year. HEPS is similarly expected to decrease by 29.2%–32.1% to the same range, reflecting limited headline adjustments in the period. The update confirms earlier guidance of earnings pressure, with both metrics significantly below the prior base. The group is scheduled to release its full interim results on 2 March 2026, with investors likely focused on underlying operational drivers and margin dynamics.

Home Depot Inc. (HD) +1.99%

Home Depot reported a resilient fourth-quarter performance, with adjusted EPS of $2.72 ahead of expectations, supported by steady demand from professional contractors and smaller-scale repair activity despite a subdued U.S. housing backdrop. Same-store sales rose 0.4%, outperforming flat forecasts, while selective pricing and limited tariff exposure supported margins. The group maintained FY2026 guidance, expecting modest sales and earnings growth. Strategically, the rollout of AI-driven tools aims to deepen engagement with trade customers. Separately, governance scrutiny has increased around data-sharing practices, highlighting emerging reputational considerations.

Lucid Group Inc. (LCID) +5.08%

Lucid reported mixed fourth-quarter results, with revenue rising 123% to $522.7 million ahead of expectations, but an adjusted loss of $3.08 per share widening beyond forecasts amid supply-chain disruptions and tariff-related cost pressures. The group guided to more measured 2026 production of 25,000–27,000 vehicles, reflecting a cautious approach despite strong growth from 2025 levels. Strategic focus remains on scaling the Gravity SUV and launching a sub-$50,000 platform to broaden demand. Cost discipline has intensified, including workforce reductions, while liquidity of $4.6 billion supports ongoing investment in autonomy and future mobility initiatives.

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