June 2023 Update

Making the News

Global equity markets rallied strongly into mid-year (MSCI World +1.1% MoM/+27.8% YTD) with the threat of a US government debt default safely avoided and a pause in rate hikes from the US Federal Reserve ([Fed], after ten consecutive rate hikes). The latter is seen as a “hawkish pause” as the latest dot-plot implies a further two more 0.25% hikes over the remaining 4 meetings this year.

Mega-cap, US-listed tech stocks remain a key driver of equity market returns (benefitting from the hype surrounding artificial intelligence [AI]). In dollar terms, stocks such as Nvidia, Meta and Tesla more than doubled YTD (+190%, +138% and +113%, respectively) while Amazon, Apple, Microsoft and Alphabet delivered impressive gains (+55%, +50%, +43% and +36% YTD, respectively). Apple has made history, becoming the first company with a market value over $3tn. Since

The beginning of 2022 – Tesla, Amazon, Alphabet and Meta are down -18%, -15.1%, -12% and -10.1% respectively to date. he Chinese economy is still struggling.  The purchasing manufacturing index (PMI) for China came in at 49.0 in June — compared to 48.8 in May and 49.2 in April.  China’s factory activity in June contracted for a third month, while non-manufacturing activity was at its weakest since Beijing abandoned its strict “zero Covid” policy late last year. Overall, Emerging markets (EMs) have lagged developed markets (DMs) by 11.3% YTD but remain in positive territory (MSCI EM +16.5% YTD).

South Africa’s economic growth slowed to 0.2% YoY in 1Q23 – the weakest pace of expansion since a contraction was recorded in 1Q21. South Africa recorded a trade surplus of R10.2bn in May 2023, well above market estimates of R6bn. South Africa’s annual inflation rate eased further to 6.3% – a level last seen 13 months ago.